French broadcaster Canal+ is betting on its tie-up with MultiChoice bringing it closer its goal of reaching 100-million customers and increasing its relevance in the global market for pay TV as a top-five player.
On Monday, the acquisition of MultiChoice by Canal+ became unconditional, marking the largest transaction undertaken by the French media group and cementing the combined group’s position as a global media and entertainment company.
Canal+ CEO Maxime Saada told Business Day that the MultiChoice deal “puts us where we need to be, at a stage where we have more than 40-million subscribers, spanning over 70 territories and with presence in the highest growing market in the world, which is Africa”.
The tie-up, hailed as the largest of its kind in SA’s broadcasting sector, promises scale, cost-savings and deeper financial muscle — critical ammunition in a market architecture shaped by entertainment giants such as Netflix.
“It gives us the strength to compete with the American companies that are big, and will become bigger, and to partner with these companies,” Saada said. “Our ambition is to be between 50-million and 100-million and the only non-American company in the top-five global entertainment sector.”
Saada also hopes the combined group will have greater financial muscle to compete for lucrative broadcast rights and provide a bigger war chest to invest in big budget productions.
“We need to scale in order to compete. We need to be able to invest vast amounts of resources into content. Global, African, local, European content. We need the production values. We need the world-class standard. We need to tell these African stories that haven’t been told before like Shaka iLembe and Spinners,” he said.
The second element is technology.
“The platform is critical because our consumers want to have access to content as easily as possible, with the best user experience possible. That takes resources as well. This scale that we will have as Canal+ and MultiChoice will enable us to invest significantly and compete in both these areas, content on one side and technology on the other,” Saada said.
In the market for pay-TV viewers, the combined group competes with Netflix, which has just more than 300-million customers.
Disney, the owners of properties such as ESPN, Marvel, ABC and National Geographic, could have more than 300-million customers worldwide by some estimates. Viewership numbers, particularly in broadcast, can be tricky to ascertain. In January, the company said it had 157-million global monthly active users with streaming its content across Disney+, Hulu, and ESPN+ on its advertising supported tiers.
‘Scale or perish’
While former MultiChoice CEO Calvo Mawela touts the merger as a “scale or perish” moment, arguing that only size can drive down subscription costs and compete with streaming titans, critics are wary of the cultural calculus and editorial ramifications of a European-owned African broadcaster.
In the new dispensation, Mawela becomes chair of Canal+ Africa. In other changes, David Mignot and Nicolas Dandoy will, respectively, become CEO and CFO of the Canal+ African operations, which includes MultiChoice Group. Outgoing MultiChoice CFO Timothy Jacobs will continue to hold a senior position in the finance department of the combined group.
Canal+ said on Monday that at the close of business on September 19, it directly owned 46% of the shares of MultiChoice group, excluding treasury shares.
In addition, acceptances in respect of a further 9.77-million shares, or 2.2% of MultiChoice shares, had already been tendered to Canal+ in terms of its mandatory offer before the publication of the finalisation announcement and its therefore in effective control of MultiChoice. The group offered shareholders R125 apiece for their MultiChoice shares.
The offer remains open until October 10.
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