by Gill Moodie (@GrubstreetSA)  Don’t be afraid of competition in the market, say the business handbooks, but  rather assess you rivals’ strengths and weaknesses. Everyone does this in business plans and it helps new entries in the market or smaller players  to spot the gaps and opportunities.

But what do you do when you’re playing in a market that is utterly dominated by one big player – as On Digital Media’s TopTV that was rescued recently in a complex takeover deal by China’s digital pay-TV company StarTimes  – found with Naspers’ DStv Multichoice? toptv logo

Did TopTV ever actually stand a chance?

DStv was already so entrenched in the local market – and across Africa too. It had nailed down  that absolutely essential – and enormously expensive – element of pay-TV: local and international sports rights.

And it had the ability (and savvy) to counter the new entry’s threat by putting money into a big marketing drive for a cheaper bouquet, the Compact, to sign up  lower-LSM subscribers that were TopTV’s target market.

In the last available full-year financial results for Naspers – for the year to the end of March 2012 – DStv netted 684 000 more subscribers in South Africa and across the continent to reach 5.6-million households in Africa. Ad revenue was up by 18% in South Africa year-on-year.

What could TopTV – which began operating in May 2010 (and  put under business rescue late last year) – have done differently? Did it ever properly assess DStv’s weaknesses and strengths?

I should think that it did, which is why it went the lower-LSM route (without a back-up plan to counter DStv’s response, possibly) – and then later for porn (the one thing DStv does not offer in its content mix).

Personally, I don’t think porn will bring sustainable revenue growth for TopTV because that’s an online game these days but I do think – assessing DStv’s strengths and weaknesses  – there is one crucial opportunity not yet seized upon. Let’s weigh up DStv:


  • It ticks all the content boxes for a premium pay-TV operation. It offers movies, sport, doccies, music, news, family shows, kids’ shows, lifestyle. Hard to beat them there.
  • Customer service seems  good by SA standards. (I’ve personally never had a problem.)
  • It offers movies-on-demand so it’s moving with the times. (Don’t forget Naspers also owns Mweb so there are lots of synergies for the future for them to jump into TV-on-demand.)
  • It’s branding is excellent and it generally looks very slick – those in-house promos are very good – and there is not yet an irritating, time-wasting surfeit of adverts.
  • It has good original content that appeals to a broad range of people in South Africa.

Yikes! Does it have any weaknesses? And the answer is “not many” as it has not rested on its laurels but, chiefly, I’d say:

  • The premium bouquet is very expensive while the cheaper compact bouquet doesn’t offer too much of substance.
  • The TV-listings magazine is hard to navigate.
  • There is simply too much content on offer in the premium bouquet. I think many customers would be happy to pay a little less and get fewer channels or (pay attention TopTV) to be able to choose from different packages of channels at various prices.

I know this is complex for a pay-TV operator to manage but even years ago, when I lived in the UK, Sky offered different packages (have a look here for examples) and I do think it’s a key way to differentiate yourself from DStv – before they beat you to it and, once again, you’re scrambling to catch up.

Happily, TopTV now has plenty of financial clout behind it in StarTimes, which is operating in 16 countries in Africa and has seven-million pay-TV subscribers in China, so they should survive and thrive as a second-best in the market (and that’s not always a bad thing in business). However, first-to-market always has an advantage so it’s best TopTV gets moving.

Pay-TV is lucrative game but it’s also a ruthless one.

– SA’s leading media commentator, Gill Moodie, offers intelligence on media – old and new. Reprinted from her site Grubstreet.

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One reply on “How to save TopTV: let customers pick packages of channels at various prices”

  1. TopTV is going to need much more than merely financial clout. If this backing does not materialize in their content offering within the next two months, I will be one less customer of theirs. I’ve been with them since their very first month of broadcast three years ago, a time when rumor & promises of HD-content, PVR functionality, and expanding content, were rife! This hope and expectation has all but evaporated with the loss of no less than 5 very watchable channels, one being a children’s channel (an area where TopTV really perform poorly). The material on Top-branded channels are repeated to the point where you can merely run them from memory now without the aid of a television. My suggestion to TopTV in the interim would be to have only two subscription levels, drop the price of the premium subscription by R100 p/m, and add more content to the entry-level bouquet. This must be augmented by a huge marketing drive to quadruple subscriber base to over 600k viewers. This would make marketing added content to their portfolio so much simpler/cheaper.
    Quite frankly DSTV Compact is presently better value for money than TopTV premium, which isn’t saying much. MultiChoice is hugely expensive entertainment.

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