MultiChoice, the powerhouse of South African pay-TV, has weathered a tempestuous fiscal year with staggering losses totaling R4 billion, amidst revenues of R56 billion. The turbulence was driven by harsh macroeconomic headwinds, leaving shareholders pondering whether a Canal+ takeover could offer sanctuary.
The landscape across markets like Nigeria and Ghana was marred by currency devaluation and inflation, sapping consumer purchasing power and precipitating a decline in active subscribers. In Nigeria alone, the subscriber base dwindled by 1.2 million to 8.1 million, significantly reducing its revenue share in the broader African market from 44% to 35%.
“Basic necessities took precedence over entertainment for mass-market consumers in places like Nigeria,” lamented MultiChoice in its executive summary, reflecting on the economic realities that shaped their year.
For the Rest of Africa segment, encompassing all markets beyond South Africa, fiscal year 2024 posed the most formidable economic challenges since 2016, as asserted by the company.
Meanwhile, MultiChoice’s South African stronghold, despite a more resilient performance with a mere 5% dip in active subscribers totaling 7.6 million, faced its own pressures. Persistent power outages, known as loadshedding, deterred potential subscribers reliant on consistent electricity for TV viewing.
The decline in premium customers, encompassing the Premium and Compact Plus packages, was marked at 8%, while the mass-market tier saw a 2% decrease across all markets, underscoring broader challenges in consumer retention.
Despite stringent cost-cutting measures amounting to R1.9 billion in savings, including reduced decoder subsidies, MultiChoice couldn’t evade the harsh market realities. FX market volatility, particularly in Nigeria, inflicted significant remittance losses amounting to $59 million for the year, a stark contrast from the $132 million recorded in FY 2023.
These fiscal results, delivered against a backdrop of economic turmoil and strategic austerity, are unlikely to enthuse investors, compelling a reevaluation of MultiChoice’s operational strategies and market presence moving forward.