MultiChoice’s secret Showmax numbers
MultiChoice will report its Showmax subscriber numbers after it migrates to NBCUniversal’s Peacock platform, group CFO Tim Jacobs has told MyBroadband.
In March, MultiChoice announced an agreement with Comcast’s NBCUniversal and Sky to sell a 30% stake in Showmax.
Showmax will switch to using Peacock’s technology as part of the deal. Peacock is NBCUniversal’s video streaming service.
Jacobs explained that the conversion ratios when migrating from one platform to another have historically been quite wide — between 50% and 80%.
Stated differently, a streaming service can lose between 20% and 50% of its subscribers when switching platforms like Showmax plans to do.
“Then you’ve got to win the clients back,” Jacobs stated.
MultiChoice doesn’t want to announce Showmax subscriber numbers only to see a sharp drop a few months later, followed by the exponential increase they expect to report.
“What we don’t want to do is create noise in the marketplace,” Jacobs said.
MultiChoice currently only reports relative figures for Showmax.
In its latest annual results, for example, it said Showmax saw its overall online user base increase by 12% since last year while paying Showmax subscribers grew 26%.
Once Showmax is on the new Peacock-powered platform and has a stable customer base, MultiChoice will report its actual subscriber numbers.
“Then everyone can measure our performance against that as we go forward,” stated Jacobs.
With a revamped Showmax service in the market, Jacobs said they believe they are poised for exponential growth.
Showmax and MultiChoice Connected Video CEO Yolisa Phahle said in a recent presentation to investors and shareholders that Showmax would make R18 billion in net revenue in 5 years.
Jacobs said two key drivers are necessary for adoption: connectivity and data prices of below $1 (R18) per gigabyte.
“We did quite a lot of studies with Sky counterparts in emerging markets, and it looks like $1 per gig is the inflexion point,” said Jacobs.
While markets like South Africa don’t fully meet these requirements for mass adoption, Jacobs said with the level of competition already in the video-on-demand space, you can’t wait for the perfect market conditions.
The launch of “Showmax 2.0” is currently set for the second half of MultiChoice’s financial year — between October 2023 and March 2024.
Jacobs said the team is working full steam on customising Peacock for the African countries where MultiChoice operates.
“When you move onto an international platform, you need to make sure that it’s customised for the local environment,” he said.
“We need to be able to take payments, it needs to support a lot more lower-end devices than you would typically in a first-world market, and importantly you have to make sure that it doesn’t use a lot of data.”
Jacobs said they want to ensure features like allowing users to set their streaming quality is available to enable them to control their mobile data usage.
He also promised that the revamped Showmax would be very different.
“This is not going to look like the typical Showmax you see today. This is going to have enhanced content.”
Jacobs said that enhanced content includes a slate of Showmax Originals that MultiChoice has developed for the launch of the new platform.
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