MultiChoice, the company that owns DStv, is betting on Showmax to become the largest streaming service in Africa. However, it faces significant competition from global players, an under-connected market, and a smaller share of the market than anticipated.
MultiChoice has partnered with NBCUniversal, a subsidiary of Comcast, to revamp Showmax and transition it to the Peacock platform. The company has ambitious expectations and plans to roll out the new Showmax across Africa.
While Africa is a continent with immense growth potential, it is relatively underserviced compared to the international market. Many new and established players are vying for a share of this growth, including Netflix, Disney+, and Amazon Prime.
Despite the competition, MultiChoice believes that Showmax can compete with these players through its understanding of the continent and unique local content offerings. However, Sanlam Private Wealth investment analyst Dumisani Chiume recently sold most of his clients’ portfolios in MultiChoice, citing the steep competition Showmax faces from global streaming giants like Netflix.
Furthermore, the market may be far smaller than MultiChoice hopes, making competition on the continent even more challenging. Digital TV Research predicts that Africa’s total number of video streaming subscribers will only be 15.6 million by 2028.
The World Bank estimates that only 36% of Africa’s total population will have access to broadband internet in 2022, and broadband is relatively expensive in Africa. These factors make Africa a more difficult market for streaming services to penetrate.
Despite these challenges, MultiChoice has set an ambitious target of increasing its total subscriber base to 50 million users by 2028, with Showmax accounting for a significant portion of that growth. Showmax has achieved a compound average growth rate of around 35% since its launch in 2015, and the company expects a CAGR of 90.4% for the next five years.
PwC predicts that South Africa, Nigeria, and Kenya, currently the largest streaming markets in Africa, will continue to dominate. The company has an ambitious plan to generate US$1 billion with Showmax 2.0 within the next five years.
