What’s in the price of a DStv bouquet?

On the eve of the start of the much anticipated Barclays English Premier league earlier this month, soccer lovers the country over were shocked to discover that Multichoice Namibia had moved much of the popular football content on its Compact Bouquet. Now, the most popular off DStv’s sports offering is only open on the Premium Bouquet which includes rugby, tennis, cricket, Formula One racing, golf and boxing.

Responses provided this week by Multichoice to the Economist corresponded word for word to responses submitted to South African technology website mybroadband despite an early attempt by the Economist to get a meaningful responses from Multichoice Namibia.
This prompted the Economist to question the motive to move the channel content. Responding to queries, Multichoice spokesperson Selma Kaulinge explained amongst other things, the methodology behind its pricing and channel mix, and the decision to move football off its Compact Bouquet.
“Pricing is determined by a variety of factors, including the quality and cost of the channels it provides, operating costs in each country, leasing of satellite capacity as well as support services. A variety of factors can influence the price of the service including the cost of acquiring quality exclusive content and providing it on early release, the cost of transponder capacity, the customer service levels and other investments in creating an enhanced customer experience.”
Added Kaulinge sympathetically, “we understand that some of our customers are of the view that they would save money if they could choose a genre-specific package like sport, or put together their own package with only the channels they want. Unfortunately this view is incorrect. A large percentage of our costs relates to the acquisition of the rights to broadcast live sports games and premiere entertainment content. Acquiring these rights is extremely expensive.”
In June this year, DStv launched “Express from the US” which considerably cut the gap times between when shows are aired in the United States and locally on its premium M Net channel. Meanwhile, dropping premium soccer content from the Compact Bouquet was done at the beginning of August only after many subscribers had already paid for the month. These viewers then approached the Economist complaining that Multichoice’s unilateral decision has turned into an embarrassing consumer issue.
Premium soccer content is only available on Multichoice’s Supersport channels.
Said Kaulinge “our business model is structured on the basis of a number of pre-determined packages. Bundling channels into packages gives our customers the benefits of economies of scale, since the costs of acquiring content are spread across many customers on many packages. In this way, we are able to offer customers a wide range of channels, with the variety they seek, at various price points which are attractive and affordable to a variety of potential customers.
“This is the standard business model internationally for Pay television for the reason that it is the most effective and efficient means of providing a variety of choice to satisfy consumer demand for sport and entertainment, at the lowest possible cost, which is to the benefit of customers. Offering a genre-specific package for example sport, will actually end up costing the customer more than the current subscription for the Premium package,” concluded Kaulinge.