The 17 different packages and ‘complex’ add-ons in SA are not ‘what consumers want’
Canal+ Group, the new owner of MultiChoice, says one of the three key pillars in turning around struggling DStv is to fix its core offerings.
This is what it terms “simplified and appealing commercial offers”.
David Mignot, CEO for Africa at Canal+, says that “today, there is a huge variety of different offers, fees” across its DStv offers.
In South Africa, he points to an example where there are “actually 17 different price points” depending on the technology choice (satellite or streaming).
These extend from its entry-level EasyView package (R30 per month, but curiously no longer listed on its website) to DStv Premium, which is R979 per month when using a decoder, but only R699 on the streaming-only option.
Along with this, it offers what Canal+ describes as “complex add-ons” as well as PVR fees and reconnect fees.
The former is the Access fee (R125 a month and, rather absurdly, not to be confused with the DStv Access package) for anyone wanting to be able to record programming on their PVR – which pushes the ‘all-in’ price for DStv Premium to R1 104 a month – and the latter is a R50 payment due when service is restored after suspension due to non-payment.
Along with this, it has add-ons for Showmax (now effectively deprecated), Add Movies (a bundle of all its movie channels), Disney+ and Netflix.
The last two of these are surely hardly lucrative for the pay TV operator (it would’ve picked up a few thousand subscribers as it was a launch partner for Disney+).
Even more complexity elsewhere in Africa…
In other operations across Africa, it also has a digital terrestrial television (DTT) business called GOtv. This adds still more complexity.
Says Mignot: “In MultiChoice markets, for example, we have DStv for DTH [direct to home], GOtv for DTT, Showmax and DStv streaming in OTT [over the top], and there are also a wide mix of premium channel brands and local channel brands.
“Some of them, like SuperSport, are hugely valuable brands in their own right, but rationalising our brand portfolio is another thing we can do to improve our position in Africa and make better use of our marketing investment.”
Cuts and changes
Canal+ has already begun this rationalising process by killing Showmax (operations will cease at the end of this month, and it is offering the handful of paying subscribers that it has the option to subscribe to DStv Stream Compact at a discounted price of R99 a month for the first 12 months).
All indications are that a number of other channels will be renamed and streamlined to address the bloat, especially in this market. In South Africa, the group owns and operates at least 37 channels, including 20 SuperSport channels.
Mignot makes the point that the group has “incredibly strong brands in Africa” it can use, “but we have too many sub-brands and that fragments our marketing investments and dilutes the impact”.
“So, in France, for example, we use the Canal+ brand across DTH and streaming. So, the brand is the same for every subscriber and every cent we invest in marketing benefits the master brand as well.”
So many decoders too …
Beyond its ridiculously long list of currently available options, Mignot points out that DStv currently offers as many as five decoders too (the HD Single View, Streama, HD, Explora 3B and Explora Ultra).
Of course, this is only in its most mature market, South Africa.
Mignot says: “But we know from our experience at Canal+ in Europe and Africa that this isn’t what consumers want. They want simplicity.
“They want value for money, and that’s exactly what we are going to give them.”
Mignot says the “ticket price” for customers to buy and install a set top box (decoder) and satellite dish, including one month’s subscription, is three times as high in MultiChoice countries in Africa as in Canal+ ones (Francophone Africa).
He adds “there’s a point at which this becomes too high and puts people off from subscribing”.
Attracting subscribers
It has quickly moved to correct this by slashing the prices of decoders by increasing subsidies and will standardise these completely in the months to come.
The cost of this is already in its ‘boost’ plan where it will invest nearly R2 billion to kickstart growth.
Mignot says “bringing down the ticket price is absolutely key for getting new subscribers in, and it is well worth the investment, but it’s just one side of the coin”.
The other side is average revenue per user (Arpu).
Securing new (or returning) subscribers “then maintaining and increasing that Arpu” is the plan – “we have managed this successfully both at Canal+ and MultiChoice in Africa by providing high value offers”.
This article was republished from Moneyweb. Read the original here.