Was driving through Ikota shopping complex, near VGC (Lagos), earlier today when a very visible banner stopped me in my tracks. There on the doors of Broadview Supermarket was boldly displayed; Startimes Decoder, N7000 plus one month subscription FREE! Best of all, monthly subscription is only N1,000 for 36 channels! Of course, I parked my car in the nearest free spot to check the stuff out. The nice sales lady in attendance was glad to show me what was on offer.Very nice programming, for the price, and the display would match the competition, DSTV’s non-HD channels. With an array of stations like E! Entertainment, etv (South African Station), MGM, BBC, Aljazeera, TBN, Kidsco, MTV Base, CCTVN, Trace, Discovery World, Bollywood TV, Setanta and a host of other Nigerian and foreign channels, it was impressive.
“Competition!”. That word gives be pleasurable feelings, deep in the pit of my belly. The recent crash in the price of acquiring DsTv (Digital Satellite Television) equipment from about N18,500 to N9,000 (Nine Thousand Naira) came as a shock to many. Time was when possession of the almighty DsTv system was something that gave you “bragging rights’ at pubs! When somebody told me he just saw the price slash in the papers, “Na lie!”, I blurted out unconsciously. But with Startimes’ offer, now I begin to see the picture more clearly.
StarTimes, a collaboration between NTA and its Chinese partners StarTimes of China, came into the DTH saltellite market then with a bang! They touted advantages such as:
- N9,000 (Nine Thousand Naira) equipment cost
- No need for any special installation (Plug N Play!)
- Insusceptibility to inclement weather
- Portability of equipment
- and above all, a friendlier introductory monthly subscription rate of N1,000.
People exclaimed “Wao” and rushed to them like “Puff-Puff”
StarTimes Centres and Dealerships started springing up left and right…
Now, wait a minute,something told me DsTv will not fold it arms and allow its potential and existing customers to be snatched by this new entrant.
- Their first response was to introduce a new bouquet of N1,500 to partially counter the N1,000 subscription rate offered by StarTimes. This, of course, merely addresses existing DsTv subscribers who may have been toying with the idea of switching over to “enemy camp”. It does not really provide any incentive for newbies to jump on “DsTv HighWay”
- DsTv then applied the masterful stroke of slashing their equipment cost to THE SAME PRICE as StarTimes’. Take that, bloke! Case closed!
What salient lessons can we draw from this struggle, the struggle for our monthly donation (subscription) by these two companies?
The brains behind the StarTimes project – no doubt – saw a yawning market in DTH services in the country.
With the failure or comatose nature of cable and satellite companies like TrendTv, Trumpet Internet Television (TiTv), Frontage Internet Television (FiTv) and more recently, HiTv and DaarSaat– they must have thought that all they need to hit the fianancial jackpot is easy, “Offer good service at the right price”.
Well, current events show that it is not so simple…
You may have demand for a service (the market), have correct pricing, have the spread (the NTA backing) – and still fail in business. If the competion is established, and has over-developed financial biceps, you need to think outside the box.
To the “warring” parties, it shows that “leverage” (and the way you use it) is everything in business. DsTv already has the customer base, and arguably, the better financial base too. DsTv must have long broken even, having operated in Nigeria and a number of African Countries for years. They are therefore very able to engage this new entrant in a war of prices. Maybe that is why they are still beating around the bushing, reducing equipment costs instead of subscription cost. They can even go to the extreme of offering their decoders FOR FREE (even if temporarily). This is not likely to send them into financial oblivion. It is doubtful if StarTimes – having negligible customer base – can attempt to engage DsTv in this kind of fight! However with adequate Government backing, Startimes may be able to carve a sizeable market for itself.
StarTimes needs to do something that has nothing to do with price. It should be an added service of some sort. What, I do not know.
CONSUMERS / DEALERS
As consumers, it showcases the wisdom of not being an early adopter of anything new (especially in the technology world – where an established gladiator already exists). I will keenly and carefully watch what steps StarTimes will be forced to take, now that all the balls are firmly in their court.
As dealers, the lesson here is never to put your eggs in one basket. I am sure people who went into the DaarSat dealership big-time are now biting their metaphoric fingers! When a company is new and small, it is always better to take baby steps – growing with them.
Additionally, it is wise to carefully define your target market.
Am I writing StarTimes off? Not in the least!
For them to survive this price war with Dstv they will need to re-think their business strategy. And fast too. For the life of me – if I am asked what strategic steps StarTimes can adopt to get out of this strangulation, I am likely to just shake my head and walk away in bewilderment!
That is the honest, ungarnished truth!