by Thinus Ferreira
South Africa's Capitec bank has entered into a mutual loss-leader partnership with MultiChoice's Showmax through which Capitec clients can pay R49 a month for Showmax, upping the consumer price pressure competition with rivals like Netflix.
Through the loss-leader strategy, Capitec hopes to attract clients and Showmax hopes to drive subscriber growth.
The R49 per month for Showmax Entertainment on all devices through Capitec as opposed to the R99 monthly for this plan, will also increase pressure on global rivals operating in the country like Netflix South Africa, Disney+ and Amazon Prime Video.
Capitec is South Africa's largest digital bank with 12 million active app users.
Showmax trails Netflix in South Africa and across sub-Saharan Africa in the video streaming race, but last year the former MultiChoice executive Yolisa Phahle said the relaunched Showmax will make R18 billion in five years.
MultiChoice and Showmax are behind target in acquiring subscribers which is estimated to be between 700 000 and one million. MultiChoice aims to have 25 million subscribers by 2028, which means Showmax would need far over 100% growth year-on-year to reach this ambitious target.
MultiChoice recently increased Showmax pricing for its Entertainment plans with the Entertainment all-device plan increasing from R89 to R99 a month and the Showmax mobile plan increasing from R39 to R45. The Showmax Premier League plan remained unchanged at R69 per month.
The Showmax-Capitec loss-leader partnership means that Showmax's entertainment and mobile plans, paid through Capitec, will now be cheaper than even the relaunched cheaper promotional pricing of Showmax 2.0 of before the recent price increase.
Marc Jury, Showmax CEO, in a statement says "We are proud to have joined forces with Capitec to make entertainment even more accessible and affordable. We're kicking off this partnership with incredible pricing that we believe will make customers smile, giving South Africans access to the stories they love from across South Africa, the continent, the world and live football from the Premier League".
Henk Lourens, Capitec group executive for strategic initiatives, says "At Capitec we understand our clients' needs and have partnered with someone that shares our proudly South African vision".
"We want to make entertainment available anywhere and anytime at very affordable rates. We've partnered with Showmax to disrupt the entertainment landscape and create value to our clients. Our clients will have access to entertainment from less than R1 a day, and this is only the start of a very exciting journey with much more disruption to come."
The Showmax discounted vouchers are available to all Capitec clients through the Capitec banking app.
Showmax and Capitec pricing
Showmax Entertainment
Standard Price: R99
Capitec Price: R49
Showmax Entertainment Mobile
Standard Price: R45
Capitec Price: R22
Showmax Premier League
Standard Price: R69
Capitec Price: R34
