South Africa operations
MultiChoice South Africa continues to be the largest investor in sport in South Africa, and plays a meaningful role in further developing the local film and production industry.
Our contributions to South Africa
3 683 full-time employees (FY20: 3 521)
ZAR7.2bn total tax contribution (FY20: ZAR7.4bn), with ZAR3.4bn paid and ZAR3.8bn collected
ZAR420m spent on CSI initiatives(1) (FY20: ZAR211m)
ZAR11.5bn contribution to preferential procurement (FY20: ZAR10.4bn)
|(1)||Includes non-cash advertising contributions of ZAR260m in FY21 (FY20: ZAR79m).|
Our operating performance
In FY21, the South Africa segment accounted for 64.3% (FY20: 66.5%) of group revenues and 42.8% (FY20: 43.2%) of our group 90-day active subscriber base at year-end.
90-day active subscribers
The South Africa segment demonstrated a resilient performance, despite having to contend with heightened consumer pressure, content production and live event disruptions in 1H FY21, and the devastating impact of the COVID-19 lockdowns on the hospitality industry. Notwithstanding these challenges, we were able to grow our 90-day active subscriber base by 0.5m subscribers and recorded the second highest growth in new subscribers in history. This is testament to the ongoing attractiveness of our products, especially as consumers spend more time at home.
Growth in mass market segment
Our mass market segment in particular sustained strong growth of 14% YoY despite an average 4.2% price increase at the beginning of the year. We remain excited about the mass market opportunity and regard our Access base as a springboard for future revenue growth and ARPU uplift as income levels of consumers improve over time. We are already seeing some of this materialise through upgrades within the mass segment, driven by intentional campaigns and upgrade strategies.
Our mid market segment increased by 3% YoY, with growth invigorated by our decision to keep DStv Compact prices flat this year, given the heightened level of indebtedness and consumer pressure that we witnessed. In addition, our sponsorship of the PSL Premiership, renamed the DStv Premiership, is having a positive impact on driving awareness of our DStv brand.
The Premium segment was impacted by a combination of factors including affordability, disruptions to our general entertainment line-up and a lack of live sport, ultimately impacting revenue generation negatively. While there is still a healthy base of Premium subscribers, we are seeing a gradual shift in revenue contribution, as the mid market and mass market segments continue growing and becoming more prominent in our revenue mix. Nevertheless, we still see potential for the mid market segment to upgrade to Premium tiers as economic circumstances improve in time. We have focused upgrade strategies such as open periods and preview episodes to help customers discover shows that they might enjoy on higher packages.
The ongoing shift in subscriber mix, combined with the impact of content line-up disruptions including limited live sport and the inability of our commercial subscribers to trade, resulted in ARPU declining by 4% from ZAR290 to ZAR277.
The introduction of several new products and services this year such as DStv Rewards, ADD Movies and DStv Communities, as well as the introduction of 12 and 24-month subscriptions, are important tools to improve retention and ARPU.
A substantial portion of our market has sporadic income and is not continuously active. Therefore, we have a large base of dormant customers who own a decoder but are not always active. In this context, activating and retaining dormant customers is critical to our success. Active days, a measure of the proportion of the year that our customers are actively connected to our services, finished on 293 days. This was nine days higher than the prior year and, although the lockdowns had some positive impact, this was a significant achievement considering the challenges faced this year.
The COVID-19 pandemic had a negative impact on advertising spend across all mediums. TV spend in South Africa declined by around 18%. DStv Media Sales managed to grow market share over this period due to various initiatives, including flexible pricing, active trade marketing and the development of new products. DStv Media Sales also worked on a business transformation project involving training for its employees around launching the business into the digital future.
We continue driving operational efficiencies and digital agility, with COVID-19 accelerating the pace of digital adoption in the business. We strive to create digital customer experiences supported by clear design principles of Easy to Join, Great to Stay and Watch your Way. Our customer ecosystem is now fully digitalised such that a customer can join, watch, pay, get help and be rewarded entirely online.
Customer interaction on self-service channels
In digital customer service, our efforts continue yielding results. Our WhatsApp, web and DStv app self-service platforms continue delivering a strong uptake with user growth of 77% overall. Digital payments more than doubled, and our self-service channels overall account for 70% of all customer interactions, reducing the need for in-person contact. In addition, our call centre is now fully operational offsite, with employees working from home while improving customer satisfaction levels.