Just when you think you’ve made a move that will please your clients –and none if any seems amused. What do you do? We all know DStv is not a free service for sure — the recent price reduction on all DStv bouquets has not gone down well with a section of its subscribers. After the price cut announcement last week, we received an avalanche of comments our different social media platforms, and looks like Multichoice Uganda still has their work cut out for them.
The most common theme in the comments was people expressing their frustration with the pricey subscription which are still too high for an ordinary Ugandan to afford. Many believe that if it were not for premier league, Dstv could already be struggling in the Ugandan market by now. But, how low would you want to pay for your DStv subscription?
The Premiership Cash cow
But ask yourself this, Imagine you were in charge of pricing or apart of the strategy team at Multichoice Uganda, what’s the least you’d expect people to pay for their DStv subscription? Putting into consideration all the premium channels the PayTV company offers.
At a recent announcement, Multichoice Uganda stressed the fact that majority of their input costs are in US dollars and as they revised the recently price reduction hoped hoped they won’t experience any further currency devaluations or other unexpected increases in costs for the remainder of the year.
Multichoice Uganda knows its strengths and harnesses them pretty well and have the largest market share in the pay tv sector. They have the synergies and economies of scale in place, where by they can afford to pay for a channel once and distribute it to their brands like DStv and GOtv.
In the comments we received, some argued that this move by DStv was just because they are soon facing stiff competition from Kwese TV who recently launched in Uganda. Kwese satellite TV promises offer PVR decoders at about UGX 150,000 and all live NBA games, premium entertainment channels and they believe a lot of people will jump ship.
The football diehards still think that this is still a rip-off and that only the live sports is keeping DStv competitive. With cheaper bandwidth expected in the near future, making online streaming easier is also expect to have a ripple effect on DStv who will keep reducing their exorbitant fees.
The fact is that if they still have the premiership and champions league, they still have that monopoly. Azam and Kwese TV will still struggle, unless you watch low resolution content. For the so called DStv monopoly to be broken, it will require for the rules of the of the game to change;
- The premiership can be shown by more than one provider,
- BeIN is legalized (to be discussed later),
- Ugandans just lose their interest in football, (which is practically impossible)
Code cutting is not yet an option in Uganda
For the code cutters (those who prefer streaming to cable or satellite TV), the option of using 3G or 4G mobile network internet is out of the is a no go. With the poor infrastructure in Uganda, a few companies seek the opportunity to invest into Fiber to Home services.
The Wananchi Group recently launched their Zuku Fiber product, that offers high speed unlimited internet and TV services at a fraction of the cost. Even if most Ugandans found their prices very competitive and favorable, Zuku still has very limited in coverage and a very slow roll-out of their services.
The BeIN Effect
While Multichoice has the rights to this monopoly especially when it comes to sports, they have to know some of their customers are now more tech-savy and aware of other substitute products out there. BeIN Media Group, a Quatari based company was recently said to be infringing on the digital space already occupied by South African-based Multichoice’s Dstv. UCC recently declared the use of their set top boxes in Uganda illegal. Once customers buy and install them, they automatically get leeway to some channels offered by BeIN in the Middle East but for which DStv is the sole authorized distributor in Uganda.
Just like DStv, BeIN has broadcasting rights for major football tournaments in various European countries. Subscription to BeIN is said to be UGX375,000 for 3 months, while subscription to MultiChoice has now been revised down to about $77 (UGX 280,000) per month. As more Ugandans connect to Bein or OSN, MultiChoice’s market share will keep reducing by the day. The company claims they have made loses because they have invested significantly in the content they bring to Uganda so when another company broadcasts the same it impacts on them.