{"id":645117,"date":"2026-05-04T18:03:06","date_gmt":"2026-05-04T16:03:06","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=645117"},"modified":"2026-05-04T18:05:55","modified_gmt":"2026-05-04T16:05:55","slug":"multichoices-multi-billion-rand-dstv-replacement-plan-collapsed-in-front-of-everyones-eyes","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/broadcasting\/645117-multichoices-multi-billion-rand-dstv-replacement-plan-collapsed-in-front-of-everyones-eyes.html","title":{"rendered":"MultiChoice’s multi-billion-rand DStv-replacement plan collapsed in front of everyone’s eyes"},"content":{"rendered":"\n

MultiChoice\u2019s plan to grow Showmax into an African streaming powerhouse and compensate for declining DStv numbers was a multi-billion-rand blunder.<\/p>\n\n\n\n

For two decades after DStv launched in 1995, the service showed exceptional growth, assisted by the decline of the SABC and its pay-TV monopoly.<\/p>\n\n\n\n

It was essentially the only game in town if you wanted quality movies and TV series along with the best in live sports.<\/p>\n\n\n\n

Year after year, DStv prices increased, and year after year, DStv\u2019s subscribers grew. MultiChoice had a winner, and it printed money.<\/p>\n\n\n\n

However, the entertainment landscape in South Africa changed in January 2016 when Netflix officially launched in the country.<\/p>\n\n\n\n

People gained access to the latest movies and TV series at a fraction of the price of a DStv subscription.<\/p>\n\n\n\n

To ensure smooth streaming, Netflix partnered with the NAPAfrica Internet exchange in Johannesburg, enabling local ISPs to peer directly with Netflix.<\/p>\n\n\n\n

The impact was immediate<\/a>. MultiChoice began losing DStv Premium subscribers with uncapped broadband access. Netflix proved a more attractive option.<\/p>\n\n\n\n

The broadcaster attempted to offset these losses by aggressively growing its more mass-market Compact and Access tiers.<\/p>\n\n\n\n

However, with the rapid growth of uncapped fibre and 5G access in South Africa, customers on more affordable DStv packages began cutting the cord.<\/p>\n\n\n\n

Despite rapid subscriber losses, MultiChoice continued to raise DStv subscription prices each year. The result was predictable.<\/p>\n\n\n\n

MultiChoice\u2019s DStv subscribers declined<\/a> from 17.3 million in March 2023 to 14.4 million by 31 December 2025. All DStv segments were going down.<\/p>\n\n\n\n

The core problem was straightforward. DStv faced increased competition from streaming services, which offered a superior value proposition.<\/p>\n\n\n\n

MultiChoice\u2019s misguided Showmax strategy<\/h2>\n\n\n\n
\"\"
Former MultiChoice CEO Calvo Mawela<\/figcaption><\/figure>\n\n\n\n

Instead of focusing all its energy on improving its DStv value proposition, MultiChoice went all-in on taking on Netflix.<\/p>\n\n\n\n

Former MultiChoice CEO Calvo Mawela said that they would grow their subscriber base to 50 million users in five years.<\/p>\n\n\n\n

Showmax was at the centre of this strategy. MultiChoice said it wanted to generate $1 billion, around R18.2 billion at the time, in revenue through Showmax.<\/p>\n\n\n\n

MultiChoice significantly ramped up its investment in the Showmax platform and local content to facilitate this growth.<\/p>\n\n\n\n

It promised investors that it would have a 3 to 5-year J-curve, similar to its global peers in the streaming industry.<\/p>\n\n\n\n

Former MultiChoice executive Yolisa Phahle said they had a trading profit breakeven target for the 2027 financial year.<\/p>\n\n\n\n

\u201cWe are targeting EBITDA margins of 25% and free cash flow margins of around 20% at scale,\u201d Phahle said.<\/p>\n\n\n\n

These plans sounded fantastic on paper. However, as many industry players predicted, they were unrealistic, and MultiChoice did not come close to reaching them.<\/p>\n\n\n\n

Instead of the exponential revenue growth needed to reach its $1 billion target, paying subscriber revenues declined in the 2025 financial year.<\/p>\n\n\n\n

What was even more painful for MultiChoice was that there was an 88% increase in trading losses in the last financial year.<\/p>\n\n\n\n

In the 2025 financial year, Showmax reported trading losses of R4.9 billion, up from R2.6 billion the previous year.<\/p>\n\n\n\n

In March 2026, Canal+, which acquired MultiChoice the previous year, announced it would shut down Showmax due to mounting losses.<\/p>\n\n\n\n

On Thursday, 30 April 2026, Showmax was shut down<\/a>, and its content was moved to the DStv Stream service.<\/p>\n\n\n\n

Groupe Canal+ chief executive Maxime Saada described Showmax as being an expensive commercial failure.<\/p>\n\n\n\n

\u201cAs you know, this was a severely loss-making activity on which we saw no recovery, no matter what was done,\u201d Saada said.<\/p>\n\n\n\n

Showmax was a misguided strategy by MultiChoice<\/h2>\n\n\n\n
\"\"<\/figure>\n\n\n\n

What stood out about MultiChoice\u2019s Showmax strategy<\/a> was that many predicted its failure, especially given that other streaming platforms struggled to turn a profit.<\/p>\n\n\n\n

Disney+, Warner Bros., Discovery, and HBO Max have faced multi-billion-dollar losses despite reaching significant scale.<\/p>\n\n\n\n

CNN+, in turn, was shut down just one month after launch due to a lack of market fit for a niche paid service.<\/p>\n\n\n\n

Another challenge was that Showmax faced big US competitors. Netflix, for example, will invest $20 billion (R334 billion) in films and TV series this year.<\/p>\n\n\n\n

Showmax counted its total annual investment in its platform in billions of rands, a drop in the ocean of what its competitors are spending.<\/p>\n\n\n\n

What was even more telling was that nearly every South African streaming service has failed, irrespective of who was behind it.<\/p>\n\n\n\n

MTN launched a streaming service, called FrontRow (later Vu), in December 2014. It shut down in May 2017 due to a lack of demand.<\/p>\n\n\n\n

Cell C launched its entertainment platform, Black, in November 2017, but pulled the plug on the service in November 2019.<\/p>\n\n\n\n

Vodacom launched its streaming service Video Play in August 2015. It discontinued the service in June 2022.<\/p>\n\n\n\n

Telkom launched TelkomONE in November 2020. It canned the project within two years and handed over its platform to the SABC.<\/p>\n\n\n\n

There were also many other failures, including the Altech Node, Times Media Group\u2019s Vidi, OnTapTV, and Econet\u2019s Kwes\u00e9 Play.<\/p>\n\n\n\n

Considering the tremendous global competition and graveyard of local services, it is difficult to understand why MultiChoice thought Showmax would be successful.<\/p>\n","protected":false},"excerpt":{"rendered":"

MultiChoice’s plan to grow Showmax into an African streaming powerhouse and compensate for declining DStv numbers was a multi-billion-rand blunder.<\/p>\n","protected":false},"author":23,"featured_media":640141,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[24196,21383,96407,475,6673,2054,32140],"class_list":["post-645117","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-broadcasting","tag-calvo-mawela","tag-canal","tag-disney-2","tag-multichoice","tag-napafrica","tag-netflix","tag-showmax"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/645117"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=645117"}],"version-history":[{"count":5,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/645117\/revisions"}],"predecessor-version":[{"id":645214,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/645117\/revisions\/645214"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/640141"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=645117"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=645117"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=645117"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}