MultiChoice is facing a stark ultimatum — adapt quickly or face the grim reaper of irrelevance.
In an earnings report for the six months to end-September, MultiChoice said “unprecedented foreign exchange volatility” combined with macroeconomic challenges sent its half-year profit nosediving from R1.5bn to a miserly R7m.
The rise of streaming giants like Netflix has altered the entertainment landscape, and resting on laurels is not an option.
Let’s cut to the chase. The traditional satellite pay-TV business model resembles a horse and buggy in the electric car era. MultiChoice can no longer bank on the allure of exclusive sports broadcasting as its saving grace. The competition is stiff, relentless and leagues ahead in the game.
Netflix, with a treasure trove of binge-worthy series, has earned the masses. And it’s not just Netflix, other streaming services have launched an onslaught to woo viewers away.
So what’s MultiChoice’s response? Cost-cutting? That’s a start, but trimming the fat won’t stave off the ravenous wolves at the door. MultiChoice must pivot quickly.
To be sure, it has been investing heavily in its streaming service Showmax, where it has pumped R1.6bn in the half-year period.
CEO Calvo Mawela has something to show for it: a 50% growth in Showmax’s subscriber base. That said, while subscriber growth is a good sign, it’s just one piece of the puzzle.
Time is of the essence. MultiChoice must evolve with zeal or prepare to bid farewell to its reign as the kingpin of African entertainment. The choice is yours.
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