On Tuesday, South African pay-TV giant MultiChoice reported mixed results [pdf] for the half-year to September 30, 2024, citing an “extremely challenging” operating environment. MultiChoice revenue reached 25.4 billion rand ($1.4 billion), down 10% year-on-year, but up 4% on a constant-exchange-rate basis that doesn’t account for currency fluctuations. Pre-tax trading profits, which had previously risen to 6.6 billion rand ($364 million), fell by almost half, weighed down by foreign exchange losses of 2.3 billion rand ($127 million), especially in markets such as Nigeria and Zambia, which lost a lot of value against the U.S. dollar. The company responded earlier in May by raising its license fee in Nigeria by 25%. The losses could prompt MultiChoice to raise prices again.
MultiChoice’s Showmax streaming service experienced strong growth, with a 50% increase in subscriber numbers and 86,215 hours of viewing time, driven by a R1.6 billion ($88 million) investment in local content production, marketing and advertising.
Nevertheless, the group reported a decline of 1.8 million active subscribers (defined as main subscribers active during the reporting period), mainly from the rest of Africa, since the first half of 2023, bringing its overall base down to 14.9 million. This represents an 11% increase.
The decline was due to power outages and load shedding in key markets such as Nigeria and Zambia, which left viewers struggling to access the service, leading to lower engagement, customer dissatisfaction and ultimately higher churn rates.
Falling active subscriber numbers led to average revenue per user (ARPU) across all streaming platforms falling to US$8 per user (-14%) in other African markets and US$289 in South Africa, up (+3%).
Globally, the pay-TV market stagnated while other streaming services expanded value-added services or increased spending. MultiChoice is still improving, growing its cash position to 10.1 billion rand ($558 million), helping to cut costs for its South African competitors.
Other successes included a surge in sales of KingMaker, a gaming and sports betting product that became popular in Nigeria, bringing in revenue of 68 billion rand ($41 million). The company’s fintech division, Moment, also gained traction in South Africa and other sub-Saharan territories.
MultiChoice will continue to invest heavily in Showmax (it is in a “high investment cycle,” according to the company) and focus on original content and marketing to compete with Netflix and Apple TV. The company is optimistic about Showmax’s profitability after ending its streaming partnership with Comcast.
