MultiChoice video streaming platform Showmax has received equity funding of $164 million (R2.8 billion), as it looks to take on international video-on-demand platforms such as Netflix and Disney+.
This, after in March last year, MultiChoice entered into an agreement with Comcast subsidiary NBCUniversal and Sky, to form a partnership for purposes of driving Showmax to become the “leading streaming service in Africa”.
Comcast, through its subsidiary NBCUniversal, acquired a 30% equity stake in Showmax, and provides ongoing support through the licensing of its Peacock platform and content from NBCUniversal, Universal Pictures, Peacock and Sky.
MultiChoice, through its wholly-owned subsidiary MultiChoice Group Holdings, and Comcast, through NBCUniversal, are providing funding to Showmax (only as and when Showmax’s board determines) during its investment phase.
According to MultiChoice, this is contributed in proportion to the companies’ respective shareholdings and they will share profits on the same basis in future.
It adds that equity funding is provided as required (either monthly or at other intervals) depending on Showmax’s working capital requirements and near-term budget (as determined by Showmax’s board) subject to a maximum capped amount.
As at 31 March 2024, MultiChoice Group and NBCUniversal provided, in the aggregate, $120 million (R2 billion) in equity funding to Showmax, each in proportion of their respective shareholdings.
“Since 1 April 2024 until the date of this announcement, MultiChoice Group and NBCUniversal provided, in the aggregate, $164 million (R2.8 billion) in equity funding to Showmax, each in proportion of their respective shareholdings,” says the JSE-listed video entertainment company.
Faced with declining subscriber numbers in the traditional pay-TV space, MultiChoice is pinning its hopes on streaming platforms Showmax and DStv Stream.
The company’s latest financial results show overall active subscribers declined by 9%.
According to the company, this was mainly due to a 13% decline in the “rest of Africa” business, with Nigeria, Angola and Zambia most affected, while the South African business was more resilient, declining by only 5%.
The results come as French-based media giant Canal+ is looking to take over the South African firm in a R30 billion deal.
Over the years, MultiChoice’s subscriber numbers have reduced amid pressure from global streaming services such as Netflix, Disney+ and Amazon Prime.
To boost its streaming offerings, MultiChoice relaunched Showmax, stating its intention of becoming the leading platform in Africa.
However, research projections show the new Showmax will become Africa’s second-biggest video streaming service in five years.
According to a report by Digital TV Research, Sub-Saharan Africa will have 16 million paying subscription video-on-demand (SVOD) subscriptions by 2029, up from seven million at the end of 2023.
It notes Netflix will remain the SVOD market leader, with 6.9 million subscribers by 2029, and Showmax will be the second-largest platform, with 3.7 million paying subscribers.
MultiChoice recently enhanced its DStv Stream app by adding personalisation features, which it believes will draw more viewers to the platform.
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