FNB data shows that consumer spending on audio and video streaming services such as Netflix, Amazon Prime, Spotify and YouTube increased by around 70% between the pre-Covid-19 period and June 2022.
Raj Makanjee, managing director of FNB Retail, said the bank’s retail customers were spending up to R190 million per month on audio and video streaming subscriptions.
“The flexibility of these platforms allows families to customize their own experience and playlists, with the convenience of consuming content whenever they want. The use of on-demand content platforms is expected to continue as more providers introduce services to give consumers more choice.
This is consistent with data from debt advice service DebtSafe which shows that pay-TV services – including DSTV, Netflix and ShowMax – are consistently among the top monthly household spenders in South Africa, ranking only below are rental/bond costs, fuel and food expenses.
While DStv remains a pervasive force in South Africa, the pay-TV operator has seen relatively less spending in recent years as consumers consider new platforms and personalized content.
An analysis by My Broadband found that MultiChoice continues to raise DStv’s prices every year, even as it bleeds its most valuable subscribers, and despite growing competition from more affordable video streaming services.
The satellite TV broadcaster dominated home entertainment for decades, due to a lack of competition. Its de facto monopoly on video entertainment and premium sports streaming has allowed it to raise prices every year, with little or no risk of customer departures.
Growing competition has forced MultiChoice to consider new platforms and products. During its 2021/2022 financial year, it has also seen a reduction in its mid-range customer base on the Compact, Family and Extra packages.
The increase in low-end subscribers on its Access and EasyView plans was not enough to offset its losses in the premium and mid-range segments.
MultiChoice has been forced to raise prices to try to maintain a healthy average revenue per user (ARPU) and ensure continued profitability.
Read: MultiChoice points to disappointing subscription revenue in South Africa