The deal valued MultiChoice at around R47 billion<\/strong><\/a>, and the French media giant would\u2019ve had to pay over R30 billion cash to buy the 64.99% of the company it does not yet own.<\/p>\n Further explaining their position, Chiume said that just five years ago, MultiChoice had substantial competitive advantages over rivals \u2014 metaphorical moats protecting its business.<\/p>\n The strongest moat was the quality of its content, including a leading local offering and sports broadcasting rights.<\/p>\n However, it is starting to lose these advantages.<\/p>\n \u201cDStv, MultiChoice\u2019s direct broadcast satellite television service that operates in 54 countries across sub-Saharan Africa, enjoys a majority market share mainly due to its sports broadcasting rights,\u201d stated Chiume.<\/p>\n \u201c[These] are key for subscriber retention.\u201d<\/p>\n He predicted other players would likely start giving MultiChoice a run for its money in this arena.<\/p>\n \u201cA case in point is the recent drama around the rights to the Africa Cup of Nations football tournament, which MultiChoice has broadcast since 1992,\u201d noted Chiume.<\/p>\n \u201cIn January, the group declared its SuperSport pay-TV service had secured the broadcast rights to the event \u2014 a week after it had announced it would not be airing it this year after failing to secure a sublicensing agreement.\u201d<\/p>\n DStv dishes at an apartment block. Photo by: Mary Doggett \/ Shutterstock.com<\/p><\/div>\n Other competitive advantages once held by MultiChoice have started to unravel more aggressively.<\/p>\n \u201cFor example, with data costs having substantially declined over the past decade, the cost of switching to competitor products is now far lower,\u201d said Chiume.<\/p>\n \u201cAnd the rival offerings are alluring \u2014 affordable mobile-only plans from Netflix and others have made it much more difficult for MultiChoice to retain subscribers.\u201d<\/p>\n Moreover, MultiChoice appears to be allowing sole distributor agreements to lapse.<\/p>\n \u201cFor instance, HBO is no longer granting exclusivity to MultiChoice and is now also using Netflix to distribute its popular shows,\u201d Chiume said.<\/p>\n He also said that international players like Netflix, Disney+, and Amazon Prime Video are competing aggressively on price in South Africa while offering a wide range of content.<\/p>\n \u201cThey have also been catching up in the creation of local content, which has in the past differentiated MultiChoice from these players,\u201d he said.<\/p>\n Chiume acknowledged that DStv still offers excellent local content and that MultiChoice has its Showmax streaming service, which should help it defend its market share.<\/p>\n \u201cHowever, the price that MultiChoice can charge is limited by the competition,\u201d he said.<\/p>\n \u201cPut differently, if there is a mass migration from DStv to Showmax, this will likely come at lower margins than MultiChoice is used to.\u201d<\/p>\n Chiume also noted that pay TV and video streaming are not mutually exclusive.<\/p>\n \u201cThe two mediums could conceivably coexist over the long term,\u201d he said.<\/p>\n \u201cPay TV on the continent still has some runway, which is likely what has attracted the Canal+ offer.\u201d<\/p>\n He also said there were definite scale benefits to combining the MultiChoice subscriber base with that of French-speaking Africa\u2019s leading pay TV operator.<\/p>\n \u201cIn fact, Canal+ has been buying up shares<\/strong><\/a> in MultiChoice since 2020.\u201d<\/p>\n![\"\"](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2024\/01\/shutterstock_1026301258-2.jpg\")
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