“It’s been over six months since we stopped watching (DSTV). I would rather watch internet TV!” commented a frustrated Nigerian under a social post announcing Multichoice Nigeria’s second price hike in six months. Multichoice, the most popular PayTV operator in the country, recently announced an increase in its subscription prices by at least 25%. This will require its DSTV premium subscribers to go from paying ₦27,500 ($19.77) to as much as ₦37,400 ($27.10), and the premium GOtv subscription to also go from ₦12,500 to ₦15,700.
The last time the Pay-Tv operator increased its prices was in November 2023. They had enacted a 19% increase in subscription prices. The price increase came barely 6 months after they enacted another in July of the same year. “This is like the fifth time under 18 months they have increased prices. Would be better if 90% of DStV’s offering is not trash,” commented Sodiq Agboola, another user on X(formerly Twitter). In the last week, social media has become flooded with comments like these from disgruntled customers, many of whom were not just threatening to cancel their Multichoice subscriptions but had indeed done so a while back. These customer responses on social media responses are symptoms of a larger trend.
Is Multichoice losing touch with its audience?
In 1993, when Multichoice launched its operations in Nigeria, its entry into the Nigerian market marked a significant shift in the entertainment space. The company was offering a pay TV with a wider selection of channels, including international programming, sports, and movies. Multichoice heavily emphasized the novelty and prestige associated with having access to premium content. This means that initially, the target audience likely consisted of affluent Nigerians and those with a strong desire for international entertainment. Eventually, the company introduced cheaper packages, channel selection options, and the budget-friendly GOtv. In 2018, they even considered introducing a pay-as-you-consume pricing scheme. This strategy expanded their customer base. MultiChoice added 1 million subscribers in 2021, bringing the total to 21.1 million pay-TV subscribers.
However, in 2021, MultiChoice, lost over 100,000 DStv Premium and DStv Compact Plus subscribers decreasing another 5%, and DStv Compact and DStv Commercial customers declined by 1%, from 2.9 million to 2.8 million subscribers. The top-end loss is made up for ongoing lower-tiered subscriber growth, increasing from 8.7 to 8.9 million subscribers. However, the mass-market DStv Family, DStv Access, and DStv EasyView subscribers grew by 6%, from 4.4 million to 4.7 million. What it means is that although MultiChoice continues to have more subscribers, it makes less money per subscriber since it keeps losing DStv Premium and DStv Compact Plus subscribers, who are its most valuable subscriber segments.
Last year, Multichoice hiked its prices three times, each time attributing the hike to the rising cost of doing business in Nigeria. They were not out of line. Last year Nigeria’s inflation was all shades of confusing. In November, inflation hit an all-time high of 28%. Multichoice reported a loss of 72 million. Hence they hiked their prices consistently to match the country’s reality. Once again, many customers went online to express their concerns. One customer started a trend with the hashtag, #bycottMultichoice. The hashtag climbed to the top 10 trending topics on X.
The volume of subscriber cancellations (and threats of cancellations) following these price hikes reveals the price sensitivity of Multichoice’s customer base. It suggests a segment that prioritizes affordability. The average Nigerian salary falls between N80,000 and N100,000 ($58-$72). This is the median level, meaning that half of the working population earns less than this amount. The disconnect between rising costs and user viewing habits also suggests that the company’s major customer base is people who value specific content categories. For example, in 2020, MultiChoice Group CEO Calvo Mawela told investors that rugby broadcasts are one of the biggest drivers of DStv Premium uptake in South Africa. According to Mawela, “What we have seen is that as a result of the lack of rugby, you see people coming down, but as soon as rugby comes back, you see people going up.” Yet, despite the return of popular sports on SuperSport, many DStv Premium subscribers didn’t return. Last year, Multichoice lost nearly half a million DStv subscribers in South Africa.
A changing demographics of pay-TV consumers?
The people now have options. Consumers are no longer passive in their entertainment choices. More people are abandoning traditional pay-TV due to rising costs and opting for streaming alternatives. This trend aligns with a report by Digital TV Research that predicts a global decline in pay-TV subscriptions, with a projected decrease of 18 million subscribers. Unlike traditional pay TV, viewers can access content on-demand on various devices, catering to busy lifestyles and a preference for personalized viewing experiences. According to a report by Omdia Research, a tech research-based firm, Multichoice, streaming service, Showmax, accounts for 40% of the continent’s streaming market.
The Competition and Consumer Protection Tribunal has ordered MultiChoice Nigeria to suspend its price increases for its DStv and GOtv packages. The order, brought by consumer rights activist Festus Onifade accuses the pay-TV company of unjustly increasing its prices. Onifade asked the tribunal to put a hold on the increases and not take any intermediate actions that may harm consumer rights. Interestingly, this order was disregarded by Multichoice.
Multichoice’s price increases are merely a result of doing business in Nigeria, currently. In the last year, five multinationals have left the country. Seven Nigerian companies lost N1.6 trillion over the FX crisis. “If there weren’t some kind of alternatives, it would have been worse. That is what is restraining them (DSTV) from increasing their prices to reflect the real economic reality,” one user said on X (formerly Twitter). While these are real concerns, the company’s continued price hikes continue to test the limits of subscriber loyalty.
