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Pay TV pays off

PAY TELEVISION experienced a massive jump in audience numbers last year, mainly because DStv went all-out to woo less affluent viewers with a more affordable subscription package offering better soccer coverage. That growth has been matched by a large drop in free-to-air viewing (SABC channels and e.tv) – leaving little doubt where the viewers have come from.

“DStv has been focusing very heavily on its Compact subscriber package – a portfolio of channels specifically for the black market – marketed at a much reduced rate,” says Applied Media Logic MD Kim Weissensee. “Programming includes SuperSport 3 for soccer, Nigerian soapies and Channel O.”

Peter McKenzie, MD of DStv sales arm Oracle, says the Compact bouquet now has 1m subscribers – a third of DStv’s total. Soccer proved the catalyst last year, with viewing boosts from the World Cup and the acquisition of PSL broadcasting rights.

The result was a 45% jump in subscription TV audiences in the first three quarters of 2010, compared with the same period the previous year. That emerges from Media Inflation Watch figures, which monitor advertising rates against audience numbers. The resulting cost per 1 000 viewers reflects the true rate of inflation. Pay TV rates were put up 11% last year, but the huge jump in audience numbers resulted in an 18% decline in true inflation.

Free-to-air’s audiences dropped by 10%, which resulted in an 18% rise in cost per 1 000 – a figure Weissensee describes as “horrific”.

Little is known about the fortunes of the recently launched other subscriber channel, Top TV, with its cheaper packages. But it doesn’t appear to be holding up well against DStv’s aggressive marketing.

Suffering from a loss of audience market share and facing administrative chaos, the SABC lost revenue in 2009 but last year bounced back strongly. Nielsen Company figures show advertising up 18% at SABC, 14% at e.tv, 12% at M-Net group but DStv up 30%.

Another factor behind DStv’s growth is technical. Amps figures previously could be 12 to 18 months behind actual audience movements but that lag has been reduced.

McKenzie notes audiences have grown at both ends of the socio-economic spectrum. “We can no longer be called elitist. We’re becoming mainstream.” 
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