MultiChoice loses 1.2 million subscribers as revenue dips by 9% to $2.8 billion

MultiChoice Group has reported a decline of 1.2 million in active subscribers to 14.5 million. The 8 per cent YoY drop, with other significant losses, was revealed on Wednesday during the pay-TV’s financial results for the year ended 31 March 2025.

The group explained that its group revenue declined by 9 per cent to $2.8 billion (R50.8 billion), driven by an 11 per cent decline in subscription revenues. Also, its trading profit declined by 49 per cent to $255.7 million (R4 billion), attributed to a $129.8 million (R2.3 billion) organic increase in trading losses in Showmax. 

Other casual effects are a $293.5 million (R5.2 billion) in foreign currency revenue losses, which were partially offset by the significant outperformance in delivering total cost savings of $208.8 million (R3.7 billion). Its adjusted core headline earnings also accounted for a loss of $45.1 million (R800 million). 

Over the past two years, MultiChoice has lost 2.8 million subscribers and saw a $576.5 million (R10.2 billion) negative impact as a result of the depreciation of African currencies against the US dollar.

“Although reflecting an improvement on FY24 trends, this indicates ongoing broad-based pressure across the group’s entire customer base,” MultiChoice told investors in a statement.

Recall that in an update released last week, MultiChoice Group warned investors of a significant decline in its trading profit for the financial year ending March 31, 2025. 

The company projected a roughly 50 per cent drop in reported trading profit, attributing the downturn to a combination of macroeconomic pressures, rampant piracy, intense competition from global streaming platforms, and substantial investments in its streaming service, Showmax.

Also Read: MultiChoice cracks piracy ring in Malawi leading to the arrest of 2 suspects, streaming equipment confiscated.

MultiChoice has been under pressure from streaming rivals like Netflix, coupled with a weak consumer spending environment in its operating markets. In its remarks, the company blamed “unprecedented headwinds” for the poor annual results.

“The past two financial years have been a period of significant financial disruption for economies, corporates, and consumers across sub-Saharan Africa due to challenging macroeconomic factors,” it said.

The impact of structural industry changes in video entertainment, such as the rise of piracy, streaming services, and social media, has materially affected its overall performance, MultiChoice revealed. 

The company’s financial result comes when it’s working to conclude the sale of the business to French-based Groupe Canal+ in a $3 billion deal. 

Investment in Showmax continues to pay off for MultiChoice

In an expected trend, MultiChoice’s heavy investment in Showmax (its subscription video-on-demand platform) continues to be a significant factor in its profit decline. 

To cut the expected loss, the group embarked on big cost-cutting measures by sacrificing its customer value proposition. This delivered $208.8 million  (R3.7 billion) in cost savings, almost double the cost-cutting savings achieved a year ago and well ahead of the estimated $141.2 million (R2.5 billion).

The group explained that its management team acted proactively to ensure it could withstand the headwinds by increasing prices to keep pace with inflation.

Despite the cost savings, MultiChoice’s organic trading profit declined by 9 per cent year on year due to the increased operating costs in Showmax in its peak investment year.

“Importantly, the group returned to a positive equity position through a combination of cost savings, a stabilisation in currencies and the accounting gain on the sale of 60 per cent of the group’s shareholding in its insurance business to Sanlam,” the group added. 

While the company awaits financial returns from its investment in Showmax, the number of active Showmax subscribers has climbed by 44 per cent in the past year.

The company invested $90 million (R1.6 billion) in Showmax, which reported a trading loss of $146 million (R2.6 billion) in the 2024 financial year but achieved a 50 per cent YoY growth in its customer base.

Despite these losses, MultiChoice views Showmax as a critical component of its future, aiming to position it as the leading streaming platform in Africa. The relaunch of Showmax on Comcast’s Peacock platform in 2024, with 88 per cent of migrated customers reactivating their accounts, underscores this ambition.