by Thinus Ferreira
MultiChoice says the premium tier of its own video streaming service, Showmax Pro, isn't cannibalising its existing base of DStv Premium subscribers paying for and watching premium content on traditional linear pay-TV channels like M-Net and SuperSport.
MultiChoice says existing premium pay-TV customers are not deciding to rather switch to Showmax Pro since the sports offering is limited and actually more comparable to DStv Compact, with a bigger focus on football content and not so much cricket and rugby content that's only accessible on higher DStv tiers.
MultiChoice released its interim financial results for the six months until end-September 2022 with its top-end premium subscriber base that shrunk by another 3% and 100 000 subscribers in South Africa. Its mid-market subscribers in South Africa shrunk by 100 000 DStv subscribers as well.
MultiChoice still managed to grow its overall number of pay-TV subscribers to 22.1 million customers and now has 9.1 million (41%) pay-TV subscribers in South Africa and 13 million (59%) in the rest of Africa (ROA).
In its interim results investors' call, Calvo Mawela, MultiChoice Group CEO, said "Showmax Pro is basically trying to make sure that those customers that are subscription video-on-demand (SVOD) customers and are not on the linear side of the business, are able to get sport over and above the SVOD offering that we give on Showmax".
"We have seen people that are on Showmax, trying to figure out how to get sport and that's why we gave them an offer which is similar to a DStv Compact offer, and the line-up of sports is similar to what is offered on Compact."
He said "we have seen a good traction in Showmax Pro and that's why we are reporting that subscriber numbers have almost doubled in this reporting period and we think that it has got legs to stand on and will continue to expand on it and make sure that we support it and people can see the value that it brings, especially to SVOD customers that are not interested in the linear side".
Tim Jacobs, MultiChoice Group chief financial officer (CFO) said "we don't see this necessarily as a massive substitution risk or a cannibalisation risk on our linear platform (DStv) because the sports offering is largely football, which is priced at a similar pricing level to what you can get football on DStv Compact Plus, but it addresses a different market segment that doesn't necessarily want to buy a DStv decoder".
"They want to rather operate in a more of a streaming kind of world. It's not that a premium customer will kind of substitute a premium package for a Showmax Pro package and then be watching cricket and rugby. It is a more limited sports package in there."
"It is still good. It's got most of the football leagues. And for the football fans it's a very attractive offering. But it is targeted at a very specific part of the market," he said.
About its commented video and video streaming subscriber growth, Tim Jacobs said that MultiChoice doesn't want to give specific Showmax, Showmax Pro and DStv subscriber and user numbers since it wants to keep this from competitors like Netflix, Disney, Amazon Prime Video and other global streaming services operating in the same space in South Africa.
"Unfortunately we've made a decision, given the competitive space that we're operating in, and the fact that we don't get much information from any of the participants in this space, to be very cagey about what information we share."
"It's just simply too competitively price-sensitive. So we don't disclose what those splits are, even in subscriber numbers or top-line revenue. What we do do, is give everybody a very clear indication as to the direction that we're travelling in and the relative quantum of what that looks like."
