On Tuesday, MultiChoice, South Africa’s pay-TV giant, reported mixed half-year results for the period ending September 30, 2024, citing an “extremely hostile” operating environment.
Revenue reached R25.4 billion ($1.4 billion), declining by 10% year-on-year (YoY), but up by 4% on a constant currency basis, if currency fluctuations are not accounted for. Trading profit before tax, which previously grew to R6.6 billion ($364 million), fell by nearly half, weighed down by a R2.3 billion ($127 million) forex loss, particularly in markets like Nigeria and Zambia where currencies depreciated sharply against the US dollar. In May, the company previously responded by increasing subscription fees by 25% in Nigeria. With this loss, we could see MultiChoice inflate prices again.
MultiChoice’s streaming service, Showmax, saw strong growth, with a 50% subscriber increase and watch hours reaching 86,215, boosted by a R1.6 billion ($88 million) investment in local content production, marketing, and advertising.
Despite this, the group reported a 1.8 million drop in active subscribers—defined as people who have active primary subscriptions during the reporting period—since H1 2023, mostly from the Rest of Africa, reducing its total base to 14.9 million. This represents an 11% decline.
The decline was attributed to power cuts and load-shedding in key markets like Nigeria and Zambia, which led to lower engagement, customer frustration, and ultimately, higher churn rates as viewers struggled to access services.
Due to the receding active subscriber base, the average revenue per user (ARPU) in its Rest of Africa markets declined to $8 per user (-14%) across its streaming platforms, while it increased to $289 (+3%) in South Africa.
Globally, the pay-TV market plateaued, with other streaming services either expanding their value-added services or ramping up their spends. Nonetheless, MultiChoice saw improvements: its liquidity position rose to R10.1 billion ($558 million), and it led to higher cost-savings among its South African peers.
Additional wins included a revenue boost from KingMaker, its gaming and sports betting product which gained momentum in Nigeria, bringing ₦68 billion ($41 million) in revenue. Its fintech arm, Moment, also gained traction in South Africa and other Sub-Saharan regions.
MultiChoice will continue to splurge on Showmax—which it describes as being in its “peak investment cycle”—focusing on original content and marketing to rival Netflix and Apple TV. It is optimistic about Showmax’s profitability, after ending a streaming partnership with Comcast.
