Pay-TV operator woos consumers after completing business rescue
- Author: Gershwin Wanneburg
- Published: Wednesday, 07 June 2017 09:17
It’s not every day that you hear about a CEO slumming it in the townships of Thembisa and Mthatha.
But that’s exactly what the head honchos at Star Sat did as the pay-TV operator tried to clamber back from the brink of collapse.
The legwork seems to have paid off. Debbie Wu, CEO of Star Sat owners On Digital Media, said its subscriber numbers had boomed since last year.
“We were struggling but we are coming back,” she told GetBiz.
Although she wouldn’t give specific figures, Wu said subscriber numbers had jumped by 438% since April last year.
Star Sat’s subscriber numbers languished around 110,000 in 2014, according to reports.
Star Sat is hoping that a new decoder and jazzed up technology will help it win more customers.
Part of its strategy has been to take customer feedback on board.
In line with that, they are launching the Combo 3 in June. It’s an improved version of the current decoder, including a PVR recording function that can connect to an external hard drive and a multi-viewer function.
The customer, Wu said, is very much LSM 1 to 3.
She and fellow executive John Yan have been to these people’s homes and they know what they want.
“From this community, we know what this life is. It’s not a Sandton life. The consumer is very value-sensitive. Every cent counts. They want to know, if I pay R100, what can I get?” Wu said.
“But, even though they’re value-concerned, they deserve respect. They like you to hear them and they want you to hear what they need.”
Many didn’t give Star Sat a chance a few years ago, when the Chinese firm Star Times Media bought a 20% stake in On Digital Media and rebranded its ailing Top TV.
Tech entrepreneur Arthur Goldstuck was quoted as saying that Star Sat was a “train wreck in slow motion”, after news emerged of Star Sat’s successful business rescue.
But the company has managed to stay afloat, thanks to funding from its parent company, Star Times Media.
Again, Wu won’t go into detail, but she said the cash injection was substantial.
She also attributed Star Sat’s rebound to its ground-up approach.
Unlike industry giants, Star Sat preferred to be hands-on, she said. They do that by cutting out the middle man and working directly with their dealers.
Since September last year, they have recruited around 1,000 installers who are trained by Star Sat to also operate as salespeople. The aim is to make entrepreneurs out of these people, so that they end up running their own businesses.
To attract more young people into the business, Star Sat fronts them the cash to buy stock. They’ve also done away with the call centre model, where customers call a hotline to dispatch an installer.
“The whole atmosphere in our industry is very traditional. That tends to make the strong stronger and the weak weaker,” Wu said.
“The traditional way is for the broadcaster to say: I won’t talk to the consumer directly, I’ll deal with a third party. The South African consumer is very well educated, they know their rights. Big companies don’t want to deal with that.”
While Star Sat is a long way off the millions of subscribers enjoyed by DStv in South Africa, it hopes that it can make headway in its own market.
“We’re taking a more down-to-earth business model because we believe the customer will tell you the truth,” Wu said.
Despite its South African misfortunes, Star Sat appears to be thriving in the rest of Africa, with a presence in more than 20 countries.
The Media Online recently cited research which found that Star Sat was among three companies that are leading the pack in Africa, along with DStv’s MultiChoice and France’s Vivendi.
The study was conducted in 35 countries in the last quarter of 2016.
“MultiChoice will continue to have a good market position, although this will be challenged by StarTimes. StarTimes will also challenge Canal Plus in the Francophone countries,” said researcher Simon Murray.
“StarSat is a Chinese company that is principally known for manufacturing set-top boxes. Its expansion in Africa has largely been down to it obtaining DTT licences in several countries (and maintaining good relations with government).”
In fact, DTT (digital terrestrial television) could prove crucial to Star Sat’s success in South Africa. The digital migration process in South Africa has been held back by years of legal and political battles, but Star Sat may have the upper hand, as it has already rolled out DTT in other African countries.
“(DTT) is the direction the country should follow … We would like to be part of that,” Wu said.
Star Sat has survived the worst, without having to retrench staff, Wu said.
“We rose from the grave and stood up on our feet and started growing. The reality is, we are still weak, but we have room to grow.”