MultiChoice and NBC have spent almost R6bn on video streaming platform Showmax over the past year as part of an effort to bolster Africa’s largest paid video-on-demand service.
MultiChoice, which is the subject of a takeover bid by French broadcaster Canal+, unveiled an updated version of Showmax in January 2024. The platform is underpinned by technology from US giant NBCUniversal.
Africa’s biggest pay TV group said in a statement on Thursday that since September 27 2024 it and NBC had provided $145m (R2.7bn) in equity funding to Showmax in proportion to their shareholdings.
In addition, MultiChoice provided another $800,000 as equity funding to cover its specific shareholder costs.
This adds to the $164m spent by the DStv operator and NBC between April and September 2024.
A new Showmax group was created in 2023 that is 70% owned by MultiChoice and 30% by Comcast-owned NBCUniversal, and powered by its Peacock technology. Expenses for the business, and profits in the future, are shared in the same ratio.
Equity funding is provided monthly or “at other intervals”, depending on Showmax’s current working capital requirements and “as may be determined by the board” for budget purposes, subject to a maximum capped amount.
In its earnings report for the six months to end-September, MultiChoice reported that Showmax delivered a 30% year-on-year increase in paying subscribers, or 50% year on year when excluding discontinued services, namely Showmax Pro and the Showmax diaspora offering.
The Showmax segment’s trading losses increased by just more than three times year on year to R2.4bn on a gross basis before NBCUniversal’s 30% minority share of funding these losses, “impacted by a step change in general entertainment content costs, increased technology costs — notably the Peacock Africa localisation investment and partner integrations, and higher sales and marketing expenditure to support market and partnership launches”.
Last month, the group announced price increases for DStv and Showmax, which came into effect in April.
The price of Showmax has remained steady since 2015 and is unchanged at R99 a month, while its Premiere League option will go up by R30, or 43.47%, to R99. Showmax entertainment mobile, the company’s cheapest package, goes up R5, or 11.1%, to R50.
Showmax entertainment and football, the priciest package, rises 7.14% (R10) to R150 a month, with the mobile version going up R21 (21.21%) to R120.
Further increases had been expected, given a VAT increase meant to come into effect in May. It remains to be seen how this will affect prices, if at all, now that National Treasury has backtracked on its planned tax increase.
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