According to industry reports, the business environment that supports subscription streaming in developed countries does not translate easily to the African context. This follows MultiChoice’s announcement that Showmax was “not a commercial success.”
Over the past decade, global streaming giants like Netflix, Amazon, and Disney have transformed how audiences access entertainment. Their achievements hinge on a large subscriber base, robust internet connectivity, and substantial revenue per viewer. In contrast, Africa faces unique hurdles, including limited internet access, price sensitivity, and various payment challenges.
These obstacles help explain why even well-capitalised regional platforms such as Showmax have struggled to achieve profitability.
Streaming services represent a costly venture on a global scale. Platforms must continuously invest in technology, licensing, and original content to attract and retain subscribers.
For MultiChoice, Showmax became a significant financial drain during its growth phase. The company invested billions of rand to enhance technology, secure international content partnerships, and create local originals. However, the financial returns consistently fell short of the massive investments.
Showmax’s trading losses increased sharply, reaching US$265 million in a single financial year as the platform aggressively expanded its operations and content library.
Although the subscriber count grew, revenue growth did not meet expectations. Showmax’s revenue peaked at approximately US$60 million in 2024, a far cry from the ambitious US$1 billion target initially envisioned by executives.
Ultimately, the disparity between expenditure and revenue became untenable. Yet, these financial struggles were not merely due to missteps in strategy; they were indicative of deeper infrastructural challenges within Africa’s digital economy.
One of the most significant barriers facing streaming services in Africa is the state of internet infrastructure. Streaming video necessitates consistent, high-speed broadband. Unfortunately, much of the continent still relies heavily on mobile networks rather than fixed broadband.
Industry estimates reveal that only 4-5% of electrified households with TVs in Africa have access to fibre broadband, stymying the quality and reliability of streaming services.
While smartphone usage is on the rise—around 600 million smartphones are currently in use across Africa—mobile internet connections often fall short for long-form video streaming due to speed constraints and high data costs. Many users experience issues such as buffering, reduced video quality, and unstable connections.
Even in areas with internet access, the cost of data presents another challenge. Streaming requires substantial bandwidth. An hour of high-definition video can utilise between 1 GB and 3 GB of data, depending on the platform.
In many African markets, mobile data remains relatively expensive compared to average incomes. Consequently, the overall cost of data for viewing content can exceed the cost of the streaming subscription itself.
This situation creates a paradox: while platforms may offer competitively priced subscriptions, consumers still face significant data costs when factoring them in.
Moreover, payment methods present another obstacle for consumers accessing digital services. Most streaming platforms rely on recurring credit card transactions, which function well in regions with widespread banking services. However, millions of Africans do not use traditional banks; instead, they often depend on prepaid mobile balances, bank transfers, or mobile money platforms.
This discrepancy complicates operations for streaming companies. Managing recurring payments becomes challenging, payment failures increase, and acquiring new customers becomes more costly. Platforms must establish payment systems for each country, navigating diverse regulations and technical challenges.
These challenges increase operational expenses and create unpredictability in subscription revenue.
