DStv and Showmax prepare for siege
MultiChoice is investing aggressively in its Showmax streaming platform to ensure that it is in the best possible position if technology giants like Amazon and Apple decide to give the African market their full attention.
“I don’t see Showmax just as a growth opportunity; it’s also an opportunity to build resilience,” MultiChoice board member Andrea Zappia recently told journalists.
Zappia is Sky’s CEO for new markets and businesses and was appointed to the MultiChoice board in August.
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.
A lot is riding on the partnership.
Outgoing Showmax CEO Yolisa Phahle said in a presentation to investors and shareholders that Showmax would make R18 billion in net revenue in 5 years.
MultiChoice sees Showmax as the engine for its future growth as subscriptions to its traditional DStv pay-TV service decline in South Africa.
While the lack of widespread, fast, affordable broadband in the rest of Africa has allowed DStv to continue growing outside South Africa, the writing is on the wall.
Asked about how concerned they are about the likes of Netflix, Amazon, and Apple, Zappia said waking up every morning concerned that someone can be better than you is healthy for a business.
“There is always someone bigger than you,” said Zappia.
He said the launch of “Showmax 2.0” is precisely to ensure it is stronger, and that MultiChoice can maximise the monetisation of whatever content it licences.
This will also ensure that MultiChoice remains in a strong negotiating position when it comes to sports rights.
That way, if Amazon, Apple, or anyone else throws their hat in the ring for the broadcasting rights of particular tournaments or sports leagues, MultiChoice can offer a competitive live-streaming product.
This will allow MultiChoice to defend its crown jewel — SuperSport.
In South Africa, SuperSport offers sports lovers a one-stop-shop for all premium sports, from English Premier League football to boxing.
Elsewhere in the world, fans often have to subscribe to multiple services to access everything. Matches within the same league are even sometimes spread across multiple broadcasters.
In boxing, high-profile bouts are often sold on a pay-per-view basis, with tickets selling for $100 (R1,900) or more.
“SuperSport is in a unique position, globally,” Zappia said.
Another advantage MultiChoice has that is not to be underestimated is its ability to accept payments across the continent through a variety of mechanisms — those with payment cards remain in the minority.
Zappia also believes they have some time to strengthen their position as there are more lucrative markets for the world’s biggest tech players to focus on.
“They’re rarely irrational,” he said. “They’re very well-run businesses.”
However, there is evidence that Amazon has already started turning its attention towards Africa.
In addition to announcing the imminent launch of the Amazon.co.za seller marketplace, it has headhunted former MultiChoice executive and SuperSport CEO Gideon Khobane to serve as director of Prime Video Africa.
Amazon has said Khobane will work closely with the Prime Video Africa Originals team headed by Ned Mitchell, the content acquisitions team led by Ayanna Lonian, and the product teams responsible for launching customer features.
MultiChoice has said it will unveil Showmax 2.0 before 31 March 2024.
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