SOUTH Africans may be cutting back on some luxuries amid falling consumer spend but TV does not seem to be one of them.

Naspers announced yesterday that it had recorded growth at its pay-TV service, DStv, of a whopping 492000 new subscribers in SA in the financial year to March.

The R185bn company now has about 4,5-million subscribers in SA, benefiting from its subsidiary MultiChoice's decisions to introduce lower-end packages, such as the Compact and Family bouquets, which start from R99 a month. These now account for 36% of its subscription base.

The announcement comes as a blow to low-cost competitor TopTV launched in 2010, but has struggled to pull in the 500000 subscribers it required to break even.

At last count in November, that number had just passed 300000. TopTV was unable to provide Business Day with its latest subscription figures yesterday.

DStv's success also comes as the SABC earlier announced plans this year to tackle its falling viewership numbers.

With the migration to digital, the public broadcaster was planning to roll out up to 15 new channels over the next three years, including a dedicated 24-hour sports channel by the end of this year.

The pay-TV business, which represented Naspers's largest revenue stream, grew 15% to R24,1bn, while trading profits grew 11% to R6,3bn.

And it is not just the satellite TV channels that are finding new audiences. The company announced that its on-demand digital movie rental business, Box Office, which was launched in July last year, had also been a star performer with monthly movie rentals averaging 300000 a month.

The service, which is available on the premium package, allows viewers to rent movies at the click of the remote control for R25. This translates to an average of R7,5m in revenue a month for MultiChoice.

Overall, the pay-TV businesses recorded growth of 684000, including 192000 new subscribers across Africa, which helped it surge to 5,6-million homes on the continent.

While it conceded that trading margins were reduced by investment in local content, decoder subsidies and the development of new products, an investment bank analyst said the pay-TV operation had performed well over the past 12 months.

"It experienced better revenue trends in Africa, coming off a low base and especially due to macro and foreign exchange pressure in the first half of the year," said the analyst, who could not be named due to company policy.

Eben Greyling, CEO of pay-TV platforms at Naspers, said the company was pleased with growth of 18% especially after a slow start to the year. Annual growth in subscriber numbers had been about 21% over the past four years, he said.

The company would continue to invest substantially in infrastructure and content, Mr Greyling said.

neethlingt@bdfm.co.za

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