DStv, the leading satellite TV provider, is facing serious challenges as it grapples with a significant exodus of subscribers, leading to “technical bankruptcy” as its liabilities exceed its assets.
The troubles began when DSTV lost 100,000 subscribers in late March. The company blamed the sharp decline on the harsh economic realities facing its customers. With the cost of living rising, power cuts increasing and unemployment high, many consumers were forced to end their pay TV subscriptions or downgrade to more affordable plans.
Calvo Mawela, CEO of DSTV, expressed concern about the situation and stated, “The group’s active subscriber base fell 9% mainly due to a 13% drop in customers in the rest of Africa as mass customers in countries like Nigeria had to prioritize basic needs over entertainment.“ .
The premium segment, which includes Compact Plus packages, saw a 6% drop in subscribers to 1.3 million. However, Mawela noted that the decline is slowing, with eight out of ten people on streaming platforms retaining their DSTV subscriptions.
The hardest hit segment was the mid-market, including Compact, while the mass market continued to show growth potential. The change in subscriber mix, combined with lower subscriber activity, resulted in a 5% decline in monthly average revenue per user (ARPU), from R269 to R256.
As DSTV’s South African business grows, the company is focusing on generating additional revenue streams from sports betting, insurance and internet services to offset pressure on ARPU and falling margins.
In a desperate appeal to customers, DSTV urged them to reconsider their decision to leave, blaming the economy for the current predicament. The company even suggested that a court-ordered one-month free subscription for all active subscribers had contributed to its “technical bankruptcy.”
However, some industry experts believe that DSTV’s troubles go beyond economic factors. They point to the company’s arrogance and lack of innovation as the root causes of its decline.Pride got them there.“, one analyst commented, highlighting DSTV’s failure to adapt to the changing media landscape and the rise of streaming services.
When DSTV was on the brink of ‘technical bankruptcy,’ it remains to be seen whether the company can weather the storm and regain its footing in the highly competitive media industry.
