Over the past decade, various pay TV newcomers have tried to take on DStv, the digital satellite service owned by Multichoice, an arm of South African media giant, Naspers. It is in a battle for a share of the 23 million subscribers that make up Africa’s fast-expanding pay TV market. So far, none has been able to win.
The latest to try is TSTV, a startup pay TV company that’s just launched in Nigeria. Perhaps in a sign of concerns around DStv’s dominance as a premium TV distribution platform, Nigeria’s government has already given TSTV its backing by promising a three-year tax holiday to help it get off the ground.
From a programming perspective TSTV’s hopes of traction are largely hinged on offering popular premium sports content, one of the key elements satellite and cable TV distributors have used to build loyal (and at times, resentful) subscribers around the world. But there’s just one problem with TSTV’s ambitions: it’s unclear if the company has any agreements to broadcast the most popular content of them all, the English Premier League (EPL).
TSTV lists beIN sports channels (which broadcasts the EPL in North Africa) as part of its programming package but that’s been shrouded in controversy with a purported letter from beIN refuting any agreement with TSTV making the rounds on social media in Nigeria. beIN did not respond to Quartz’s emails seeking to clarify the authenticity of the letter but TSTV has denied infringing on beIN’s rights.
TSTV did not respond to Quartz’s email enquiries.
But despite the latest competition in Africa’s largest market, DStv is likely to retain its hold there as it has elsewhere. Its dominance is down to a mix of its diverse content portfolio which range from exclusive rights to popular sports leagues to long-running investment in entertainment and movie content. Backed by Naspers, Africa’s most valuable company with a market cap over $100 billion, very few competitors can match DStv’s deep pockets. With more than 12 million subscribers DStv’s market share exceeds 50%, says Sa Eva Nebie, research analyst with Dataxis, a market research firm.
Its hold on broadcast rights of the EPL, arguably the most watched sports league in Africa, is an example of this. As the the value of EPL’s broadcast rights has risen sharply along with its global popularity in recent years, that cost presents a barrier to gaining market share for new entrants.
DStv has no such problem. Last year, it paid £296 million to secure rights to broadcast EPL in sub-Saharan Africa from 2016 to 2019, and, in April, it extended its agreement until 2022. Its hold on the rights have even come under government scrutiny: in Kenya, regulators have unsuccessfully tried to get the company to resell its rights to local channels to “level the playing field.”
But soccer is not the only thing keeping DStv ahead. Its significant investment in original local content, especially the hugely popular Nollywood, through its Africa Magic channels, have also proven a major draw with subscribers that aren’t crazy about soccer. Just as important are its broad offering of high-profile Hollywood content including movies and series as well as popular Indian soaps and Mexican telenovelas. DStv’s dominance is also down to its wider reach and retail infrastructure—thanks to its 20-year head-start in the pay TV business.
One way competitors have looked to challenge DStv is by targeting the mass market many of which cannot afford DStv’s more expensive subscription prices. StarTimes, a Chinese-owned pay TV company, has grown rapidly since the turn of the decade by offering cheaper monthly subscriptions (it’s most expensive bouquet is currently four times cheaper than DStv’s).
With prices as low as $2.50, the company has garnered 10 million subscribers across 30 African countries. But DStv has since responded by launching GOtv, a less expensive pay TV company with monthly packages as low as $1. StarTimes offers a mix of news, entertainment and sports content (it will broadcast the FIFA soccer World Cup next year).
TSTV isn’t the first Nigeria-owned company that’s tried to test DStv’s hold on the Nigerian market. Back in 2007, newly-launched HiTV beat DStv to EPL rights and looked to build its subscriber base using football as its crown jewel. But that proved inadequate as, with much of its other content considered second-rate, many Nigerians maintained their DStv subscriptions. By 2011, HiTV had shut up shop amid allegations of high-level mismanagement.
As sports rights inflation rises quickly and many major African currencies crashing versus the US dollar in the last two years, it has forced DStv, like other African businesses, to raise their prices fairly frequently. This has engendered a lot of resentment with consumers who feel they have no choice but to use the satellite service with all the top programming. Some have called for tougher regulation of DStv.