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In the year to April 2025, for every R99 in subscription fees a Showmax subscriber paid for the service, the venture with NBCUniversal (a division of Comcast) was losing R650.<\/span><\/p>\n MultiChoice pinned its hopes on the streaming service being a competitor to global platforms such as Netflix and Disney+, but this effort has come to an inglorious end.<\/span><\/p>\n Read\/listen: Canal+, the new owner of MultiChoice, announced on Thursday that \u201cfollowing a comprehensive review of its streaming activities\u201d Showmax would be \u201cphase[d] out\u201d.<\/span><\/p>\n This is a remarkable, but not unexpected,<\/strong> call from the new owner. The end of the standalone Showmax streaming service has been a long time coming, with Canal+ Group CEO Maxime Saada saying shortly after the acquisition that, while everything was under review, he did not believe that MultiChoice\u2019s multi-brand plan would work. Later, he admitted that Showmax was \u201cnot a commercial success\u201d.\u00a0<\/span><\/p>\n Basically, nothing that MultiChoice planned regarding Showmax panned out. <\/span><\/p>\n<\/blockquote>\n In the most recent financial year where MultiChoice was still listed (to April 2025), Showmax reported revenue of R753 million, with a trading loss of R4.947 billion. Practically all of this was subscription revenue (with only R3 million coming from advertising and other revenue). That year was Showmax\u2019s \u201cpeak investment year\u201d according to MultiChoice. <\/span><\/p>\n It has literally wasted billions on content to get to this point.<\/span><\/p>\n Read: Inside Canal+\u2019s plan to cut billions in costs at MultiChoice<\/p>\n \u2018Everything \u2013 and the kitchen sink\u2019<\/strong><\/p>\n ADVERTISEMENT<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n Until this, it had endured trading losses of R8.8 billion from the new venture, where \u2013 since April 2023 \u2013 Comcast via NBCUniversal acquired 30% of the streaming unit. <\/span><\/p>\n The trading losses read thus:<\/span><\/p>\n It is a hop, skip and a jump to imagine that the trading losses for the current year aren\u2019t exactly much lower than the last year. <\/span><\/p>\n Even though this protracted takeover took a while, it is not obvious that MultiChoice would\u2019ve closed the taps.\u00a0<\/span>It has thrown everything \u2013 and the kitchen sink \u2013 at Showmax with not much success. <\/span><\/p>\n Its subscription revenue from Showmax in FY23, the base year, was R839 million. Following the relaunch in early 2024, it managed to boost this to R1 billion \u2013 an increase of 22%. The real test came the following year, where revenue declined 27% to R753 million (it booked R3 million in advertising and other revenue in that year). <\/span><\/p>\n This was clearly not the launch MultiChoice had been hoping for.\u00a0<\/span><\/p>\n<\/blockquote>\n Read: Until that point, NBCUniversal ploughed in: in two tranches, a total of R2.24 billion in working capital contributions in 24 months. This was for its 30% share of the business. Presumably, MultiChoice funded its share of the requirements.<\/span><\/p>\n The grand irony is that in May 2023, MultiChoice said at its capital markets day that \u201caggressive growth targets over time\u201d would see net revenue of $1 billion (at that point R18 billion) over five years. That would be in 2028, which is not far away, but there are reasons to believe that the Showmax business has barely surpassed R1 billion in revenue. <\/span><\/p>\n This entire business case was ill-considered. Subscription growth, apparently, was fairly okay but it clearly didn\u2019t meet its expectations.<\/span><\/p>\n ADVERTISEMENT:<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n<\/blockquote>\n Added to this is the fact that MultiChoice was on the hook for annual payments to NBCUniversal\/Comcast for a platform fee. Over the seven-year agreement, MultiChoice would have to pay the US giant R6.9 billion. By April 2025, following payments (or as the group described as \u201cdue to the underlying obligations being fulfilled\u201d), this had decreased to R5.8 billion. <\/span><\/p>\n It probably wasn\u2019t a good idea to \u201chedge\u201d its technology costs in dollars. <\/span><\/p>\n Quite how Canal+ extricates itself from this situation remains to be seen, but a hypothetical R1 billion break-fee would easily be worth it, considering the current losses.\u00a0<\/span><\/p>\n Far-flung projections<\/strong><\/p>\n MultiChoice\u2019s business case saw Showmax breaking even on a trading profit basis by FY27 (which would be this current year), with Ebitda (earnings before interest, tax, depreciation and amortisation) margins of 25% \u201cat scale\u201d. The thesis was that MultiChoice\u2019s investment J-curve \u201cshould therefore be somewhat shorter (two to three years)\u201d and \u201cfrontloaded in FY24 (and part of FY25) due to platform costs\u201d. <\/span><\/p>\n This didn\u2019t come to pass.\u00a0<\/span><\/p>\n The capital markets day also shared some fantastical forecasts that projected that the number of Showmax Originals would increase 10-fold over the next decade (to 2033). Its original subscriber business case for the \u201cnew\u201d Showmax was three times that of the \u201chistoric\u201d estimates. After all, says the deck, \u201cAfrica is the final frontier for SVOD [subscription video on demand] expansion\u201d. <\/span><\/p>\n At least the Americans bought that story. The French most certainly didn\u2019t.\u00a0<\/span><\/p>\n Read: SuperSport\u2019s (and DStv\u2019s) monopoly will crumble slowly at first \u2026<\/p>\n<\/p><\/div>\n
Showmax comes to an end
MultiChoice to end loss-making Showmax platform<\/p>\n\n
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South Africans are scrolling, streaming and swiping more than ever before
Canal+ mulls rollout of streaming app for MultiChoice clients<\/p>\n\n