Showmax increased revenue by 46% to R555 million over the last six months, but operating costs escalated even faster, resulting in a trading loss of R799 million.
MultiChoice revealed its Showmax numbers for the first time in its interim financial statements for the period ended 30 September 2023, released on Wednesday.
It followed the conclusion of the Showmax partnership with Comcast, which owns NBCUniversal, Sky and Peacock, on 4 April 2023.
This new Showmax group – Showmax Africa Holdings Limited – is 70% owned, and controlled, by MultiChoice and 30% by NBCUniversal.
The total price for the sale of 30% of the existing Showmax business was an amount of $29 million (R536 million).
MultiChoice plans to relaunch Showmax later in the financial year with an enhanced offering to subscribers.
The pay-TV operator is pinning much of its future growth on Showmax, especially with the pressure on its satellite TV business.
MultiChoice said it is working on transitioning Showmax to the Peacock platform and preparing to launch Showmax 2.0 in February 2024.
It is upbeat about the prospects of its streaming platform, which it said will benefit from rising connectivity and smart device uptake in Africa.
MultiChoice said ShowMax will enable it to double its customer base and deliver an additional $1 billion (R18 billion) in revenue in the medium term.
This is a very ambitious target, especially with stiff competition from global giants like Netflix, Amazon, and Disney.
Showmax did show strong subscriber growth. Its active subscriber base increased by 13% year-on-year, growing revenue by 46% to R555 million.
Despite the strong revenue growth, Showmax’s losses increased because of increased costs related to support for the existing business and investment in the new platform.
Trading losses widened by 186% from R279 million to R799 million – as shown in the table below.