Thursday, September 26, 2019

Cell C is gutting its video streaming service Cell C black by reducing investment by R120 million as Cell C posts R8 billion loss.

With massive ongoing losses, cuts to several of its services have been unavoidable as the embattled Cell C released its latest annual financial results showing a massive loss of R8.03 billion, revealing that it has cut back spending on its struggling Cell C black video streaming service by at least R120 million.

Cell C's R8.03 billion net loss for the financial year ending 31 May 2019 is a massive increase from its R656 million loss in the previous financial year and in which Blue Label Telecoms owns a 45% stake.

Douglas Craigie Stevenson, Cell C CEO, says management is trying to stabilise the beleaguered operator with a turnaround strategy which has included cutting back on its struggling Cell C black subscription video-on-demand (SVOD) service.

R120 million in spending is being cut from Cell C black which means less content for users than what there used to be as Cell C black competes with services like MultiChoice's Showmax, Netflix South Africa, Amazon Prime Video and other players in a very small but overheated South African OTT market.

In its financial report Cell C says that it is "reviewing the channel options for the Black video streaming service – which will ensure a saving of R120 million annually with additional savings expected as Cell C continues to right-size this business unit".

Douglas Craigie Stevenson says its investment in the creation of its struggling Cell C black that it is now cutting back on was a big mistake.

"Cell C black was not the right play for Cell C. We didn't have the resources to compete in that environment."

In late-August 2019 Cell C black suffered a shocking and abrupt linear channels blackout that then turned out to be deliberate.

While Cell C black told its customers and subscribers that it was "experiencing difficulties which are affecting our live TV channels" and that the IT-division is trying to solve, Cell C had in fact deliberately cut this costly service, keeping some of its own staffers and PR people in the dark and making as if it's a technical issue.

Days later Cell C black suddenly admitted that it deliberately culled the Cell C black service and that "our decision to reconfigure our product is part of putting the business on the right track".

Cell C black subscribers who have abandoned the bad service say they are being kept in the dark as to how to get refunds from the streaming service that suddenly changed its offering without any prior notification.