From Vestact this morning –
Have you seen the image doing the rounds on social media that compares the cost of DSTV and Netflix? What the graphic forgets to mention is DSTV's sport option, which Netflix does not offer.
If you read through Naspers most recent financials, their Video entertainment division had revenues of $3.7 billion and net profit of $370 million, and EBITDA margins of 16%. Not quite the 40% profit margins that Apple makes on their iPhone. Although the way that South African's gripe about Multichoice, you would think DSTV margins were even higher than that of Apple.
Sports rights cost Multichoice a fortune. For the UK football Premier league, it cost somewhere between R6 billion and R7 billion, that is for the right to broadcast the 2016-19 seasons. Now add the costs of broadcasting rights for other football leagues, cricket, rugby, hockey, boxing, F1, Olympics, golf, and the list can go on. As Multichoice have said before, if you only bought a sport subscription, it would cost you more than the current premium subscription. The revenue from the smaller channels, subsidises the sport channels to bring the cost of the premium package down.
With Netflix having more Emmy nominations than HBO, can we say that the age of internet streaming has officially arrived? I'm very interested to see how Super Sport changes things up to cater for the new generation of entertainment consumers.