MultiChoice’s plan to beat Netflix in Africa

MultiChoice is hedging its bets on its new Showmax to compete against the likes of Netflix, Disney+ and Amazon Prime Video to become the leading streaming service in Africa.

DStv-owner MultiChoice is set to launch Showmax 2.0 – a revamped version of its streaming service – on 12 February 2024.

This new product results from a partnership between MultiChoice, Sky, and NBCUniversal’s Peacock, which powers the platform.

Aside from a new platform, MultiChoice now offers four products at lower price points than the original Showmax offering, which has cost R99 per month since its launch in 2015.

The new Showmax is MultiChoice’s answer to the increasing competition in the African streaming space.

The company hopes to take on international streaming giants like Netflix, Hulu, Disney+ and Amazon Prime Video in Africa and become the leading streaming service in that market.

To achieve this, MultiChoice partnered with Comcast’s NBCUniversal and Sky. As part of the partnership, Showmax’s ownership will change. NBCUniversal will own 30%, and MultiChoice will own 70%.

MultiChoice South Africa CEO Marc Jury said this deal is the “coming together of two giants”.

Peacock will provide its international, third-party content and leading streaming technology, while MultiChoice offers its local content and African customer base.

MultiChoice believes its knowledge of and experience with the African market gives it a competitive advantage over international streaming services. 

For example, three of the four new products offered as part of the new Showmax are mobile-only plans.

This is because Africa, unlike many other markets, is increasingly drawn to and has access to mobile streaming.

In addition, it allows MultiChoice to offer these products at a lower price range, more in line with what its markets can afford.

“The future of video entertainment is mobile devices,” said MultiChoice South Africa CEO Marc Jury.

Another strategy the new Showmax employs is offering a product exclusively dedicated to the Premier League – one of Africa’s most loved sports leagues.

By offering a Premier League mobile-only product, MultiChoice intends to attract customers who would not otherwise be interested in or able to afford its general entertainment and multi-device products.

MultiChoice has also invested heavily in exclusive local content to attract the African market to content tailored to them.

Showmax COO Joe Heshu said 21 Showmax originals will be released in February when the new platform is launched, and around 3,100 hours of “fresh content” will be released this year.

Aside from lower prices than other streaming services – the new Showmax offers products ranging from R39 to R99 – MultiChoice also offers different payment methods to suit its target market.

These methods include credit and debit cards, mobile direct carrier billing, digital and retail vouchers, mobile money, DStv add to bill, USSD, and Baxi.

In short, MultiChoice’s strategy for its new Showmax centres on making a platform that is “accessible, affordable and effortless”.

It also hopes to rely on the company’s extensive experience in the African market to guide this new strategy.

However, it should be noted that MultiChoice has invested millions into its streaming platform, and the company’s latest financials revealed that Showmax was running at a significant loss.

In its interim financial statements for the period ended 30 September 2023, 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.

Therefore, MultiChoice is making a very expensive bet on Showmax 2.0 to not only take on international streaming giants like Netflix but also to recoup the millions it has invested in the platform thus far.