Capitec looks to disrupt pay-TV market with DStv packages

Capitec has partnered with pay-TV company MultiChoice to launch a new product that will allow the lender’s customers to select their preferred shows and reduce their subscription costs.

Capitec, the country’s biggest bank by customer numbers, said on Tuesday it would unveil the product at the end of October.

The offering has the potential to attract clients from rival banks and will be available exclusively to its 23.2-million clients — in particular those who use its app.

“The one product I am excited about is the DStv stream which we are launching in October, where consumers will not have to buy a whole DStv package and a monthly fee of R1,000,” Capitec CEO Gerrie Fourie said. “A consumer will be in control and pay for only what they want to watch.

“You need to be a Capitec client to qualify for the DStv streaming option. What will happen is that clients will go onto a Capitec app and buy a voucher and watch for whatever they would have paid for. A client will be able to say ‘tonight I want to watch this particular programme and pay for it’ or, for example, buy a package of European soccer,” Fourie said.

The arrangement comes as DStv’s subscriber base is declining. MultiChoice’s results show a drop of 1-million subscribers, in particular in Nigeria and SA. The company, which is being acquired by French powerhouse Canal+, blamed the subscriber exodus on a tough economic environment. MultiChoice reported a loss of R4.1bn for the year ending March 2024, indicating it is technically insolvent.

The streaming agreement with DStv comes after a similar agreement with Showmax in August. As part of the deal, discounted Showmax vouchers are now available to all Capitec clients via its banking app.

Showmax’s standard R99 package is available at R49 for Capitec customers, while the R45 mobile option costs R22. Showmax Premier League, a R65 package, costs R34. Capitec said 47,387 Showmax vouchers had been sold on its app since launching on August 13.

According to Statista, the TV and video market in SA has experienced healthy growth in recent years, driven by changing customer preferences and local special circumstances.

The research and data firm said customer preferences had shifted towards on-demand streaming services and digital platforms, leading to a decline in traditional TV viewership. The availability of high-speed internet and proliferation of smartphones have contributed to the growth of the market.

“SA consumers have shown a growing preference for on-demand streaming services and digital platforms. This shift can be attributed to several factors, including the convenience and flexibility of accessing content any time and anywhere,” it said.

“With the rise of smartphones and the increasing availability of high-speed internet, consumers are opting for streaming services that offer a range of content options. This trend has led to a decline in traditional TV viewership, as consumers are no longer bound by scheduled programming and can choose what they want to watch at their convenience.”

Capitec’s half-year results show the group is making inroads in attracting higher-income clients, shedding its reputation as a low-income, unsecured lender. They also show the bank’s dominance in the 20-60 age group, where it has 18.8-million active clients.

The Stellenbosch-based lender has been on a big drive over the past few years to introduce value-added products, including the renewal of vehicle licences. It has processed more than 170,000 such renewals since the launch in February last year.

The lender has a 40% market share in SA’s prepaid data and electricity market.

khumalok@businesslive.co.za