MultiChoice, Africa’s biggest pay TV company, is facing ongoing challenges that have led to a significant drop in subscribers and earnings. The company, which operates DStv, has seen its subscriber base shrink from over 23 million to 19.3 million in less than two years. This decline comes amidst a tough economic climate, with households feeling the pinch of a cost-of-living crisis. Many families have cut back on entertainment spending, while rising inflation has increased MultiChoice’s operating costs across its 50 markets. Additionally, changing consumer habits, with a shift towards gaming and social media, have added pressure on the business.
The company recently shared an update highlighting that the cost-of-living crisis, combined with high inflation and interest rates in many regions, continues to impact its performance. This is expected to negatively affect its financial results for the year ending March 2025. Despite returning to a positive equity position, MultiChoice is focusing on preserving capital due to the challenging environment. At the halfway point of the year, the company reported a drastic fall in annual profit, dropping from R1.5 billion to just R7 million, largely due to foreign exchange volatility and broader economic issues. Subscriber numbers, measured on a 90-day active basis, fell by 11% to 19.3 million, with South Africa alone losing 400,000 customers, particularly in the premium segment.
On the revenue front, MultiChoice saw a 4% increase to R25.4 billion on an organic basis, driven by price hikes and new product growth. However, when accounting for foreign exchange pressures and a stronger rand, reported revenue dropped by 10%. The company also cautioned that dividends for Phuthuma Nathi shareholders, who own 25% of MultiChoice SA through a successful BEE scheme, are likely to be much lower this year. Meanwhile, MultiChoice is navigating a takeover bid from French broadcaster Canal+, which owns over a third of the company and aims to buy the rest at R125 per share. The deal’s completion has been delayed to October due to regulatory hurdles.