Sounds like the pay TV bubble is finally popping. MultiChoice Group just had a brutal year, calling it a perfect storm of bad economic conditions across Africa. Their latest annual report shows a major subscriber bleed. The total active customer count dropped from fifteen point seven million down to fourteen point five million. South Africa alone lost eight percent of its subscriber households, falling to seven million. High unemployment and squeezed incomes are killing discretionary spending.
The Rest of Africa segment did not fare better, declining seven percent to seven point five million subscribers. Rampant inflation in countries like Nigeria, Angola, Ghana, and Malawi forced people to cut entertainment first. Constant power cuts also drove churn, with Zambia suffering over twenty hours of daily outages.
The financial damage is severe. Group revenue fell sharply. Currency crashes, especially the Nigerian naira, hammered reported numbers even where some organic growth existed. Trading profit was almost halved. The company swung to a core headline loss, flipping from a profit the prior year. Their debt leverage ratio climbed, pointing to real solvency pressure. They managed to cut over three and a half billion in costs to offset some foreign exchange losses.
Their response is a frantic pivot to streaming and a possible sale. The Showmax platform saw paying subscribers grow by forty-four percent, yet still missed internal goals. A potential lifeline comes from Canal Plus, which made a mandatory offer to buy the remaining shares. The MultiChoice board supports this deal, viewing it as crucial for future sustainability. The deadline for that acquisition has been pushed to early October this year.
The company is now stuck trying to manage costs, stop the subscriber bleed, and transform its business all at once. The entire situation underscores the intense pressure on traditional pay TV models in Africa's tough macroeconomic climate. Their future hinges on streaming adoption and whether that takeover deal actually closes.
The Rest of Africa segment did not fare better, declining seven percent to seven point five million subscribers. Rampant inflation in countries like Nigeria, Angola, Ghana, and Malawi forced people to cut entertainment first. Constant power cuts also drove churn, with Zambia suffering over twenty hours of daily outages.
The financial damage is severe. Group revenue fell sharply. Currency crashes, especially the Nigerian naira, hammered reported numbers even where some organic growth existed. Trading profit was almost halved. The company swung to a core headline loss, flipping from a profit the prior year. Their debt leverage ratio climbed, pointing to real solvency pressure. They managed to cut over three and a half billion in costs to offset some foreign exchange losses.
Their response is a frantic pivot to streaming and a possible sale. The Showmax platform saw paying subscribers grow by forty-four percent, yet still missed internal goals. A potential lifeline comes from Canal Plus, which made a mandatory offer to buy the remaining shares. The MultiChoice board supports this deal, viewing it as crucial for future sustainability. The deadline for that acquisition has been pushed to early October this year.
The company is now stuck trying to manage costs, stop the subscriber bleed, and transform its business all at once. The entire situation underscores the intense pressure on traditional pay TV models in Africa's tough macroeconomic climate. Their future hinges on streaming adoption and whether that takeover deal actually closes.
