1. DSTV – Monopoly no more
UCT GSB CONSULTING

2. COMPANY CHOICE DSTV - MULTICHOICE WHAT HOW Movies Local content Sports
Kids
New & Life stile
Documentaries
The ONLY South African Pay TV operator with operations in Africa
Over 25 Years
Also Own MWEB – Local ISP – Broadband Provider
Deliver video content over satellite – Push Content
They decide WHAT
They decide WHEN

3. DSTV’s BUSINESS MODEL Subscription based Setup installation
After 25 years
~5 million subscriber based
Pay to access bouquet of channels
3 payment options
Base Package
Sport Package
Premium Package
Price per year
$300
$480
$840
Channels 30
Only sport
500
$10 000
Average Salary of working Class in SA

4. Situation analysis SA Monopoly Pay TV Operator Over 25 years
Owning Sporting Rights
Strong focus on Hollywood and Local Content
~5 Million Subscribers
ARPU ~$780
Pay TV Landscape disrupted by Online
Declining subscriber base
moving to online

5. Timeline of events 2013 - 2014 2013 - 2014 2013 - 2016 Now
Broadband penetration & speed picks up
Users start accessing video content online illegally
DSTV respond with PVR & Box Office
Subscriber base starts to decline
DSTV Launch their Netflix Alternative
SHOWMAX
2016
Netflix Arrives in SA
Subscriber base continues to decline
Now

6. ANALYSIS
NICCOLO

7. Changing Trends What are the South African Pay TV Customer Needs?
DSTV- Multichoice
Access to variety
Whatever, whenever
Affordable
Flexible pricing
Latest Content
Local Content
Sporting
SA low-middle income  cash strapped working class
DSTV had a monopoly in the market and customers had no choice
DSTV did not adapt to changing customer trends

8. DSTV did not change pricing or enable their content online
Factors of disruption
2014
Effects
DSTV RESPONSE
Internet penetration increase to 52%
Broadband speed increased to 8bits/s  speed enabled video streaming
Customers demand flexibility & on demand
DTSV start losing customers 2014
2016 – DSTV first ever staff restructure churn starting to hurt
Launched Box Office
pay for latest movie $2.5
One day only
Launched PVR
Record Shows
Watch anytime
Launch Showmax
Replica of Netflix
Subscription based model  $10
On demand
DSTV did not change pricing or enable their content online

9. The disruptor Enters Netflix entered in 2016
DSTV- Multichoice
Needs
Netflix
Access to variety
Whatever, whenever
Affordable
Flexible pricing
Latest Content
Local Content
Sporting
Netflix provided service that met SA customer needs
DSTV did not take threat seriously and did not adapt

10. DSTV’s only competitive advantage is local and sporting
NETFLIX vs DSTV
NETFLIX
DSTV
SA Consumer
Annual cost of $120
No Setup Fees
Flexible Viewing
Excludes Broadband - $250 per Year
Affordable
Annual cost of $840
$300 Setup Fees
Annual escalation
Semi- Flexible Viewing
Sports & Local Content
Price sensitive
Low Disposable income
Netflix is seen as viable replacement
DSTV’s only competitive advantage is local and sporting

11. Response, critique & Recommendations
joel

12. Response & Critique of DSTV
Period
DSTV Response
DSTV Rational
Critique
2013
Launch Box Office
To give access to longtail content on a flexible basis
Maximum of 6 movies which were out dated.
Affordability
2014
Launch PVR (Personalized video recording)
Allowed flexibility through recording shows
Affordability Limited to disc space Limited to specific TV channels
2015
Launch Showmax
Replica of Netflix with Local / month
Poor user experience
Platform compatibility
Quality of viewing poor
Poor content
Needs not met and poor adoption
2017
Showmax become free for premium subscribers
Stop attrition of subscribers
Too late (1 year after Netflix)
Value not as good as Netflix (content)
Brought local content to it

13. Response & Critique of DSTV
Period
DSTV Response
DSTV Rational
Critique
2013
Launch Box Office
To give access to longtail content on a flexible basis
Maximum of 6 movies which were out dated.
Affordability
2014
Launch PVR (Personalized video recording)
Allowed flexibility through recording shows
Affordability Limited to disc space Limited to specific TV channels
2015
Launch Showmax
Replica of Netflix with Local / month
Poor user experience
Platform compatibility
Quality of viewing poor
Poor content
Needs not met and poor adoption
2017
Showmax become free for premium subscribers
Stop attrition of subscribers
Too late (1 year after Netflix)
Value not as good as Netflix (content)
Brought local content to it
Ignored customer needs and failed to adapt from a complacent perch of sport

14. What dstv should have done differently
Recommendation
What
Why
Embraced technology early
DSTV + Broadband bundle (m-web part of DSTV)
Add value to premium – Entrench & Retain customers
Immediately creates channel to deliver wider selection of content
Review the pricing
Risk of losing non sport watchers
Allow flexible packages, meeting needs & costs
Compromise or be Cannibalized
Take all content online (2014 / 2015) – access to internet
Launched PVR box online
DSTV for local content
Showmax for international
Bring Netflix (& other) onto PVR for revenue share
Not as a competitor but rather as complimentary – Sky & BBC in UK – retained and grown

15. summary

16. Summary of Outcomes Recommendation Outcome Embraced technology early
DSTV monopoly
Advances in technology & global trends
Changing customer needs
Failed to capture opportunity
Netflix Disruption
Our Recommendations
Recommendation
Outcome
Embraced technology early
Retain customers
Competitive pricing
Fragmented but future proof clients
Take all content online (2014 / 2015) – access to internet
Access & flexibility internally when needed