MultiChoice Reports Subscriber Dip Amid Economic Pressures
…Economic Challenges Drive MultiChoice Subscriber Decline
The MultiChoice Group’s interim financial results for April to September 2024 reveal a loss of 243,000 subscribers across its DStv and GOtv platforms in Nigeria, reflecting the tough economic realities facing the nation.
Nigeria, one of MultiChoice’s most significant markets, is grappling with inflation rates exceeding 30% and a depreciating naira, which has eroded consumer purchasing power. This environment has led to reduced spending on non-essential items like pay television, as confirmed by the Central Bank of Nigeria’s Household Expectations Survey.
“The Buying Condition Index for high-ticket items suggests that most respondents believe the current period is unfavourable for such purchases, and the next three to six months may remain challenging,” the survey noted.
In addition to declining subscribers, MultiChoice disclosed $21 million trapped in the distressed Heritage Bank, whose license was revoked by the Central Bank of Nigeria. The company also reported a 2.1 billion Rand loss from a dollar-denominated intergroup loan due to the naira’s devaluation.
Despite these challenges, MultiChoice CEO Calvo Mawela highlighted the company’s strategic efforts to adapt to economic conditions and industry changes. “We are proactive in our focus to right-size the business for the current economic realities and industry changes. Key milestones include our investment in KingMakers and expansion into insurance and financial services through our partnership with Sanlam,” he said.
Showmax, MultiChoice’s subscription video-on-demand platform, recorded a 50% year-on-year growth and a 30% increase in paying subscribers, reflecting the company’s efforts to diversify. Showmax’s adoption was boosted by partnerships with major distributors like Kenya’s M-PESA and South Africa’s Capitec.
Additionally, MultiChoice’s fintech venture, Moment, is processing nearly 30% of the company’s payments across 40 African countries, achieving payment volumes of $242 million. The gaming division, BetKing Nigeria, reported a 10% overall revenue increase despite a 48% revenue decrease in the industry.
The financial results underscore the impact of Nigeria’s economic challenges on consumer behaviour and businesses. Analysts urge caution against attributing subscriber losses solely to competition from streaming services like Netflix and Prime, noting that MultiChoice has actively diversified its offerings.
As Mawela concluded, “Our diversification and proactive strategies are positioning MultiChoice for sustainable growth despite economic headwinds.”
