DSTV/GoTV will see a "inflationary" price increase in 2024 due to Multichoice's financial strain

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Multichoice, the parent firm of DSTV, has disclosed that it plans to increase prices for all of its African subsidiaries in 2024. According to MultiChoice CFO Tim Jacobs, the expected increase is “inflationary,” as he stated in a Daily Investor interview.

According to Tim Jacobs, the company’s inability to maintain a strong balance sheet is the cause of the anticipated increase. He asserts that price hikes for DStv that are in line with inflation are required to maintain the service’s sustainable expansion and high caliber of programming.

For an extended period, particularly in South Africa, we have set our product prices at a lower than 50% inflation rate. We have been keeping an eye on the consumer’s finances. As things stand right now, the likelihood is that inflationary price hikes will be observed throughout Africa as well as in the South African market.

The parent firm of DSTV is under more pressure to grow income now that the business is experiencing financial difficulties, as seen by the most recent results. The company’s financial reports for the six months ending September 30, 2023, showed a 1% decline in overall revenue to $1.53 billion (R28.33 billion). Its revenue in South Africa decreased by 3% on its own.

Multichoice revenue declines

Additionally, Multichoice revealed a $49.2 million (R911 million) loss in its most recent financial report. Compared to the $3 million (R55 million) profit realized during the same period the previous year, this constituted a significant decrease. This decline occurred despite the 4.3% increase in subscription fees for DStv packages that went into effect earlier this year for South Africa and its other African subsidiaries, including Nigeria, its largest market, which experienced several price increases in 2023.

He clarified, “We have to be a little bit more disciplined about recovering some of our costs at this point because of load-shedding and the pressure on our revenue number.”

Jacobs said that the business would make sure it could keep providing its clients with excellent content because it is the real reason they are purchasing its goods. But to achieve it, the business must generate enough revenue to stay in operation.

But to do that, we must continue to provide our investors with profitable outcomes. We’re attempting to strike a balance between the things we have control over and the discipline of running our organization extremely efficiently,” he remarked.

Nigerian DSTV pricing increases

Nigeria, the major market for Multichoice, has seen several increases in rice prices in 2023. The most significant of them all, though, was perhaps the December price rise that resulted in a 20% increase in all DSTV items. Just six months had passed since the company’s previous price increase in May, and days had passed since it disclosed a $72 million deficit in its third-quarter financial report.

The DStv Premium bundle saw a 20.4 percent price increase with the most recent increase, going from N24,500 to N29,500. The DStv Compact Plus increased from N16,600 to N19,800, a 19.2% increase. The Compact bundle went from N10,500 to N12,500, a 19% increase. The Comfam parcel was shifted by 19.2 percent from N6,200 to N7,400.

According to Multichoice’s most recent financial report, the company attributed its $72 million loss to dealing with a wide range of difficulties, including taxation and logistics, in addition to the disastrous effects of the naira’s ongoing devaluation.

An insider with the company claims, “We have raised our fees. We earn naira yet purchase material in dollars. We will face harsh criticism if we discontinue a channel or cease obtaining content that our audience is accustomed to. We purchase diesel. We have to pay taxes. even before this year, with the elimination of fuel and cash subsidies. We pay licensing fees in the billions. We run multiple offices. We must compensate our employees.

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Joshua Samuel

A conscientious writer with a knack and passion for story telling which spans across different sectors and segments. I love telling stories in writing and bringing quality, authentic and timely information to everyone everywhere.

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