Economic woes: 288,000 subscribers dump DStv in Nigeria
DStv is currently grappling with falling pay-tv subscription numbers in Nigeria and other countries in the sub-Saharan Africa, with over 288,000 subscribers dumping the satellite television platform in the last one year, New Telegraph has learnt. It was gathered that the subscribers’ decision stemmed from the annual service hike, which has made service unaffordable to many, coupled with the lowering purchasing power of African majority. However, Naspers, the parent company of Multichoice, owners of DStv, has attributed the poor subscriber number to substantial price increases in order to offset the impact of currency declines and weaker consumer sentiment in the region. The company has vowed to minimise further price increases for consumers in order to reinvigorate growth by focusing on managing and absorbing costs where possible going forward. Naspers has revealed that the loss of 288,000 direct- to-home (DTH) pay-tv subscribers in sub-Saharan Africa has prompted the company to reposition its business in order to deflect any potential negative impacts.
Chief Financial Officer at Naspers, Mr. Basil Sgourdos, said the company would increase its focus on its Internet businesses in a bid to recover from the weakening subscriber number, according to results for the year ended 31 March 2016. “The loss of DTH subscribers and the effects of weakening currencies in sub-Saharan Africa will have a significant downward impact on earnings and cash flows in the year ahead,” Sgourdos told ITWEB. While noting that in the year ahead, the focus will be on continuing to deliver top-line growth while scaling the more established e-commerce businesses, Sgourdos said the company would invest further in long-term growth opportunities such as ShowMax, letgo and ibibo, targeting video- entertainment revenue. He noted: “It could take some time before the plans to reposition this business will have a positive impact. “Our new subscription video-on-demand service, ShowMax, had a good start in South Africa with a deeper and more customised content offering than competitors and a focus on service delivery,” the company detailed in its results announcement, which reported 21 per cent growth in earnings for its business overall to $1.2 billion.
Though, DStv has about 10 million subscribers in the Sub-Sahara Africa, the loss of 288,000 subscribers signals a distress in the business, forcing the company to leverage other business platforms to up its revenue. However, the company, which usually spends half a billion dollars a year on acquisitions, is “on the lookout” for more deals, said Chief Executive Officer, Bob Van Dijk. “We have also lost a lot of subscribers in the last year in sub-Saharan Africa, people have just not been able to afford it. We bill in local currencies, but our costs are in dollars. It is quite painful when the currencies are running in the wrong direction,” Van Dijk said. The development is coming even as more Nigerians currently shun repeated phone calls by DStv customer agents to renew subscriptions for their bouquet, citing current economic situations in the country and high cost of subscriptions. Nigerians have, in recent past, complained bitterly about the annual service price in the pay-tv market that has become more competitive with DStv leading the pack in the price increase. “As a DStv subscriber, I can tell you that it is over a year that I subscribed and I can tell you that every now and then, I get calls from DStv urging me to renew my subscriptions.
The economic situation is not helping matters, as subscribing to DStv service, whose price they increase annually, is not on my priority,” said Adebayo Balogun. Another subscriber, Mrs. Titi Idera harped on the need for a pay-as-youwatch billing system, as it is the case in the telecoms industry. “There is, no doubt, that we are being ripped off by DStv, which has continued to increase service cost annually and yet our leaders are not doing anything about it. I just abandoned my subscription because we now have richer TV contents on our local television stations in Nigeria now,” she said. “My brother, renewing my subscription is not on my scale of preference for now. There are other pressing issues to spend money on. Yes, I have also been receiving several calls from DStv but practically, I can say I have dumped subscription in the last 12 months,” Chucks Chima, a businessman at Ikeja, Lagos said. Other subscribers, who spoke with our correspondent at different locations within Lagos metropolis, maintained that they have had to migrate from premium service to a bouquet with lower price as they grappled with the economic recession in Nigeria. A DStv customer attendant at the Ogba Customer Centre of the pay-tv company, who spoke with New Telegraph on the condition of anonymity, confirmed to our correspondent on phone that the centre has been witnessing low turnout of customers who often come for subscriptions on a daily basis.
“I won’t lie to you, people are no longer coming to renew their subscriptions the way they used to do before. They often cite economic situations and our service price increases, at times, as reason for their apathy,” he said. “The truth is that the situation also affects other customer centres around.” Asked if the low turnout at service centre is not associated to the uptake of existing e-payment channels already created for customers to make renew subscription, the customer attendant said: “Well, I want to believe that a similar thing is happening both for physical subscriptions and on epayment channels.”