In 1998 I wrote a letter to DSTV and warned them that their arrogance is going to cost them their business. Over the years DSTV has become the poster boy for a company that exploits its customers to the point of extortion. They were riding the wave of first mover advantage. But, instead of building a long-term, sustainable business, they milked us for all they could.
One of the things they did was to charge customers as much as they could. It wasn’t a case of adding a reasonable margin, but instead how much they could get away with. That can work as long as you have the monopoly, but not when you get some competition. The low-cost airlines do the same. They would sell flights for as much as they could, instead of trying to make a reasonable profit margin. That is why a flight from Johannesburg to George can cost twice as much as a flight from Johannesburg to Cape Town, which is twice the distance. It’s exploitation and greed.
Companies that make easy money because they have a monopoly often exploit their customers and are examples of the ugly side of capitalism. They never last in the long term.
DSTV ignored my warnings and continued on their path. In 1999 Netflix launched and today they launched in South Africa. DSTV will not be around in 2025. Their days are numbered. They milked the cow and it’s now dry.
Instead of focusing on innovation and building a long-term, sustainable business by being customer-centric, they just killed the goose that lay the golden egg. Or rather, Netflix came and stole the goose.
Netflix just stole the goose.
DSTV has been warned numerous times about their arrogance. Arrogance in companies is often demonstrated through the way it treats it’s customers. DSTV has by far the worst call center in the country and despite many complaints refuse to change its ways. It’s almost impossible to deal with them and the frustration levels of customers are high, never mind the exorbitant cost of the monthly subscription. The DSTV website is one of the worst websites in South Africa and despite many complaints they continue to ignore their customers. Double billing is rife and I have come to the conclusion that purposeful mismanagement cannot be ruled out. It’s just happening too often.
Again this year, at the beginning of January thousands of customers were incorrectly debited twice. The call center acts as if they were not aware of the double billing, treating their customers as if they are fools. Of course they knew.
DSTV opened the door for Netflix. They realised this a few months ago and attempted to block them by launching Showmax. Unfortunately too little, too late. Netflix now has the first mover advantage and DSTV is trying to play catch-up. With a whole bunch of pissed off customers, I don’t think they’re going to get very far.
It’s going to take a little while for consumers to become Netflix savvy, but its going to happen. When devices become more user friendly and connectivity becomes even cheaper, there will be a mass exodus from DSTV.
Now we just need Netflix to get some of the big attractions in their bouquet, such as local sport, soapies and the like. It won’t be long before you have absolutely no reason to be a DSTV customer.
Arrogance in business is fatal.