The chaos and uncertainty at MultiChoice has heightened after word that the entertainment giant will soon shut down its Showmax on-demand video streaming service as part of the group’s effort to rein in costs and cut loss-making units.
MultiChoice has already sunk more than R3bn into Showmax project.
The future of Showmax — first launched in 2015 — had been in question since French broadcaster Canal+ took over Africa’s largest paid TV provider in September. The group says it can no longer carry the heavy investment associated with Showmax.
“This decision was made by the Showmax board of directors and reflects the continued focus of MultiChoice on financial discipline and investment optimisation, in an increasingly competitive and capital-intensive global streaming environment,” the company said in a statement on Thursday.
“The substantial annual losses experienced by the Showmax business have proved unsustainable. The decision to phase out Showmax reflects our focus on building a sustainable, competitive business for the long term in an increasingly demanding global streaming environment.”
The group has also assured that the move will not result in job losses.
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Since taking control of MultiChoice, Canal+ has been working on how it will consolidate its video-on-demand services to effectively compete with deep-pocketed international players like Netflix, Disney and Amazon.
The group has indicated that it is looking to create a one-stop super app that brings its various video streaming services onto one platform.
The group again emphasised this point, saying that “this evolution is also consistent with the ambition of MultiChoice … to deploy its in-house large-scale streaming platform capable of meeting the expectations of African and international consumers”.
A new updated version of Showmax, underpinned by technology from US giant NBCUniversal, began operating in February 2024. The R3bn project had helped the group to defend Showmax’s place as the largest streaming platform in Africa, ahead of international rivals.
In April, MultiChoice said that since September 27 2024 it and NBC had provided $145m (R2.6bn) in equity funding to Showmax in proportion to their shareholdings. In addition, MultiChoice provided another $800,000 as equity funding to cover its specific shareholder costs. This adds to the $164m spent by the DStv operator and NBC between April and September 2024.
A new Showmax group was created in 2023. It is 70% owned by MultiChoice and 30% by Comcast-owned NBCUniversal, and powered by its Peacock technology. Expenses for the business and future profits are shared in the same ratio
