AS THEY LOOK FOR OTHER OPTIONS IN RSA......
Multichoice will have to look for more options now to generate revenue in South Africa after its market cap declined by R32 billion in six months, a development that has caused tremendous value destruction for investors.
Results released by Multichoice for the year ended 31st March, 2023 showed a 7% revenue increase but a 48% decline in free cash flow in its South African business.
According to reports from the Rainbow nation, one of Multichoice's biggest problems is that South Africans are dumping their DSTV subscriptions, mainly in the Premium and Mid-market segments.
The impact to this development has already been proved as the DSTV average revenue per user, has declined from R269 to R256 year-on-year.
Currently, Multichoice has established new strategies which includes; selling Internet packages, pumping billions into its Showmax streaming service, and acquiring a large stake in sports betting service Kingmakers formerly known as BetKing.
Sadly, Multichoice has already lost a tremendous amount of money after investing nearly R6 billion in KingMakers after buying a 49% stake in the companie's multiple transactions worth K5.9 billion.
This was so because KingMakers did not live up to its promise though it managed to increase its revenue, but the costs associated with growth were far higher than anticipated.
In the last financial year, KingMakers have recorded a loss of around R500 million.
Meanwhile, Multichoice said Africa is the final frontier for subscription video-on-demand (SVOD) growth and is confident that Showmax can become the leading streaming service on the continent as they expect a step-change in customer numbers by leveraging their partnership with Comcast and launching new products and price offerings.
It has been revealed that the company is now pumping lots of money into Showmax and local content to facilitate their expected growth which will be ten times more local content within ten years.
