South African Pay-TV operator, Multichoice Group, reported a loss of 243,000 subscribers from its Nigerian unit, covering DStv and GOtv services, between April and September 2024. This was disclosed in the company’s Interim Financial Results released on Tuesday.
Economic Factors Impacting Subscriber Base
High inflation in Nigeria, currently above 30% due to rising costs of food, electricity, and fuel, led many customers to cancel their subscriptions. In its previous report for the fiscal year ending March 2024, Multichoice revealed an 18% drop in Nigerian subscribers.
The subscriber losses are part of a broader trend affecting Multichoice’s Rest of Africa operations, which saw 566,000 subscribers leave during the same period.
Nigeria and Zambia: Key Contributors to Losses
Although the latest decline of 566,000 subscribers was an improvement over the previous six months’ loss of 803,000, most losses were concentrated in Zambia and Nigeria. Zambia alone accounted for 298,000 lost subscribers, driven by drought-induced power outages lasting up to 23 hours daily.
Facing Challenging Conditions
Calvo Mawela, CEO of Multichoice Group, acknowledged that the company is navigating its most difficult operating environment in nearly 40 years. He emphasized the need to adjust to economic realities, citing currency depreciation and weak consumer spending as significant challenges.
“We’ve adjusted our cost base to reflect current conditions and expect to return to positive net equity by November,” Mawela stated, noting that Multichoice’s liquidity remains robust with over ZAR10 billion in available funds.
Adapting to Streaming and Consumer Trends
The shift toward streaming services and changing viewer habits has also impacted the traditional broadcast business. Multichoice’s streaming service, Showmax, saw a 50% year-on-year increase in paying subscribers, prompting an additional ZAR1.6 billion investment to sustain its growth.
Price Increases Amid Inflation
Amid surging inflation, Multichoice Nigeria raised DStv and GOtv prices three times within 12 months—April and November 2023, and again in April 2024. This led to a legal dispute when the Competition and Consumer Protection Tribunal in Abuja issued an order to halt the latest increase. Ignoring the ruling, Multichoice was fined N150 million and mandated to provide Nigerian customers with one month of free service.
These efforts highlight the complex landscape Multichoice navigates as it balances cost pressures, regulatory challenges, and shifting consumer behaviors across its African markets.
Source: Nairametrices