The Dish-Disconnectors

Jul 05 2017 13:10
Lloyd Gedye

All around me, people are cancelling their DStv subscriptions.

For the past few months, all I have heard from family, friends and colleagues is, “We have fibre now, we cancelled our DStv subscription,” or “We decided to go with Netflix,” or “I just stream free content online”.

In the US, these consumers opting out of their pay-TV contracts are called “cord-cutters” and the trend emerged in 2007/08.

Faced with a global economic downturn and the launch of new television services delivered over the internet by companies like Apple, Netflix, Amazon, Hulu and YouTube, consumers began to cancel their pay-TV subscriptions.

Apart from cord-cutters, there are the “cord-nevers” – a consumer who grew up accustomed to watching shows online. It is argued that cord-nevers are less likely to ever subscribe to pay-TV services.

A recent study by comScore took a look at the behaviour of cord-cutters.

The report states that cord-cutters tend to come from low- and middle-income homes and they watch significantly less television than pay-TV subscription consumers.

The cord-cutter homes studied by comScore watched 79 hours of online content a month, as opposed to traditional television homes which watch 225 hours of television a month.

comScore argues that it may not just be financial decisions that led to the cutting of the cord; there may have been less need for television.

This again links with what I am hearing from family, friends and colleagues.

“We just don’t watch that much television,” said one family member as to why they cancelled their DStv. A few months ago, while discussing options to watch an English Premiership football game, a colleague tells me we can’t do it at his place, because he has given up his DStv subscription.

Later, as we sit in a pub watching my team beat his, he says they replaced the DStv with fibre and a Netflix account. “My kids love Netflix,” he added. 

When I visited home recently, I discovered that my father’s new television had a button on the remote that takes you to YouTube.

No, my father is not a cord-cutter, he loves his rugby and cricket too much for that, but even a technophobe like him is able to stream content from the internet now.

For a few days while visiting, I didn’t switch to a single regular channel. 

I watched old interviews with writers I like and music videos I hadn’t seen in decades.

I watched documentaries on the origins of drum and bass music, live concerts performed by Radiohead and I even watched The Lathe of Heaven, a 1980 PBS film based on Ursula K. Le Guin’s novel by the same name. 

MultiChoice’s results for the six months to the end of September 2016 highlight the fact that, while the low end of the pay-TV market is stable, the top end, or DStv Premium segment, is contracting.

The DStv Premium segment has fallen from 2.24m subscribers to 2.005m, a 10% drop. In terms of percentage of overall subscribers, DStv Premium has dropped from 22% to 18%.

The allegations of state capture also seem to be having an effect on MultiChoice, with a petition currently being circulated on social media by DStv subscribers objecting to the Guptas’ ANN7 channel on the bouquet.

The over 12 000 subscribers who have signed it want the channel removed. Potentially, this issue could result in another blow to DStv subscriber numbers if not resolved satisfactorily.

No surprise then that facing an exodus of premium subscribers, many of whom are probably cord-cutters, MultiChoice’s video-on-demand business Showmax has recently announced that it was introducing its own original programming. 

Showmax said that it has begun filming Tali’s Wedding Diary, a mockumentary about a Sandton princess and the build-up to her wedding to her property agent fiancé. 

It’s set to be an eight-part series that will premiere on Showmax in December. Another series, a project called iNumber Number based on the 2013 movie of the same name, was also announced.

Will original content attract enough cord-cutters to Showmax to make up for DStv Premium’s lost revenue? Who really knows? What’s clear is the television landscape has the potential to change rapidly.

Which brings me to my last point: in the 8 June edition I wrote about words and how they are given meaning (What exactly is in a name?). When enough people recognise the value embedded in something, the need ?is created for a word dedicated to that value’s meaning.

In South Africa, pay-TV is traditionally delivered via a satellite, not a cord, so the name cord-cutters don’t have the same meaning here. Do we need our own name? What about Dish-Disconnectors?

This article originally appeared in the 29 June edition of finweekBuy and download the magazine here.

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