DStv, a leading satellite television provider, has reported a substantial loss in revenue due to a significant decline in subscribers.
According to MultiChoice’s financial results for the year ended March 31, 2024, the company lost 9% of its active subscribers, primarily attributed to a 13% decline in the Rest of Africa business.
The decline in subscribers has resulted in a substantial revenue loss for DStv, with the company’s financial statements revealing a R4.1 billion loss, a 42% decline from the previous year.
The decline in subscribers and revenue has also led to MultiChoice becoming technically insolvent, with total assets declining from R47.6 billion to R43.9 billion and liabilities increasing to around R45 billion, resulting in a negative equity of R1.068 billion.
The decline in subscribers is attributed to various factors, including tough economic conditions, where households prioritize basic necessities over entertainment. Additionally, the consistent load shedding in South Africa has created an environment where customers without backup power are reluctant to subscribe to DStv.
The mass market tier, which traditionally showed strong growth, declined by 2% due to pressure on the Family base.
The Premium and Compact Plus DStv packages declined by 8%, while the Compact base declined by 9%.
The decline in subscribers has resulted in a 5% net decline in group revenues to R56 billion, with weaker subscriber trends and foreign exchange pressures affecting group trading profit, down 21% to R7.9 billion.
Analysts have expressed concerns over MultiChoice’s financial performance, with Wayne McCurrie from FNB Wealth and Investments describing the results as “truly awful.” Shane Watkins from All Weather Capital expects the share price to drop to below R60 if the deal with Canal+ does not materialize.
The decline in subscribers and revenue raises questions about the future of DStv in the African market, as more affordable entertainment alternatives like Netflix, YouTube, Showmax, and Disney+ gain popularity. With increased broadband penetration rates and lower data costs, South Africans are migrating from DStv to these streaming services, posing a significant challenge to MultiChoice’s business model.
DStv’s significant revenue loss due to a decline in subscribers highlights the changing media landscape and the need for the company to adapt to the shifting preferences of consumers.
As the competition intensifies, DStv must explore innovative strategies to retain its customer base and remain relevant in the market.