Showmax, MultiChoice Group’s pan-African streaming service, reported trading losses of $141.3 million for the financial year ending March 31, 2024.
Despite positive subscriber growth, start-up costs for the revamped Showmax 2.0 significantly impacted the group’s financial performance.
The commencement of the Showmax investment cycle reduced MultiChoice’s trading profit by R1.4 billion (US$76 million), as detailed in the company’s annual results. These costs, along with US$92.3 million invested in platform technology advancements, led to a 79% decline in the group’s free cash flow, leaving it at approximately US$32 million.
Showmax’s losses, however, were within a better-than-expected range, with MultiChoice previously forecasting trading losses between US$163 million and US$217.3 million. The platform technology investments were part of a partnership with Comcast, using its Peacock platform to enhance Showmax’s capabilities, including 4K/HDR support and data-saving options for low-bandwidth devices.
Showmax revenues grew by 22% to R1 billion, and MultiChoice anticipates continued incremental losses in the 2025 financial year due to ongoing operational costs. The group’s strategy includes centralizing content creation within its Content Hub to streamline resources and reduce costs.
Comcast, which owns 30% of Showmax, contributed US$36 million in equity funding to support Showmax’s working capital needs. This funding is reflected as non-controlling interests in MultiChoice’s financial statements. Notably, Comcast holds a put option to sell its stake back to MultiChoice seven years post-launch, currently valued at R2.7 billion.
Launched in February across 44 sub-Saharan African markets, Showmax 2.0 initially focused on South Africa and Nigeria, with plans to expand to Kenya and Ethiopia in 2025. The new platform discontinued Showmax 1.0 and Showmax Pro, including the “diaspora” package for viewers outside Africa. A unique feature of Showmax 2.0 is the English Premier League mobile-only package, targeting Africa’s 250 million Premier League fans.
Showmax’s localized pricing strategy aims to cater to nine core markets, including South Africa and Nigeria, positioning the platform for wider regional adoption and future growth despite the initial financial setbacks.
