Afrikaans Annual Financial Statements
Naspers
 

PERFORMANCE REVIEW

IN THIS SECTION

PAY TELEVISION

BlacklistWith limited broadband infrastructure and almost no cable access in Africa, the group offers digital satellite, digital terrestrial and other pay-television services, such as mobile television. The wide range of products covers all income groups. To meet rising demand for mobile applications, we offer apps on tablets, and smart and feature phones that give our subscribers access to the popular DStv Catch Up services, live streaming of sport content, information, communication and self-service functionality (including payments).

+20%
+16%
+13%
 
 


Total subscriber growth for the year 1.3m households

Sales

The group subscriber base now exceeds 8m households. Subscribers in South Africa grew by 556 000 during the year, taking the group’s base in this country to over 5m homes at year-end. Growth was driven by a combination of aggressive marketing spend and increased viewership, thanks to investing in local content.

The new DStv Explora, our next-generation, high-definition personal video recorder (PVR) was launched during the period and helped push the PVR base up to 953 000. BoxOffice, the video-on-demand service for PVR Premium subscribers in South Africa to view the latest blockbuster movies, continues to grow in popularity, with an average of 529 000 movie rentals per month. Despite a tough economic environment, television’s share of advertising revenue continues to grow.

In sub-Saharan Africa (outside South Africa), MultiChoice produced record subscriber growth of 764 000 to end the year at over 3m households. The DStv subscriber base rose by 323 000 while the GOtv base grew by 440 000.

The group continued to invest in building its DTT network under the GOtv brand, which is now available in eight countries through two packages (GOtv and GOtv Plus) offering 20 to 40 channels. Many countries in Africa have started migrating from analogue to digital television, with Rwanda being the second after Tanzania to switch off analogue signals.

Package launches

Our customers’ needs mould the refinement of our packages. In South Africa DStv Extra was launched in June 2013, positioned between the Compact and Premium packages. The DStv Select and DStv Lite packages were rebranded to DStv Family and DStv Access with an improved selection of channels.

Content

The focus on providing content that resonates with our viewers continued, with 36 new channels launched across a number of genres in South Africa.

Local channels that connect with South African audiences remain a significant driver of the MultiChoice strategy. The launch of five new local content and community channels (Mzansi Bioskop, Mzansi Wethu, kykNET & Kie, Tshwane TV and Cape Town TV) is contributing to this strategy. The production of local content, which ramps up viewership across our channels was further expanded and included telenovelas such as Isibaya, our first local drama Rockville, local versions of internationally recognised reality formats and some 100 locally produced movies (bubblegum movies).

The story of South Africa’s journey to democracy was honoured in a documentary, Miracle Rising, aired on the History channel. The father of the South African nation was also honoured in a special tribute channel, the Madiba channel.

Outside South Africa, additional channels for the DStv English market included SuperSport Select, Ebony Life, Spice TV, Hip TV, Channel ED, Fox Crime, Telemondo, CBS Drama, CBS Action, JimJam and MGM. New channels from the M-Net stable included M-Net Movies Zone, M-Net Series Showcase, M-Net Series Reality and M-Net Series Zone.

 


New channels for DStv Portuguese subscribers included SuperSport Maximo 360, TV Cape Verde, Disney Junior, Afro Music Concerts and Crime and Investigation.

MultiChoice invests significantly in productions featuring local content across Africa. Original African programming and channels remain a key focus for our sub- Saharan Africa business. Specialist local productions included Mashariki Mix, Kona, Jim Iyke Unscripted, The Money Drop, Tinsel, Star Gist, 53 Extra, Jara, The Johnsons and the ever-popular Big Brother Africa.In Nairobi, Kenya M-Net and SuperSport have built their own studios to increase production of local shows. These state-of-the-art studios and outside-broadcast vehicles in Nigeria and Kenya enable increased local coverage of sport and additional local productions.

Supersport funding

SuperSport remains the biggest funder of local sports on the African continent, funding roughly 70% of all sport in sub-Saharan Africa. It continues to invest in local leagues at all levels by paying broadcast licence fees, upskilling local administrators and production crews, improving facilities and assisting federations to obtain sponsors.

Sport enthusiasts enjoyed the successful production and broadcasts of SUPERUGBY, the Rugby Championships, Premier Soccer League, India and Australian cricket tours of South Africa and local football leagues of Nigeria, Kenya, Zimbabwe, Zambia and others across the continent.

The rights to broadcast the UEFA Champions and the Europa League football, the Winter and Summer Olympic Games, Formula One motor racing, the Australian Open tennis, Indian Premier League (IPL) cricket, National Basketball Association (NBA), Nigeria, Ghana and Angola football leagues, as well as Angola basketball, were either acquired or renewed on all platforms and in all languages throughout our broadcast territories.

New technologies

MultiChoice continued to invest in new technology with the launch of its DStv Explora decoder. There are now 18 HD channels on the DStv platform.

Several online developments have helped improve our customers’ experience:

BoxOffice was expanded to 20 titles on Explora and 68 titles on BoxOffice Online.
DStv Catch Up on Explora provides an expanded catalogue of content.
The new DStv Catch Up and SuperSport apps for iPhone and iPad offer content for downloading or streaming.

Regulatory and competition

The legislative and regulatory environment in Africa continues to develop in line with and, in some cases, more progressively than in most developed countries. MultiChoice’s pay-television, communication and network operations all function in regulated industries, making government and regulators key stakeholders for the group. One of the most significant and exciting developments in broadcasting in our markets is the migration from analogue to digital terrestrial television (DTT).

Competition from traditional broadcasters will continue to intensify in all sub-Saharan regions, primarily on DTH and DTT, with all players targeting the mass market with low-cost or free propositions. The biggest threat to the business in the medium term is from new players, local and global, including major telecommunications companies that will deliver online video content directly to consumers.

Irdeto

Conditional access market revenues continued to mature, and lower average selling prices negated volume increases. Newer areas, such as multiscreen, have boosted service revenues compared to conditional access, which remains predominately product-orientated. Increasingly, innovation is occurring in these newer areas, with 12 patents registered in the review period.

Given a more optimal blend of activities between mature and growth areas for a better cost profile, Irdeto returned to profitability in the year ended March 2014.