Kenya: Pay-TV Firms Plan More Content At Reduced Rates

Distribution

Local Pay-Television viewers will enjoy more content at reduced prices as competition for subscribers among two players hots up. The protagonists- MultiChoice Kenya and GTV- have unveiled their game plan for 2008 that will see them improve packages and offer lower prices, a move that sets the stage for a bruising battle for control of the local Pay-TV market that has remained sluggish over the past decade.

Now, both players are dangling the pricing card as a way to stir up the Pay-TV market, which for long has been considered a luxury in most homes. This, besides expanding their number of channels, notably with more local content, is emerging as the best bet to crack the lucrative although difficult Pay-TV market.

The latest entrant, GTV, is promising to cut its rates to below those charged by market leader MultiChoice Kenya as it races to maintain a foothold in the local market. GTV maintains that the penetration of services in the Pay-TV arena has been held back by high installation fees and monthly charges.

Earlier, GTV was talking of a price drop of up to Sh700 (US$10.35) per month, over a period they did not specify. MultiChoice Kenya, on the other hand, is working on another round of price cuts as it seeks to grow and defend its market turf from GTV and Oxygen Digital Television.

The Pay-TV scene has witnessed a number of price cuts in the past six months since GTV entered the local market, prompting a shift in the market structure where MultiChoice had maintained a monopoly.

MultiChoice was the first to lower prices to Sh1,750 (US$25.88) for a bundle of 33 channels before the entry of GTV that arrived with two bundles of 15 and 13 channels selling for Sh2,750 (US$40.67) and Sh1,750 (US$25.88) respectively. The GTV entry forced MultiChoice to unveil another lower cost bundle of 27 channels for Sh1,350 (US$19.96). Another round of price adjustments is aimed at stirring up the sluggish demand for Pay-TV products.

In Kenya, despite booming growth in telecommunications such as the online and mobile phone sectors, few Kenyans subscribe to TV services that charge a monthly fee. Of three million households in the country with TVs, fewer than 30,000-or one per cent - subscribe.

This compares poorly with the two per cent penetration levels in Africa, 93 per cent penetration in the United States and Europe whose penetration levels range between 15 and 36 per cent. MultiChoice is working on a strategy that will see it increase channels with more local content. GTV is also promising new channels and "better content" in 2008 and beyond.

(Business Daily (Nairobi), 28 January 2008)