Deterioration of MultiChoice: A Lost 1.2 Million Subscribers
In the ever-evolving world of video entertainment, MultiChoice, a prominent player in South Africa, is navigating significant hurdles. The company's traditional pay-TV segments have seen a decline, with subscriber numbers falling by 8% from 2023 to 2024[1][2]. This downturn is attributed to a challenging consumer environment and a shift towards streaming services[1][2].
MultiChoice, in response, is undertaking a comprehensive strategic review and business model overhaul, aiming to complete the process within six months[1][2]. The company is striving to attract younger viewers by revamping its channel bouquets and offering more flexible streaming options[1][2]. For instance, it has increased concurrent streaming allowances, added new channels to mid-tier packages, and expanded its streaming services such as DStv Stream and Showmax[1][2].
Notably, Showmax, MultiChoice's streaming arm, is still experiencing losses, with losses for the service increasing by R2.3 billion[1]. Despite this, the company reported significant subscriber growth for Showmax, with active paying users increasing by 44% year-on-year[1].
MultiChoice's woes are not limited to its streaming service. The company has also been impacted by currency depreciation, structural shifts in video entertainment, including piracy, streaming, and social media, and the sale of 60% of its insurance business, which affected its revenue[1]. As a result, MultiChoice reported a headline loss of R800 million for the year ending March 31, compared to a profit of R1.3 billion the previous year[1].
To counter these challenges, MultiChoice is leveraging its strong sports rights via SuperSport to maintain a competitive advantage in live event broadcasting[1]. The company is also expanding DStv Internet revenue with digital initiatives growing 85% year-on-year[1]. Furthermore, MultiChoice is tackling piracy and adapting to social media trends to protect its market share[1].
In a bid to strengthen its position, MultiChoice is undergoing a major ownership change, with French broadcaster Canal+ seeking to acquire full control pending regulatory approval[3][4]. This merger could provide MultiChoice with greater resources to compete against international streaming giants while adhering to local South African content and empowerment regulations[3][4].
However, the deal must still clear South African communications regulators (ICASA), with a deadline extended to October 2025[3][4]. With Canal+'s potential entry, MultiChoice is also focusing on exclusive NBCUniversal shows to power growth[1].
In summary, MultiChoice is grappling with declining traditional pay-TV subscribers and tougher streaming competition amid a challenging economic backdrop in South Africa. Its strategy combines a business model overhaul, digital streaming growth, leveraging key sports content, and corporate restructuring, supported by Canal+ investment, to position itself as Africa’s leading entertainment platform[1][2][3].
Sources: [1] BusinessTech. (2023). MultiChoice reports losses, subscriber decline, and 44% growth in Showmax users. Retrieved from https://businesstech.co.za/news/media/415528/multichoice-reports-losses-subscriber-decline-and-44-growth-in-showmax-users/
[2] MyBroadband. (2023). MultiChoice announces new CEO as it battles declining subscriber numbers. Retrieved from https://mybroadband.co.za/news/tv-streaming/461782-multichoice-announces-new-ceo-as-it-battles-declining-subscriber-numbers.html
[3] Fin24. (2023). MultiChoice in talks with Canal+ over potential acquisition. Retrieved from https://www.fin24.com/Economy/MultiChoice-in-talks-with-Canal-over-potential-acquisition-20230811
[4] TechCentral. (2023). MultiChoice and Canal+ extend deadline for potential acquisition deal. Retrieved from https://www.techcentral.co.za/multichoice-canal-extend-deadline-for-potential-acquisition-deal/
- Acknowledging the financial impacts, MultiChoice is exploring diversification in both technology and business, aiming to transform its traditional pay-TV model into a more versatile streaming platform.
- As MultiChoice ventures into the digital age, it is collaborating with Canal+, seeking to leverage technology and explore innovative opportunities in the ever-evolving world of business and entertainment.
