The MultiChoice deal with Netflix and Amazon Prime Video is a case of “if you can’t beat them, join them”.
This is according to analyst Nesan Nair, senior portfolio manager at Sasfin Securities, reacting to news that MultiChoice will add content from international online streaming platforms Netflix and Amazon Prime Video as a service in a bid to keep premium subscribers and lure new customers.
Faced with stiff competition from overseas streaming services, the pay-TV operator is looking to bring Netflix and Amazon video content in its upcoming updated Explora decoder.
The company has been losing its premium subscribers for some time, revealing it’s losing roughly 100 000 subscribers year-on-year.
“People want to watch what they want to and, more importantly, when they want to. Therefore, these video-on-demand (VOD) streamers have a much more preferred offering than cable, which gives you access to 200+ channels when you only want 10 and it’s much cheaper,” Nair says.
However, he believes the deal will help MultiChoice retain its customers, because the company is now “really marketing their infrastructure as a platform – most people already have the infrastructure and, depending on how they roll it out, it may even be cheaper than having to get an Internet connection. We will have to see.”
Researcher and media analyst at Africa Analysis, Nozi Dikgale, says the deal is good for the pay-TV operator but cautioned on the cost of the service.
“This will obviously depend on how the service is positioned in the market. The pricing will also play a critical role as well for customers who will find value in the service once it’s bundled to DStv and such customers will continue subscribing to DStv.”
The trick here, Dikgale says, would be to try and find the middle ground and offer customers most of the content that would make them find value in subscribing for the services at the right price.
Explaining the change of goal posts by MultiChoice, which previously complained about Netflix, she says: “Perhaps the company also came to a realisation that some premium customers who are still subscribing to DStv love to have both DStv and Netflix as well as other VOD services.
“The availability of multiple OTT [over the top] platforms enables people that have Internet access to have broad content libraries to choose from. The deal between MultiChoice and Netflix and Amazon Prime Video will create a shared value among the subscribers.”
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