MultiChoice Blames Subscriber Loss on Economic Str...

MultiChoice Blames Subscriber Loss on Economic Strain Across Sub-Saharan Africa

Oscar J Jeke- Zim Now Reporter

MultiChoice Group has attributed the loss of 1.2 million DStv subscribers over the past financial year to worsening economic conditions and structural shifts in the entertainment industry.

The company cited mounting pressure on household spending across sub-Saharan Africa as a key factor.

According to its latest financial update, MultiChoice’s active subscriber base declined from 15.7 million to 14.5 million. This includes a loss of 589,000 customers in South Africa and 591,000 in the Rest of Africa segment, which covers key markets such as Nigeria, Zambia, and Zimbabwe.

The group pointed to a combination of economic turmoil, rising inflation, and operational challenges—such as frequent power cuts and fuel shortages in countries like Zambia, Zimbabwe, Malawi, and Nigeria. Civil unrest in Mozambique also disrupted services and dampened subscriber activity.

"Significant financial disruption for economies, corporates, and consumers across sub-Saharan Africa" has severely impacted performance, the company noted in its commentary.

It also highlighted industry-wide changes, including increased piracy, the growth of global streaming platforms, and the impact of social media in drawing viewers away from traditional pay-TV services.

Despite the subscriber decline, MultiChoice reported ZAR 40.2 billion in subscription revenue, a slight decrease from ZAR 40.6 billion in the previous year. South Africa contributed ZAR 25.7 billion, while the Rest of Africa brought in ZAR 13.8 billion.

Although the Rest of Africa segment achieved organic revenue growth of 27%, currency depreciation and economic volatility eroded actual earnings.

In South Africa, an average price increase of 5.7% was implemented in April 2024, putting further strain on affordability amid growing competition from more affordable streaming options.

Meanwhile, MultiChoice’s streaming service, Showmax, experienced slower subscriber growth due to a content reshuffle and the discontinuation of certain offerings ahead of its February 2024 relaunch. Showmax reported a 23% year-on-year decline in revenue growth.

The update coincided with progress in MultiChoice’s pending acquisition by French media giant Groupe Canal+. On Wednesday, South Africa’s Competition Commission recommended approval of the deal, subject to several public interest conditions.

These include commitments to job retention, empowerment of historically disadvantaged persons (HDPs), support for local content production, procurement from black-owned suppliers, and ongoing corporate social responsibility programmes.

Both parties agreed to a three-year moratorium on retrenchments. MultiChoice’s South African broadcasting assets, to be housed under a new entity called LicenceCo, will be majority-owned by HDPs and employees. Canal+ also pledged to retain MultiChoice’s headquarters in South Africa and maintain its listing on the Johannesburg Stock Exchange.

The Competition Commission estimates the value of these public interest undertakings at R26 billion over the next three years.