MultiChoice appears to be doubling down on its efforts in online streaming, signing two deals in the past week to set up Africa’s largest pay TV operator to become the continent’s largest streamer or at least the biggest gatekeeper to paying audiences.
The DStv operator looks to be trying to recreate its DStv offering — but in streaming form. MultiChoice has signed agreements with Netflix, Amazon, ESPN, Disney, Sky and NBCUniversal as a way to bring all streaming content under one roof as opposed to consumers having to pay multiple subscriptions. Then it hopes to control the pipeline from there.
The question is whether the former Naspers company, whose largest shareholder is France's Canal+, is likely to succeed in creating such a unified platform.
The company took its investment up a notch, entering an agreement with media giants NBCUniversal from the US and the UK’s Sky, to create a new Showmax service.
A new Showmax group will be 70% owned by MultiChoice and 30% by Comcast-owned NBCUniversal, and powered by its Peacock technology.
The partnership provides the Comcast group with an opportunity to push the global reach of its content and streaming technology in one of the fastest-growing video markets globally. At the same time, MultiChoice gets more content, deeper pockets and technology to boost Showmax.
Accenture’s MD for communications, media and technology in Africa, Nitesh Singh, says the deal places MultiChoice in good stead for creating a unified platform. This is especially true in a world where consumers have more and more streaming options.
“Consumers are starting to have a plethora of subscriptions and this is putting the consumer at the centre of this strategy. Also as we have seen when they launched Disney+ it was a great deal for their current consumers who got the subscription at a great rate.”
When Disney’s streaming service launched in SA back in May 2022, it was made available to DStv subscribers via the Explora Ultra decoder on the same day.
Previously, studios would create content, which would be bought by broadcasters such as MultiChoice and then distributed to customers. Studios such as Disney and HBO are coming up with their own apps and going straight to consumers. Now MultiChoice, which dominates the continent’s pay-TV market with more than 20-million customers, faces even more competition from some of the most powerful Hollywood players.
DStv has already launched the Explora Ultra decoder, which has YouTube, YouTube Kids, Amazon Prime, Netflix, Showmax and DStv Now. MultiChoice refers to this as its “super aggregator strategy”.
The company is looking to do for online streaming what it has done for local broadcast television with DStv — aggregate content in one place.
The world’s largest tech company, Apple, has also tried this approach with its Apple TV service and app, aggregating shows and movies from a customer’s various streaming subscriptions in one place.
Data from streaming aggregator platform JustWatch shows that global giant Netflix has lost 13% market share since 2020, accounting for about 25% of the total by December 2022. This despite having viral shows such as Wednesday, Squid Games, and Stranger Things.
Ironically, Netflix’s decline is a big part of the reason MultiChoice finds itself at this juncture.
Before every major studio and broadcaster understood the opportunity in streaming, Netflix was the platform that offered the widest selection of content in one place. Seeing its success, film and television houses pulled their content from Netflix in favour of launching their own services. That has resulted in a crowded market, the likes of which MultiChoice — and a number of other players — is hoping to bring back into one.
MultiChoice’s new deal has raised questions about why it would sell a piece of Showmax as opposed to just having a normal distribution or content sharing agreement as it has done in the past.
Singh explained that the move helped to increase the stakes for parties.
“This is an exceptional deal and shows that MultiChoice is thinking outside the box, by changing the ownership structure they will acquire content from partners rather than suppliers — I would think at very beneficial rates,” he said.
The other crucial piece of the online streaming experience is connecting to the internet. Customers paying for streaming services need data connections, whether at home or on the go, that are fast, reliable and uncapped. This is an added cost.
MultiChoice is also going after that piece of the pie. Earlier in the week, the operator said it will offer a range of bundled and stand-alone fibre packages to customers who have Vumatel coverage in their area.
Given the rise of online video streaming and content consumption, MultiChoice — which previously owned MWeb — has had to revisit its internet service provider strategy and has been investing heavily in the space to retain customers.
Having launched its DStv internet service in 2021, MultiChoice is working to offer its connectivity services to customers, who can bundle their entertainment and online access with one provider.
This model has been successful in the US for Comcast and the UK for Sky.
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