2 weeks Ago
MultiChoice has pinned all its hopes on its video streaming platform, Showmax, for its future growth and sustainability. The pay-TV operator's financial results for the year ended 31 March 2024 revealed that the company was in a dire situation. It had recorded a R4.
1 billion loss, suffered a 9% decline in active subscribers, and became technically insolvent. The only area where DStv wasn't bleeding subscribers was the Rest of Africa mid-market segment. However, the declines in its premium and mass-market customers wiped out any gains, resulting in an overall 13% subscriber decline in the Rest of Africa.
Active DStv subscribers in South Africa declined from 8.0 million to 7.6 million over the last year.
Although South Africa only accounted for 48.5% of MultiChoice's active subscribers, it accounted for 60% of group revenue. Therefore, South Africa is a core part of MultiChoice's operations and vital to ensure its financial sustainability.
However, the company is struggling to retain its subscribers, and South Africans are dumping DStv by the thousands. While it has offered streaming-only DStv packages since December 2020, these have not stemmed the tide of customers cancelling their subscriptions. MultiChoice told investors in May last year that its standalone Showmax streaming platform would generate $1 billion in net revenue in five years.
It also targeted breakeven by the end of its 2027 financial year, with a 25% EBITDA margin and 20% free cash flow margins once Showmax reaches scale. To generate roughly R17.5 billion in revenue, Showmax will need close to 15 million active subscribers who pay an average of R99 per.
.. Jan Vermeulen.
