When Kenyan telco Safaricom entered the pay-TV fray earlier this year with its 4G-enabled Big Box decoder, East African rival Zuku — spurred on by the region’s heated price wars — chose the moment to take a swipe at the competition.
“You saw their cheap price,” the company said in an advertisement, “now see their cheap quality.”
The ad came just weeks after China’s StarTimes — the continent’s fastest-growing pay-TV operator — lowered monthly subscription fees in Kenya and slashed connection charges by nearly 50%. Just days later, South Africa’s MultiChoice halved the price of its HD decoder in the country.
The price wars underscore the high stakes for pay-TV operators across the continent. While MultiChoice’s DStv still owns a dominant share of the pay-TV marketplace, with nearly 8 million African subscribers, rivals are increasingly staking their claims to the lucrative market.
“When we launched our service, many people didn’t take us seriously,” said Efe Atiyio of Tanzania’s Azam TV. But in less than two years, the company has nearly doubled its channel offerings, to more than 90, and has grown its subscriber base to more than a quarter of a million.
Atiyio said the company succeeded by “reach[ing] out to the people who never thought they would have pay-TV.”
While rosy economic forecasts continue to paint a portrait of a rapidly growing African middle class, pay-TV operators like Azam TV have found that success in Africa often lies in packaging their bouquets at rock-bottom prices.
Since launching its African arm, Star Africa Media in 2007, StarTimes operates its pay-TV platform in 14 countries with an audience base of 4.6 million subscribers.
VP Michael Dearham is clear about what’s driving the company’s success.
“It’s value for money,” he said. “We are not a Rolls Royce operation. We don’t profess to be a premier package, [like] DStv.”
Consumers aren’t complaining. While MultiChoice still owns the rights to lucrative premium content — such as English soccer’s Premier League — StarTimes has enjoyed rapid growth by targeting mass-market subscribers with bouquets for as little as $3 per month.
In 2013, a joint venture between the company and the government of Nigeria allowed it to overtake MultiChoice as the largest pay-TV provider in Africa’s biggest economy. And in East Africa, StarTimes has 39% market share of the region’s 1.6 million subscribers, edging out MultiChoice, which has 38% of the market.
Yet with 100 million TV households — and just 13 million pay-TV households — on the continent, StarTimes and other pay-TV operators have only scratched the surface.
“Our vision … is flavored by leveling of the playing field,” Dearham said. “To allow every African family access to digital entertainment [and] affordable entertainment.”