South Africa’s favourite (we don’t have a choice) multimedia giant, Multichoice, has reported a staggering R911 million loss for the six months ending September 2023. The company’s recent financial results show a subscriber haemorrhage thanks to, mainly, economic challenges in the country.
Not all’s lost, though. The company has implemented a few strategies to try and claw back subscribers in various ways.
It’s relaunching its on-demand streaming service Showmax, looking at offering solar power packages, and, most interestingly, featured in a PR stunt against piracy on Carte Blanche (of all places).
Multichoice by the numbers
In the six months leading up to September 2023, its revenue saw a marginal dip of 1%, sliding from R28.6 billion in HY22 to R28.3 billion. Its operating profits took a more substantial hit, plummeting to $4.8 billion from R6.2 billion.
The big one is the pre-tax profit, which dropped to R980 million from R2.3 billion – that’s a substantial 57% decrease. This ultimately resulted in an after-tax loss of R911 million, starkly contrasting the small profit of R55 million in HY22.
Despite grappling with a challenging economic environment marked by load shedding, cost of living pressures, and currency depreciation against the US dollar, Multichoice maintains that it executed well on its operational objectives. While the company faced profitability challenges, it’s actually focused on something called subscriber retention and cost-saving measures.
South Africans still ditching DStv
South African customers declined by 5% to 8.6 million, although premium customers grew by 5% – which is noteworthy considering it’s historically struggled to grow this segment.
Local subscriber losses were also impacted as it removed 311,000 non-revenue-generating customers. These were all part of a special load-shedding campaign the group ran.
“Although the Premium and Compact bases showed improved stability compared to the latter part of FY23, mass-market subscribers are proving less resilient and more reluctant to pay when uncertainty around the ability to consume pay-TV exists,” Multichoice said.
Solar, Showmax and… pirates?
In a recent interview, MultiChoice Group CEO Calvo Mawela said the company is considering bundling alternative energy solutions, including solar power, with its DStv offering.
“We believe this will go a long way in terms of addressing the need for people to be able to continue watching television, even during load-shedding,” Mawela said, according to ITWeb.
While it’s unclear exactly how DStv plans to provide backup power to its subscribers, we’re sure many South Africans would jump at the option. Depending on price, of course.
It also understands consumers prefer streaming services, which is probably why it’s increasingly focusing on its Showmax product. The group plans to relaunch Showmax in 2024 – you can read more about that here.
Then, our favourite of all of its strategies – Multichoice recently featured on the hard-hitting investigative program Carte Blanche in the case against pirates. No, not those pirates, the ones that illegally download content.
The recently aired episode reveals the ‘infiltration of South African homes’ by international cybercrime syndicates using illicit and inexpensive TV boxes. Carte Blanche manages to expose the illicit activities of a reseller named Tawanda. According to the episode, the broader implication is that piracy attracts crime syndicates globally and robs content creators and the entertainment industry of essential revenue.
MultiChoice managed to piggyback off this episode and ‘raise awareness about piracy and its detrimental impact’.