South African pay-TV giant MultiChoice Group has reported a significant loss of subscribers in Nigeria, with its subsidiary, MultiChoice Nigeria, losing 243,000 customers on its DStv and GOtv services between April and September 2024.
This decline was detailed in MultiChoice’s Interim Financial Results for the period ending 30 September 2024, released on Tuesday.
The company attributed the steep drop in subscribers to Nigeria’s extreme inflation, which has crossed 30%, spurred by surging costs of essential items like food, electricity, and fuel.
For many households, the rising cost of living has made pay-TV subscriptions unaffordable, leading to widespread disconnections.
In March 2024, MultiChoice had already reported an 18% decline in subscribers in Nigeria, a trend that has continued as inflation pressures grow.
MultiChoice Group CEO, Calvo Mawela, acknowledged the challenges, pointing out the impact of currency instability and inflation on the company’s performance.
“Extreme inflation and currency issues have created significant pressure on our business model,” Mawela said.
He noted that the group is taking steps to address the financial strain, adding, “We are making good progress in addressing the technical insolvency that resulted from non-cash accounting entries at the end of the last financial year.”
Mawela indicated that the company’s net equity position is anticipated to recover by November.
Nigeria is not the only market in Africa where MultiChoice is experiencing subscriber losses.
Across the Rest of Africa, MultiChoice saw a drop of 566,000 subscribers, with Nigeria and Zambia recording the most considerable losses.
In Zambia alone, 298,000 subscribers were lost, a decline linked to severe power outages.
Due to prolonged drought conditions, some regions in Zambia faced up to 23 hours of power cuts daily, limiting television access and prompting disconnections.
Mawela explained that these widespread outages left many Zambian households unable to use pay-TV services, thus contributing to the loss.
In addition to economic factors, MultiChoice faces increasing competition from streaming services that offer alternative viewing options.
Mawela acknowledged that shifts in viewer preferences are affecting traditional pay-TV models.
“The competition from streaming services and changes in viewer preferences has become a pressure point,” he stated.
To stay competitive in a changing market, MultiChoice has bolstered its streaming service, Showmax, investing ZAR1.6 billion (around $85 million) to expand its offerings.
This investment has shown early success, with Showmax reporting a 50% growth in subscriptions compared to the previous year.
Mawela sees Showmax as a vital part of MultiChoice’s strategy to adapt to the “streaming revolution.”
“Showmax strategically positions the business to actively participate in the streaming revolution as it gains momentum across Africa,” Mawela added.
In Nigeria, where data costs and internet availability can still be limiting factors, the shift to streaming is gradually gaining traction, particularly among younger audiences.
While streaming growth offers MultiChoice new opportunities, the company remains focused on stabilizing its pay-TV subscriber base in Nigeria and other key markets.
The financial pressures on Nigerian households show little sign of easing, with inflation driving essential costs higher month after month.
Analysts observe that the disconnecting subscribers reflect the financial strain on Nigerian consumers, who are forced to cut back on non-essential expenses.
MultiChoice is not alone in feeling the impact, as businesses across Nigeria grapple with the effects of inflation, fluctuating exchange rates, and reduced consumer spending.
As MultiChoice continues to navigate the challenging economic landscape, its dual approach—maintaining its traditional pay-TV services while growing its streaming platform—could determine its future in Africa’s competitive media market.
