Zimbabwean Tycoon offers to make EPL matches available for free: Does this signal bad business for DStv in Africa?

On Wednesday, the Premier League announced that it had closed a deal valid for the the 2016/17 and 2018/19 seasons with Econet Media, owned by a Zimbabwean tycoon, Strive Masiyiwa. This deal gives Econet Wireless free-to-air broadcasting rights for the English Premier League (EPL) in sub-Saharan Africa.

“We are very pleased that Econet Media has chosen to invest in the package of free-to-air broadcasting rights that we have made available in sub-Saharan Africa. Premier League clubs enjoy passionate support across sub-Saharan Africa and these rights are important to ensuring that as many fans as possible can follow and enjoy our competition,” said Premier League Executive Chairman, Richard Scudamore.

Under this deal, Econet will be able to air one live Saturday afternoon Premier League match on its Kwese Sports platform each weekend of the season. The rights also come with the weekly preview and review shows and are going to be available in 50 countries in the region. Kwese will assume the role of an agent for the rights and it will handle their distribution across free-to-air channels across sub-Saharan Africa.

However, this announcement may not be good news for MultiChoice Africa Limited, which offers video entertainment services in Africa through its digital satellite television service, DStv. This is because the company has been enjoying the monopoly of showing premier league matches in most African countries over the decades.

2016 has been a tough year for MultiChoice Africa Limited. The company has been affected by the fall in prices of oil and commodities coupled with the devaluation of some local currencies. This has also led to financial strain in their operations since it incurs most of its costs in dollars.

Currently, the company is under pressure from its customers in some African countries. In March, its subscribers in South Africa were hit with an 8.6 percent price increase across its bouquets. While in Nigeria, it had to reduce its prices by about 50 percent in order to retain its subscribers in Africa’s largest economy. The company has also been under pressure from the Consumer Protection Council (CPC) of Nigeria, since February 2016, as the agency gave MultiChoice Nigeria a number of directives which they must implement within a period of 90days.

According to report from Digital TV Research, DStv had 2.24 million subscribers outside South Africa by September 2015, down from 2.56 million six months earlier and down from 2.36 million in 2014. The report also estimates that this total fell to 2.16 million by the end of 2015, with 2016 also expected to be tough.

“DStv’s problems stem mostly from its rights to exclusive premium content, especially sports. Exclusive content rights for premium content such as English Premier League soccer are usually paid for in US dollars. DStv has been compelled to increase its local currency subscription fees to cover the shortfall due to devaluation. As a result, DStv appears more expensive to locals.”

Last year, ahead of the English Premier League, which is the highlight of many fans’ television experience, DStv gave soccer fans the shock of their lives. The satellite coverage company announced that all EPL matches had been shifted to the DStv Premium bouquet and subscribers were not happy about it.

Considering this latest development gives Econet Wireless free-to-air broadcasting rights for the English Premier League (EPL) in sub-Saharan Africa, does this mean bad business for DStv?

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