Why is DSTV offering free Disney +?

Many DStv subscribers have noticed – yes, there has been marketing This Relentless – For those who have chosen DStv Rewards and registered their interest, it is offering three months free Disney + streaming service.

Separately, it has announced three bundle offers for its premium, compact plus and compact packages where customers can add Disney + to their subscriptions and save up to R49 per month. Promotional ads for the service also run across DStv’s various channels (and are booked under the DStv branding).

Read: Multichoice has added Disney + to its DSTV streaming service [Apr 27]

Why would the continent’s largest pay TV operator actively direct its South African subscribers to rival over-the-top (OTT) streaming services? After all, a customer watching Disney + is probably not watching DStv content at the same time.

Customer information.

The three-month free Disney + provider campaign seems to be designed to ensure there are up-to-date communication details (albeit part of the base award) for multichoice customers. All messaging is centered on the customer’s cellphone number as it is used to activate Disney + subscriptions (which subscribers should have done by May 15). In November, it revealed that more than 500,000 subscribers have signed up to its rewards platform since its launch. One estimates that this number has now easily exceeded one million.

It is important for its customers to have up-to-date contact information as it is able to remind customers who have not subscribed to them.

It is especially prevalent in the middle and mass markets. In South Africa, DStv had 8.9 million active subscribers in the 90 days before 30 September. But at the end of September, the number of active subscribers was only 8.2 million. Based on these statistics, there are 700,000 subscribers who were active at any time during these three months but were not active for any reason at the end of September.

Still, why is DSTV effectively offering a free trial of Disney +?

Three free months aligned with Disney’s own incentives to sign up early for Disney +. Here, customers who have indicated their interest will receive 12 months for the eight prices (one-time payment of R950 vs. R1 428). This means that Disney is comfortable offering a free trial because it expects to convert a significant percentage of these subscribers to paying customers by August 17 when the campaign ends. It remains to be seen how aggressively DStv tries to convert this pool of subscribers into bundles.

On Wednesday it announced three bundle offers:

  • DStv Premium + Disney + for R909 per month
  • DStv Compact Plus + Disney + for R619 per month
  • DStv Compact + Disney + for R499 per month

In each instance, customers save R49 per month compared to the total cost of the Disney + (R119) and the relevant DStv package. Customers will have to pay an additional R110 per month for PVR decoders and use an “Authorized Decoder” (probably Explora Ultra which offers OTT apps in addition to DStv). It is unknown at this time what he will do after leaving the post.

The bundle subscription offer seems to be the complete opposite unless one considers the global counterparts of multichoice.

Sky offers bundled subscriptions with Netflix, for example (“included as standard”). In the United States, cable providers like Xfinity (Comcast) have done exactly the same thing, launching the Xfinity Flex in 2019, a free streaming-only box for its customers who no longer have a TV, and rely on it only for height. – High speed internet access. The box contained Netflix, Amazon Prime Video, HBO, Peacock (NBC’s OTT service), Hulu and others.

Billing relationship

Ben Thompson in Excellent Stratechery argues that “only companies already have a billing relationship with the customer… which makes them particularly effective in customer acquisitions. That’s why Netflix, YouTube, etc. are all willing to share the revenue.” In the US, the situation is a bit shorter because only companies provide high speed internet.

In the South African market, DSTV still has a billing relationship with 8.9 million subscribers. Of these, 1.4 million are in the premium segment and 2.8 million in the mid-market. This is a sweet place for OTT services. Even the one million plus (potential) reward subscribers are extremely valuable – DStv has additional analysis on this basis.

The key to why DStv is happily helping Disney + subscribers sign up.

The theory is that anyone who wants to use the OTT service is going to sign up anyway, so why not take control of the DStv billing relationship?

This is for a customer whose two bill services are now less likely to be canceled.

Explora Ultra allows subscribers to add Netflix to their subscriptions. Even if these OTT streaming services are enabled in the decoder, general usage limits apply (additional devices may be used, etc.).


There is a potential additional incentive for DStv to sign up for Disney + subscribers.

In a new region like South Africa, Disney will have a very clear idea of ​​what the cost of customer acquisition is. If it is able to tap into a large existing base, say those four million mid and premium DSTV subscribers, and convert one percent of them to Disney + at a price that is attractive, surely it makes sense?

There is nothing wrong with doing this, although the Competition Commission must turn around as part of its plan to add streaming services to Multichoice’s offer as part of the 2020 investigation (which it has done, albeit not aggressively).

Many of these OTT services already do this.

Thompson argues that traditional TV will continue to leave the “sports and news bundle”.

Again, this is even more subtle in the context of South Africa where local content still has immense value and international studios, many of which now have OTT services, are still more likely to be willing to sell programming to traditional (pay) TV providers. More attractive rates than trying to bundle content as part of an OTT service.

HBO points are a good case. Can its OTT service attract millions of customers in SA? Compare this to revenue by selling its content (primarily) on M-Net. The conversation is also true: should be scaled (for South Africa). To do?

This type of calculation is being done by different content creators.

Multichoice (DSTV) / Disney further complicates the relationship with the two having a solid historical partnership where Multichoice is currently a distributor of six 24-hour channels owned by Disney (two each of National Geographic, Disney, ESPN). They signed a distribution agreement until 2024 last year. These fees remain profitable.

For now, with Disney +, both sides have won. Customers too. And you can bet that there will be more bundles on the horizon.

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