DSTV In Trouble From Pirates

Kenyans are always looking for an opportunity to cut corners, ostensibly to make a saving. That is why we have so many fly-by-night-get-rich-quick-schemes. However any such schemes are always patterned with a view to parting a fool from his or her money. No so the two pirated DSTV schemes running in most middle to lower income Nairobi Estates and probably elsewhere countrywide. They both promise and deliver an otherwise unattainable service at affordable costs as well as make millions for their owners. Could this be termed a win-win situation? For the consumer and pirate, maybe, but not for Multichoice Kenya.

There is the DSTV Sambaza scheme that provides illegal connections to anything from a few flats in one block to a whole neighbourhood of hundreds, even thousands of homes by cable. The “operator” acquires a legal connection from DSTV, buys more decoders that are connected with a view to allowing the consumers view multiple channels. This one operates more or less the way a hotel distributes channels to different rooms. If you want to distribute 10 channels then you buy 10 decoders. DSTV Sambaza is very difficult to control, because the visible dish is one and the cabling may not be visible and could be included as the building construction is on-going. For a fee of anything between 200/= and 1000/= a month, Kenyans are enjoying illegal but good TV at MultiChoice Kenya’s expense.

The other service available is the DSTV Uncoded, which uses a Chinese made Satelitte Decoder that is connected to two satellite dishes. Essentially this scheme has managed to disarm DSTV’s primary strength which was the encoded signals. With their permission, you were given a decoder that deciphers their signal and identifies you as a genuine client. With their signal decoded and with no way of knowing who has decoded it and where because the unique card and decoder are thrown away, this scheme spells trouble in capital letters. The uncoded decoders and installation are going for 35,000-40,000/= with the added bonus of free TV forever or at least until the strong arm of the law catches up with the unfortunate consumer! All the DSTV channels are open to view including those in the Indian, French, Portuguese and West Africa Bouquets.

I believe there are another five variations of the two schemes mentioned here. Ingenious but criminal is what they all are. Who is to blame? Is it the customers who need affordable services? The installers who need to make a certain number of connections to remain afloat? The technicians who are paid peanuts for slow connections? The Computer Whiz kids in Kenya and China breaking the codes? The greedy businessmen running the services? DSTV in South Africa who are not able to put together bouquets that mean something to tens of markets they are in? Is it the local MultiChoice operations that seems unable to read the local market or is unable to get out of the controlling shackles of the “home” office that dictates products familiar in South Africa, but alien to Kenyans?

I have heard someone recently say that he has no qualms buying pirated music because it is the only way an African can get back at the Western world that stole our natural resources in centuries past and continue to perpetuate the brain drain in the current century. That might as well be true and can offer some semblance of comfort and justification for what is essentially a crime. If you purchase pirated music from the west, most likely you will do the same to local music. Touché. For a Kenyan who can afford the purchase price that is a vile attitude, but not so for hundreds of thousands of Kenyans who cannot afford to buy the monthly bouquets that DSTV offers locally.

DSTV is however not a Western company, but South African. The Kenyan operation is ironically part owned by the public through KBC. Although it is no secret that DSTV targets the high end of the market and indeed during their wars with GTV they made overt and un apologetic statements to that effect, they are dealing with a product in short supply which universally leads to un satisfied demand and subsequently a lucrative black market. It’s ironical that the bouquets they sell to Kenyans are glaringly different in content and price to what they sell in South Africa. For instance the DSTV Compact bouquet contains Super Sport 3 in South Africa, but not so in Kenya! If the Kenyan version had just that one channel, it would be the biggest money spinner for them, but instead they are happy to keep a small band of 10,000 connections majorly populated by Premium Bouquet customers paying 6000/= rather than 200,000 DSTV Compact customers paying 2500/= or less. It all boils down to strategy, an attribute that South African companies have lacked in their foray into Kenya and Multichoice seems to be headed at full speed in the direction of fulfilling this prophesy.

In a recent meeting with installers, the mandarins at Multichoice were close to using strong arm tactics in an effort to blaming installers for the sprouting illegal connections. The installers on the other hand are demanding a higher fee per official installation. With few official connections it is obvious that Multichoice are in a vicious cycle with minimum options. The easiest to implement is the regular time-tested increase in bouquet cost that is easily blamed on costs of acquiring programming and inflation amongst other run-on-the-mill excuses that Kenyan consumers are known to take lying down. Unless a shift in strategy is forth coming, the besieged Multichoice management will continue to face disquiet from installers, unquenched customers, illegal connections and the ubiquitous elephant in the room that they have managed to ignore for over a decade- the mass market. With the World Cup coming up in the next couple of months, activity in the DSTV Sambaza and Uncoded area will be near hysterical. Unless Multichoice targets the mass market with well-thought out products, I see DSTV facing mounting challenges in the future.

They have made hare-brained attempts to reach this mass market through liaisons with partner KBC who have an arrangement with Radio Africa’s Kiss TV and Radio Jambo for exclusive rights to broadcast matches. K24 is also being touted as a sports TV. KBC happens to be a shareholder in K24 too and the connection is obvious. It is evident that Multichoice has no idea where the mass market lives. They need help to reach the mass market before someone else or something else gets there before them.

In a half page advert in the Sunday Nation of 25th April, DSTV are requesting all their clients to change from the C-band dishes (the old big ones) to the smaller ones ostensibly because they have “no capacity to hold new channels”. In addition those currently viewing-band (IS10) service using certain decoder models (PAN 630, 635, 645, 642, DSD 1110 and SMS 9876) are also required to return them to DSTV for a swop with a newer decoder. Obviously they want to issue clients with “secure” ones that cannot be used to Sambaza or un-code.

Despite the current and anticipated challenges, Multichoice/DSTV has been a good vehicle and window for local talents. Take the local shows like Patricia, think of African Magic Plus channel that has recently started to show East African movies. Not to mention the high quality of production that goes behind the few Kenya Premier League matches Super Sport beams, as well as local rugby action. Local TV Stations have also jumped at the opportunity to be beamed via satellite on the DSTV bouquets. KTN, KBC, NTV and Citizen are all on board, while K24 are set to join soon. Through this medium local television has been able to reach far-flung areas that could not be reached via terrestrial masts. We could lose all these if DSTV should decide to leave Kenya.

DSTV has always been under threat from new and emerging satellite TV providers and were actually shaken by the entry of the short-lived GTV that promised so much, yet delivered so little. Their collapse is attributed to financial woes visited on them by the world financial meltdown of 2008/09. Does that mean under different financial circumstances the model for cheap satellite TV is feasible? There have also been feeble attempts to sell Digital set boxes as free2view alternate to satellite TV, but I see that as a con and an attempt to package digital quality TV as cable or Satellite TV. There is a distinct difference in content. As we get closer to the 2012 deadline to switch to Digital TV, the set boxes will cost much lower than the current 7,500/= with its offering of 28 free TV channels. Though benign, the entry of digital TV is a minor threat that DSTV should not ignore.

Other threats include the type that comes from the ground via the fibre optic cable. Zuku has run an online cable offering targeting the same market that DSTV does for about a year now. There is talk of KDN launching their own product soon as is expected of other ISPs trying to maximize on the expanded bandwidth by bundling voice, data and some TV.

Good luck to DSTV. So much more needs to be done!

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