3 Ways Naspers’ Multichoice Can Reinvent DSTV & GOtv In Africa For A Disruptive Mobile Future
The future is already here — it’s just not very evenly distributed.
– William Gibson
I did not renew my Multichoice DSTV service 2 months ago. I did this after they raised their premium package to almost Kes. 10,000.00 per month. Prior to that, I complained bitterly on social media and to my surprise it seemed to me that the majority of people I knew had signed-off DSTV already as far back as 2 years ago. Imagine that! I followed their lead as the joke seemed to be on me.
Many had found workarounds and were spending far less and still enjoying great content. Indeed, even during this holiday season when Multichoice was running promotions on Facebook, customers were complaining in the comments about the high costs and regularly repeated content. The market is talking but is Multichoice even listening?
To be fair, DSTV and GOtv are both immensely successful brands. Collectively they have over 10 million customers in Africa. In addition, Naspers which owns Mutltichoice and by extension the DSTV & GOtv brands generated US$ 3 Billion this year from its diverse global businesses. Naspers is doing well. However, going by global trends, it would appear that Multichoice is heading for disruptive times ahead.
Seismic changes are on the horizon for Multichoice including the impending launch of Netflix in Africa next year, starting with South Africa. In many ways, this does NOT really matter since lots of people in Africa are already on Hulu and Netflix using VPN workarounds. Where sports content is concerned, which is where SuperSport is dominant in Africa, people have also found alternatives to watch live sports like EPL football at a fraction of the cost.
Naspers is already evolving their video entertainment business and has launched Internet-based streaming services as well as other value-adds in South Africa and the rest of Africa. However, it seems to me it may (already?) be too little too late as customers are leaving in droves and trying out lower-cost offerings to get access to the content they love. Indeed, its amazing how much free content is already on YouTube as an alternative!
Going forward, its hard to tell what the future will look like for Multichoice but one thing is certain – If the DSTV and GOtv offerings are NOT radically reinvented for a disruptive mobile future, they will become irrelevant in a few years time. Therefore, here is my liberally creative take on 3 things that Multichoice could do to remain relevant:
Unbundle content for on-demand mobile Internet consumption
One of the things working against Multichoice is that both DSTV and GOtv work on the basis of bundles. More expensive bundles give you a broader range of content and presumably better value. In my opinion, if you ask the majority of customers what they watch its quite often live events like EPL Football, Rugby and Formula 1. This is the majority of the content that they actually want to consume.
In the unbundling of content, customers would then only pay for what they actually want to watch which seems logical? In the short-term, this could hit overall revenues quite hard but in the long-term it would mean a much larger customer base paying smaller amounts for personalized ‘mini’ bundles. The easiest way to execute this strategy would be to deliver content via mobile apps and mobile devices like smartphones and tablets, over the Internet.
Adopt a mobile-first Internet distribution model
Multichoice is heavily invested digital terrestrial and satellite distribution for its content. This was the logical way of doing so 20 years ago but times have changed and it goes without saying that mobile is the number one media in Africa based on the sheer number of mobile devices in use here. Africa IS mobile-first.
Therefore, to truly scale business for digital disruption, Multichoice needs to re-jig its entire business around a mobile delivery model. This means not just mobile devices like smartphones but also making content available with on-demand streaming devices like Google’s Chromecast. However, mobile broadband is still very much a work in progress in most of Africa.
Partner with mobile networks to offer affordable data bundles & mobile-based micro-payments for content
In order for Multichoice to deliver via mobile at scale, it will need to work closely with mobile networks on a continental basis. This means creating unique data bundles explicitly for handling streaming content at affordable rates. Multichoice would also need to create the right incentives for mobile networks so that they could share in the revenues generated in the process. If this could actually be achieved, Multichoice could gain millions of customers in no time at all.
In terms of monetizing digital video content, Multichoice would need to work with mobile networks so as to integrate mobile money and operator billing for payments. This would then create a ‘trickle up’ effect of many small payments that could be for mini bundles or even just a single EPL football game. Kenya, has over 22 million M-Pesa subscribers so that is the potential size of the market for Multichoice here alone. Its huge!
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4 Comments
Spot on! Getting access to live sports streams or on demand to mobile.
I wouldn’t worry about Netflix being a threat to either GoTv or Dstv. The number of people streaming is still very small. And in a multi person (family) household – dad, mum, kids, a paid TV package with bundles of 50 – 100 channels with something for everyone, shared at different times, will remain for years.
The only thing that differentiates dstv is its extensive sports library – and while the people (like you) who might stream an F1 races or soccer on the internet are also the same people who can pay the 10,000 dstv premium – but are also likely to be found in sports pubs (not at home) watching the same sports with friends for fun and camaraderie.
Last month when Robert Pires was around (had to drop that:-) )…I had the opportunity to chat with an executive from Multichoice and my exact words were as you stated above; they need to figure out content on demand else with the changing generation, they will become irrelevant.
Last year, DStv had a partnership with Safaricom to deliver select live matches through safaricom.com and it was based on operation billing so one did not need to have a dstv account but a mobile number. This was part of the data campaigns that the Telco was running. If I remember correctly, the cost was either based on a match (3hrs) or 24 hours or 7 days access. I used it every weekend especially when I travelled.
This basically means they, Multichoice, do know what needs to happen and have the basic infrastructure to deliver….could be they have something cooking in the background as they try and drain as much 10k as they can?
I have a cousin who works for Multichoice and this was the discussion at this years christmas lunch. My mum switched off her DSTV and moved to zuku, she loves the internet, the fiber TV and her internet TV (whenever she is extremely bored), I do not own a TV, but I have two laptops and desktop, internet is how I consume my media.
As Bankelele argues DSTV are rich with sports licences. That is the only golden trophy they hold. That was the only argument that my cousin kept on repeating. However, just like music labels started losing to the Internet that trend could also holds true about DSTV. Sooner than later, these sports companies are going to realise that streaming is better and thats where they will move to.