DStv is not doing well (see video below) but MultiChoice continues to do well. What is happening here is a pure double play strategy: Multichoice has included many platforms into its distribution platform, making them compete against DStv which is affecting DStv position. But as that happens, MultiChoice is capturing value across many domains.
It is a great business playbook: we have DStv and it does provide us a decent pathway to invest in our distribution, and provided with DStv we can reduce your risks on these distribution investments, we will keep investing. As we do all that, other companies like Amazon Prime and Netflix will see us as the best pathway to reach new markets in Africa. Sure, DStv may struggle but MultiChoice will be great.
MultiChoice knows that DStv is the one oasis and it has used it to create a clear double play in Rest of Africa where it is doing well: Multichoice Group’s operations in the Rest of Africa (RoA), led by Nigeria, achieved its first trading profit in the financial year ending March 31, 2023. The group added 1.7 million 90-day active subscribers, an 8% year-on-year growth, to reach a total of 23.5 million subscribers. Multichoice Nigeria played a significant role in driving the company’s performance, accounting for 44% of the RoA subscription revenue and achieving a 29% growth in subscription revenue from 2022 to 2023.”
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“The strong performance in the Rest of Africa, which added 1.4m subscribers, was underpinned by the decoder subsidy and marketing investments for the FIFA World Cup, which will be fully paid back by the end of 1H FY24. This together with annual price increases resulted in the Rest of Africa delivering positive trading profit for the first time since the group was listed in 2019. This is an exceptional performance from the Rest of Africa team as it was achieved despite absorbing more than ZAR2.9 billion in currency losses in the last four financial years.
“In contrast, the South African consumer environment weakened sharply, especially in the second half of the financial year. Permanent high stages of load-shedding, interest rate hikes, and elevated inflation levels have left a large portion of the group’s customer base unable to watch or afford video entertainment services. Although SA 90-day subscribers grew by 0.3m YoY, lower levels of activity, represented by active days, were experienced which resulted in a 2% decline in SA revenue.”
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So, Multichoice in Nigeria is still adding numbers? I thought people have been complaining. Dangote is not in charge of this one, yet nobody has agreed to challenge Multichoice.
As always, we are only good at competing in crowded areas, low energy everywhere.