DStv?s subscriber numbers have plummeted in the past three years, with South Africa?s largest pay-TV operator seeing its customers recede to levels last recorded in 2019.

In MultiChoice?s latest financial report, its half-year results for the period ended 30 September 2024, the company revealed that DStv?s subscribers had declined to 7.4 million in South Africa.

This represents a loss of 399,000 or 5.1% of paying customers compared to the previous year, indicating a continuation of a negative trend.

When considering 90-day active subscribers, the situation looks even worse.

Between September 2023 and 2024, DStv?s 90-day active subscribers declined by 495,000 (5.7%) ? from 8.6 million to 8.1 million.

According to MultiChoice, consumer discretionary income remained under pressure in South Africa despite some improvements to macroeconomic conditions.

In previous financial reports, MultiChoice said load-shedding hurt subscriber growth, as people cancelled their DStv when their viewing was increasingly interrupted by power cuts.

The dramatic improvement at Eskom in the past year is therefore expected to positively impact the pay-TV operator.

MultiChoice also highlighted that inflation had declined by 90 basis points between January and September 2024, resulting in an interest rate cut from the Reserve Bank.

Additionally, there were optimistic expectations around the Government of National Unity and the rand strengthened against the dollar.

?Although the direction of travel is encouraging for the business, improving underlying trends will take time to play through in South Africa?s results,? MultiChoice stated.

As an example, MultiChoice said its South African business delivered a sequential improvement in subscriber decline, losing 184,000 subscribers in 1H FY25 vs. 215,000 in 2H FY24.

However, it said the DStv Compact base remains under significant economic pressure, which will take time to resolve.

While MultiChoice is putting on a brave face, the fact is that its subscribers are in freefall, it is reporting increasing losses, and its technical insolvency is worsening.

For the same six-month period last year, MultiChoice reported an after-tax loss of R911 million. Twelve months later, this doubled to a R1.8 billion after-tax loss.

Additionally, MultiChoice became technically insolvent during its 2023/24 financial year, meaning its liabilities exceed its assets.

For the year ended 31 March 2024, MultiChoice reported negative equity of almost R1.1 billion. Six months later, this has worsened to negative equity of over R2.7 billion.

The chart below shows how MultiChoice?s subscriber growth took a turn between September 2022 and March 2023.

Since its peak of 9.3 million 90-day active subscribers in March 2023, DStv South Africa has lost 12.6% of its customers.

Over the past few years, MultiChoice has repeatedly altered its subscriber reporting metrics, making it challenging to compare recent performance with its history of relatively strong growth.

One of the major changes was in 2019, when it stopped providing the number of its Premium package subscribers and grouped these users with Compact Plus while confusingly calling the combined segment ?Premium.?

This came at a time when the Premium user base had started to decline, but Compact Plus was seeing some moderate growth.

Another significant alteration was switching to a 90-day active subscriber reporting period rather than reporting the absolute number of subscribers by the end of the half-year or full-year.

This number includes any subscriber who had a DStv subscription up to three months before the end of the relevant financial period.

Similar to its market segment reporting, when DStv?s 90-day subscriber numbers took a turn after March 2023, MultiChoice reverted to focusing on its year-end subscriber figures.

After initially bundling DStv Premium and Compact Plus subscriber numbers, MultiChoice has now returned to showing DStv Premium figures separately to indicate a slowing decline.

Streaming services eating DStv?s lunch

DStv has come under enormous pressure from international video streaming services in the past few years.

Most of its competitors ? including Amazon Prime Video, Disney+, and Netflix ? offer substantially more affordable and flexible packages than DStv.

However, the growth of these services in Africa continues to be limited by poor broadband penetration and high prices.

Many of the major streaming services are not ignorant of these challenges. Like DStv and Showmax, they offer quality settings that significantly reduce data consumption.

Being keenly aware that most South Africans access the Internet through a smartphone, they also offer cheap mobile-only subscriptions.

In addition, the likes of Amazon Prime Video and Disney+ have also partnered with mobile networks to offer reduced prices on bundles that can only be used for video streaming. (MyBroadband)

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