MultiChoice chief executive Calvo Mawela spoke to the Mail & Guardian about the company’s future as it prepares to take on US streaming giants. (Photo by Sydney Seshibedi/Gallo Images/Getty Images)
Pay-TV operator MultiChoice has been dealt a bad hand in recent months as it faces economic pressures, inflation and Canal+’s takeover bid amid market uncertainty. Its subscriber base declined from 1.8 million to 14.9 million users during the six months ended 30 September 2024 because of macroeconomic conditions that negatively affected discretionary consumer spend, and it also faces pressure from giants like as Netflix. MultiChoice chief executive Calvo Mawela spoke to the Mail & Guardian about the company’s future as it prepares to take on US streaming giants.
What were the main challenges faced by MultiChoice in the recent reporting period?
We have navigated numerous headwinds including severe currency depreciation, which has reduced our trading profit by close to R7 billion in the last 18 months. We also continue to see a strained consumer environment with inflation at elevated levels across many markets.
In Nigeria, inflation soared above 30%, and in Zambia drought-driven power outages lasted up to 23 hours a day. These factors significantly impacted our interim financial performance and affected customer growth.
What were the effects of foreign exchange on MultiChoice’s financial performance, especially the devaluations in the rest of Africa?
Abnormal currency depreciation in the rest of Africa has been a real challenge since the start of FY24. We generate revenues in local currency across most of our markets, while a significant portion of our cost base is fixed and denominated in hard currency.
This requires a tough balancing act, but we’re navigating it with tight cost controls and a relentless focus on operational efficiency.
Our ongoing cost optimisation efforts with other improvements in the business delivered R1.3 billion in savings, contributing to a 32% increase in trading profit before incorporating the Showmax costs. The R1.6 billion step-up in our Showmax investment trimmed the organic trading profit to R5 billion, a modest 1% year-on-year decline, with a R2.3 billion FX loss reducing it to R2.7 billion on a reported basis.
Is the deal with Canal+ strategic for MultiChoice?
Absolutely. They bring scale, expertise and a shared vision for delivering unmatched entertainment in Africa. Together, we will be better positioned to deal with global competition while keeping African audiences at the centre.
Is MultiChoice confident that the deal with Canal+ will help it better compete for content against giants such as Netflix?
Without a doubt. Canal+ is a game-changer for us in enabling us to compete against large, well-funded international players, especially in content and co-productions. They understand the power of localised storytelling, just like we do. Together, we can create content that global players can’t replicate — African, authentic, and loved by our audiences.
What role would Canal+ play in MultiChoice’s business ecosystem, particularly in content and technology sharing?
Canal+ is more than a partner — they’re an accelerator. They’ll help us co-produce premium content, share tech expertise and unlock new efficiencies. Think of it as combining the best of both worlds to deliver even more value to our customers, so that we can compete against massive international players.
What challenges does Canal+ face in the African market compared to MultiChoice, and will these not hamper the latter’s progress on the continent?
Like any partner, Canal+ has strengths and challenges. The challenges include language barriers, brand strength, and market familiarity — but that’s where we shine. MultiChoice knows Africa inside out, and together, we’ll play to each other’s strengths to grow the market.
With traditional pay-TV facing challenges, where does MultiChoice see its future growth?
The key is staying agile and customer-focused. The future is clear: streaming, local content and tech innovation. Showmax is a significant part of our growth story — besides general entertainment, we added the English Premier League and the current local Premier Soccer League football leagues to our offering. We’re also growing new revenue streams like insurance, internet and gaming.
How much did MultiChoice invest in Showmax during the interim period? Why was this investment necessary?
Streaming is the future of video entertainment. Through Showmax, we have positioned ourselves to participate in this strategic shift and the future growth of online video on the continent. To create sufficient capacity and drive growth, we increased our investment in Showmax by an additional R1.6 billion during the interim period. This investment ensures Showmax is not just competitive — it’s a leader in African stories and innovation, driving new subscriptions and delighting customers.
How does MultiChoice plan on winning back its lost subscribers?
Winning back subscribers means showing them they’re valued. The decline in the linear subscriber base is a common challenge across the global pay-TV industry and is mainly driven by competition from streaming services and the growing influence of social media. In our case, this trend is further compounded by macroeconomic and consumer pressures.
We have some exciting festive offers coming up and are focused on delivering richer content and a better customer experience. We’re also targeting bringing back lapsed subscribers and keeping them happy.
Is it fair to say that sports packages are keeping MultiChoice’s head above water?
Sports are undeniably a cornerstone of our success. Our rights to premium leagues like the EPL drive loyalty and engagement. But let’s not forget — our strategy is broader than sports.
Our general entertainment offerings, especially local shows, continue to be very popular. That is why we continue to invest in local content and have produced 2,763 hours in the past six months, expanding our local content library to over 86,000 hours. Streaming, local stories, and customer innovation are just as important in keeping us ahead.