MultiChoice takes no chance as new rival TopTV launches -
MULTICHOICE’s new rival TopTV said yesterday it had sold 50000 decoders on Saturday and expects more orders this week.
TopTV’s launch last week prompted MultiChoice to move swiftly in an attempt to protect its market share by launching a new R99 per month bouquet to rival that of TopTV.
On Digital Media (ODM ) launched TopTV at the weekend, more than two years after it was awarded a subscription broadcasting licence by the Independent Communications Authority of SA (Icasa) to compete with MultiChoice.
MultiChoice said on Friday its new DStv Lite offering would offer 25 television channels, 32 radio and 10 music DMX.
MultiChoice’s premium bouquet costs R549 per month.
TopTV’s basic package retails at R99 and offers 24 channels, The premium option costs R249 per month and has 55 channels.
Nick Kershaw, an analyst at Deutsche Securities, did not expect the effect on MultiChoice’s existing business from TopTV to be significant but, he said, MultiChoice “ evidently is not taking any chances”.
MultiChoice is the biggest money spinner for media giant Naspers . David Moore, a media analyst at Africa Analysis, said DStv had been sitting on its “laurels” for a long time.
“This (DStv Lite) is a way for DStv to win market share. For consumers it is a good thing because they have more choice,” he said. He expects a small percentage of existing MultiChoice customers to move to TopTV. But Moore warned that consumers could expect a repeat of programmes as that was part of the pay TV business model worldwide. MultiChoice’s customers have complained about the constant repeats of programmes.
“ MultiChoice may try to repeat less but there is no pay TV provider that does not repeat channels. The cost of providing new programmes prohibits operators from providing new channels all the time,” he said.
Avhasei Mukoma, a lawyer and broadcasting analyst, said as Icasa subscription TV regulations prohibit pay-TV operators from earning the majority of their revenue from advertising, TopTV would have to acquire at least 300000 new subscribers a year in the first five years of operation to stabilise its balance sheet and be profitable and sustainable.
MultiChoice launched DStv 15 years ago and has 2,64-million subscribers in SA. “The main risk that it may face is resistance from the current DStv subscribers to migrating to the new service, due to the similarity of some of the channels. As MultiChoice decoders won’t be compatible with TopTV smart access cards (and need a new satellite dish as well), the churn rate will also be minimised,” Mukoma said.