MultiChoice, the parent company of DStv, is navigating what it calls the “most challenging operating conditions in almost 40 years,” marked by a significant loss of subscribers, foreign exchange pressures, and stiff competition from global streaming platforms. In its interim financial results for the six months ending September 30, 2023, the company reported a decline of 800,000 subscribers, while profit fell sharply by close to R7 billion.
This downturn is primarily driven by the economic struggles across African markets and extreme currency fluctuations, which have cut deeply into MultiChoice’s bottom line. The company highlighted that these currency pressures reduced group profit by nearly R7 billion, reflecting an extraordinary weakening of several African currencies against the dollar. Further, inflation and economic slowdowns have reduced consumers’ disposable incomes, contributing to the decline in subscription renewals.
Faced with these setbacks, MultiChoice has accelerated its cost-cutting initiatives, targeting R2.5 billion in annual savings after already achieving R1.3 billion in the past six months. CEO Calvo Mawela expressed confidence that the measures taken will stabilize the company’s finances and allow it to return to a positive equity position by the end of November.
As traditional pay-TV faces mounting challenges, MultiChoice is increasingly shifting its focus towards streaming and digital services. Showmax, MultiChoice’s streaming service, reported a promising 50% increase in paying subscribers year-over-year. This growth was backed by a substantial R1.6 billion investment during the period and strategic partnerships, such as one with Comcast, to boost Showmax’s regional content and technology capabilities.
The company is also diversifying its product offerings to tap into additional revenue sources. Newer services like DStv Stream, DStv Internet, and DStv Insurance showed robust revenue growth, while the KingMakers platform reported a 27% increase in active users in Nigeria. In South Africa, MultiChoice’s newly launched SuperSportBet is showing early signs of traction as the company expands its portfolio beyond traditional entertainment.
Despite these challenging circumstances, MultiChoice retains a strong liquidity position, with over R10 billion in available funds, and access to R4.4 billion in undrawn facilities. The report comes as French media giant Canal+ considers a R30 billion acquisition of the company, a move that could reshape MultiChoice’s future as it seeks to balance growth in digital services with the struggles of its pay-TV business.
Overall, MultiChoice is leveraging both cost-cutting and digital transformation strategies to navigate a difficult market, aiming to establish a stronger foothold in the competitive African entertainment landscape.
