Multichoice, the Naspers owned entity that runs the DSTV satellite service have what they call their “annual increase”. This is basically a time in the year that they announce the increase in their charges for the various packages that they have on offer.
The announcement to the increase usually comes at the end of February – beginning of March (read ‘any day now’) and are effective as of 1 April. The year 2016 looks to be no different as the South African headquartered business has a number of monetary decisions to make in order to ran a viable business .
The last price increase having been effected in April 2015, with Zimbabweans subscribers seeing an adjustment of between 3-10%, interest will be high from this end of the border as the Rand (currency in use in South Africa where Naspers are based) has weakened considerably against the United States dollar (main currency used in Zimbabwe), weakening by about 33% to date.
Naspers currently “import” most of their content from USA (a considerable amount of sport coming from Europe – English Premier League and La Liga), either from content producers or distributors and they have to pay for this in foreign currency. Zimbabweans will be all too familiar with how this works, seeing that we went through our own experiences of inflation and loss of value in our local currency. When one buys an item from out the country, you have to sell it at a price that is reflective of the prevailing exchange rate in order to recoup your money and to make a profit.
That Multichoice South Africa managed to go the whole year (from April 2015 to date) without making any increase in their DSTV South African packages, even after the Rand lost value of almost 33% either points towards the killing that they are making (a loss of value of one third didn’t affect their bottom line) or that they were able to withstand the pressures through alternative means such as advertising and the sale of content through products such as ‘BoxOffice’.
3 factors that will determine whether Zimbabweans may be subjected to an increase in DSTV packages:
1. Price of content
Content (TV shows, movies, rights to sports games) are bought in US$. So that the Rand has lost value and that Nasper will be reducing their prices is a hope that one should quickly dash. Should Nasper be getting content at a cheaper price then they will have the flexibility to reduce their pricing. They have started investing in creating their own content but it will take a bit of time for them to produce both the quantity and quality that is found in Hollywood.
The less competition that Multichoice are faced with, the less pressure they are under to charge less. In Zimbabwe, the only real competition that they can have is just waiting to be put in a grave (DeadBC) and talks of even more channels coming coming this March are wishful thinking. The film industry is a multi-billion dollar industry and for us (Zimbabweans) to produce quality content will take us years at best, while ZBC are not known to pay those that make the shows for them.
Talks of services such as Netflix taking DSTV’s cheese are nowhere near to happening, as one needs a reliable internet service, together with unlimited internet and not may people can afford such an option right now.
Inflation is defined as “a sustained increase in the general level of prices for goods and services”. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service.
Zimbabweans need no explanation of the term as we are all too familiar. What will be interesting to note, is that we have been experiencing deflation – the very opposite of that, where prices have been coming down, and local subscribers will argue that since the subscriptions are “inflation based”, then DSTV should reduce their prices in Zimbabwe. However, two two reasons above will keep that from happening.
Talking to a number of people about what they think about DSTV prices points towards people wanting a reduction. Some have even accused the disparity in prices as a reason as to why many are opting to subscribe to DSTV South Africa instead.
Do you think that DSTV Zimbabwe will be reducing their rates? What are the reasons that you think that this will happen?