MultiChoice’s streaming platform, Showmax, has reported a significant increase in revenue, reaching R555 million over the last six months. However, the company also experienced a surge in operating costs, resulting in a trading loss of R799 million.
These figures were revealed in MultiChoice’s interim financial statements for the period ending on September 30, 2023, which were released on Wednesday.
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This is the first time that MultiChoice has disclosed the financial performance of Showmax in its official statements. The disclosure followed the conclusion of Showmax’s partnership with Comcast, the owner of NBCUniversal, Sky, and Peacock, on April 4, 2023.
Under the new arrangement, Showmax Africa Holdings Limited is now 70% owned and controlled by MultiChoice, with the remaining 30% owned by NBCUniversal. The transaction for the sale of 30% of Showmax’s existing business amounted to $29 million (R536 million).
MultiChoice has plans to relaunch Showmax later in the financial year, offering enhanced services to subscribers. The company is heavily relying on Showmax for future growth, particularly as it faces increasing pressure on its satellite TV business.
MultiChoice aims to transition Showmax to the Peacock platform and introduce Showmax 2.0 in February 2024. The company is optimistic about the prospects of its streaming platform, expecting it to benefit from the growing connectivity and smart device usage in Africa.
MultiChoice believes that Showmax will enable them to double their customer base and generate an additional $1 billion (R18 billion) in revenue in the medium term. However, this target is ambitious, given the fierce competition from global streaming giants such as Netflix, Amazon, and Disney.
Showmax did experience strong subscriber growth, with its active subscriber base increasing by 13% year-on-year. This growth contributed to the 46% increase in revenue, reaching R555 million.
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However, despite the positive revenue growth, Showmax incurred higher losses due to increased costs associated with supporting the existing business and investing in the new platform. Trading losses widened by 186% from R279 million to R799 million, as indicated in the table below.
| Financial Period | Trading Loss (R million) |
|---|---|
| Previous Year | R279 |
| Current Year | R799 |
Despite the challenges, MultiChoice remains committed to the growth and success of Showmax. With the upcoming relaunch and the integration with the Peacock platform, the company believes it can overcome the competition and capitalize on the increasing demand for streaming services in Africa.
Overall, Showmax’s revenue growth is a positive sign for MultiChoice, but the company needs to address the escalating operating costs to ensure profitability. The success of Showmax will play a crucial role in MultiChoice’s future as it seeks to navigate the evolving landscape of the entertainment industry.
