GoTV Free to air product a Knee-jerk reaction?

GOtv free to airGoTV on Thursday announced the launch of a new product, the much awaited free-to-air channels offering. Many have been looking forward to this in a model where you could still access the free to air channels when you run out of subscription time and don’t yet have money to pay for the next month’s subscription. Many have resulted to switching back to the usual TV antennae as the Pay TV goes blank on non-payment.

The Multichoice announcement comes some three weeks after newest Paytv entrant to the market Startimes announced that they will be selling a decoder that will allow one watch free-to-air channels when they run out of monthly subscription. Now I am not saying that any of these is the better option as I am yet to weigh in on these. But coming hot on the heels of Startimes I would opine that GoTV launched this a reaction to Startimes.

Difference between the two terrestrial products is that Startimes will ask you to either pay some Kshs 2000 to upgrade decoders to the free-to-air version or just pay some Kshs 5000 to purchase the new one, while GoTV requires you to forfeit the subsidy they gave you once for being a subscriber. This is a figure of Kshs 2,600 that GoTV calls non-refundable administration fee, no hardware upgrade. GoTV justifies this by saying that the world over Pay TV providers benefit from subscriptions and usually subsidize the equipment heavily. What I don’t understand is how long one would need to be a subscriber to justify not needing to pay the “administration” fee.

Let’s do some math.

Kshs 2600 is some four months subscription fee. Do you see what GoTV just did there? They just gave their subscribers something with their hand still clenched. The average subscriber might be lazy to subscribe in a month where either they don’t have money to pay for the month or are fans of a certain programme like sports, so for that month where there will either be no sports channel airing, you will need to pay Kshs 2600?

In my opinion, GoTV needed to segment their customers, they need to know subscriber habits, measure engagement and with that decide who pays to access FTAs and who doesn’t. Or what do you think?