MultiChoice is looking to draw more customers to its video streaming platform, Showmax, through a partnership with SA's largest retail bank, Capitec.
The companies are touting their new deal as a disruptive union that will shift how online video entertainment is consumed in the country, cutting prices by half.
MultiChoice, which is the subject of a takeover bid by French broadcaster Canal+, unveiled an updated version of Showmax in January. The new platform is underpinned by technology from US giant NBCUniversal and was made available to new customers on January 23. Existing customers were migrated in February.
The new platform is available in 44 countries.
On Wednesday, Africa’s largest pay TV operator said it had signed a deal that will see discounted vouchers for Showmax being made available to all the bank’s customers via the Capitec banking app.
In essence, Capitec customers will be able to pay for and access Showmax at cheaper rates using the banking platform.
Showmax’s standard R99 package will be R49 for those banking with Capitec, while the R45 mobile option will now cost R22. Showmax Premier League, a R65 package, will cost R34.
This translates to a 50% discount on streaming vouchers for Capitec’s 12-million app users.
The moves comes just weeks after Showmax increased prices for its standard and entry-level plan by an average of 12% from the beginning of August.
“Showmax, which is aiming to become Africa’s leading streaming service, and Capitec, the biggest digital bank in SA, have joined forces to make entertainment and sport more affordable,” the companies said.
Capitec is hoping to gain an edge over competitors, while keeping customers on its banking platform with the new offering.
“There’s no margin for Capitec, Henk Lourens, group executive for strategic initiatives at Capitec, told Business Day. “What we want to use this to become a better bank, sell other products and keep our clients. So not a profit line for us. But a value-added service that our competitors, the other banks, will find it hard to compete against.”
“We’ve partnered with Showmax to disrupt the entertainment landscape and create value to our clients. Our clients will have access to entertainment from less than R1 a day, and this is only the start of a very exciting journey with much more disruption to come.”
Showmax boss Marc Jury would not be drawn on the details of their commercial agreement with the bank, simply saying that “the true essence of a partnership is where both sides give something up and meet each other halfway.”
“We gain in that we don’t have the same cost per acquisition because Capitec has got a very consolidated customer base that they can talk to and we trust the information coming from them. That’s a massive plus for us.”
MultiChoice has fought to keep prices low. Investment in the platform is costing it huge sums in technology, as well as film and television content that customers can consume.
In the year to end-March, Showmanx spent R1.4bn, adding to the weight on the group’s cash resources. MultiChoice has previously disclosed that it and NBCUniversal would spend as much as $187m (about R3.4bn) on the platform.
Showmax’s revenue for the year grew 22% to R1bn, while trading losses increased to R2.6bn. The group said that those losses came in below the expected range of R3bn-R4bn, with some operational expenditure and depreciation being shifted to the 2025 financial year, given the February launch.
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