MultiChoice told investors in May last year that its standalone Showmax streaming platform would generate $1 billion in net revenue<\/a> in five years.<\/p>\n\n\n\n It also targeted breakeven by the end of its 2027 financial year, with a 25% EBITDA margin and 20% free cash flow margins once Showmax reaches scale.<\/p>\n\n\n\n To generate roughly R17.5 billion in revenue, Showmax will need close to 15 million active subscribers who pay an average of R99 per month.<\/p>\n\n\n\n This is no easy task. Digital TV Research predicted that the total number of video streaming subscribers in Africa will only be 15.6 million users by 2028.<\/p>\n\n\n\n MultiChoice disagrees with this forecast. It said it expects video streaming uptake to undergo exponential growth in Africa.<\/p>\n\n\n\n According to MultiChoice, many broadcasting industry players see Africa as the final frontier for streaming growth.<\/p>\n\n\n\n MultiChoice is so optimistic that it is aiming to increase its total subscriber base, including Showmax and DStv subscribers, to 50 million users in 2028.<\/p>\n\n\n\n For Showmax alone, the company has indicated that it aims to have 25 million subscribers on the platform by 2028.<\/p>\n\n\n\n Although MultiChoice has elected not to release Showmax’s subscriber numbers<\/a> after Netflix announced it would stop reporting its figures in the first quarter of 2025, it is estimated to be between 700,000 and 1 million.<\/p>\n\n\n\n Based on that estimate and its stated goals, Showmax would need to grow its subscriber base by an average of around 100% a year until 2028.<\/p>\n\n\n\n Looking at Showax’s revenue for 2023\/24 yields a similar result.<\/p>\n\n\n\n It hit R1 billion in revenue in its previous financial year. Showmax would have to double its revenue every year for the next four years to hit R16 billion.<\/p>\n\n\n\n In other words, MultiChoice is banking on an African economic miracle that will cause an explosion in subscription video on demand adoption over the next four years.<\/p>\n\n\n\n It also hopes to position Showmax as the leading streaming platform in Africa to capitalise on that boom \u2014 taking on major players like Netflix, Amazon, and Disney.<\/p>\n\n\n\n It will do this by focusing on local content acquisition and production, combined with a selection of premium international content and popular sports.<\/p>\n\n\n\n Showmax recently launched a mobile-only Premier League football product, leveraging MultiChoice’s expertise in live sports broadcasting to bolster its subscription streaming service.<\/p>\n\n\n\n MultiChoice’s ambitious goals for Showmax came after it entered into a deal with Comcast subsidiary NBCUniversal Media (NBCU) and Sky in April 2023.<\/p>\n\n\n\n NBCU acquired a 30% stake in Showmax and supported it by licensing content from its Peacock, NBCUniversal, Universal Pictures, and Sky platforms.<\/p>\n\n\n\n Showmax also migrated away from its own technology platform and adopted Peacock’s, launching “Showmax 2.0” earlier this year<\/a>.<\/p>\n\n\n\n By 31 March 2024, NBCU and MultiChoice had provided just over $120 million (R2.1 billion) in equity funding to Showmax.<\/p>\n\n\n\n In September, MultiChoice and Comcast announced they had provided another $164 million (R2.8 billion) in funding to Showmax since 1 April 2024.<\/p>\n\n\n\n Should its big bet on Showmax fail, that doesn’t necessarily mean the end of MultiChoice and DStv.<\/p>\n\n\n\n It won’t be the money printer it once was and may be forced to become a much leaner company, but it is unlikely to disappear overnight.<\/p>\n\n\n\n SuperSport remains the jewel in its crown and could continue to exist in some form, and MultiChoice could find a future as an aggregator of all the disparate streaming services.<\/p>\n\n\n\n There is also the pending matter of French media giant Groupe Canal+’s offer to buy MultiChoice<\/a> at R125 per share.<\/p>\n\n\n\n![\"\"](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2024\/01\/Showmax-banners-in-MultiChoice-City.jpg\")