Africa has a streaming war

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Two weeks ago, the biggest deal in African media almost went down.

French TV giant, Canal+ tried to buy MultiChoice, Africa’s king of pay TV.

And they put a clean $1.7 billion on the table.

For a company in the dying TV industry, the offer seemed perfect.

Billions in cash. Decades of hard work. And a TV market share that’s through the roof.

But when MultiChoice replied with a ‘no, thanks’, it lit a fire among their shareholders and across African business in general.

On one side, the deal had everyone asking Canal+ questions like:

• Why bother with a company that's all about TV?

• Who even watches TV anymore?

• What's next, buying a fax company?

And on the other hand, everyone asked MultiChoice:

• Did you learn a thing or two on ‘How not to do business’ from Yahoo?

• How could you pass up a billion-dollar buyout when your TV products are bleeding customers? (DStv alone lost nearly half a million subscribers in South Africa in 2022).

But here’s the thing:

MultiChoice knows that TV is not what Canal+ is after.

As people swap their TV time for ‘Netflix and chill,’ there’s something else catching the eyes of viewers:

Streaming.

Around the world, streaming platforms like Netflix, Amazon Prime Video and Hulu are how most people watch everything now.

• In the US, 99% of households use at least one streaming service.

• In France, a regular person subscribes to an average of 2.7 paid services.

But the Western markets like Europe and North America are saturated. And the big players know:

The next streaming opportunity is right here in Africa, because…

Africa has the numbers

While the world freaks out about an ageing and shrinking population, Africa is buzzing with life and energy.

About 1.4 billion people call it home, 70% of them under 30.

And that population is mobile-first

Africa's the only continent that skipped landlines and went straight to mobile.

And thanks to this, Africa is the world’s biggest mobile-first economy.

75% of Africa’s internet traffic is generated through smartphones - the highest percentage in the world.

But if you hold an African passport, it’ll take a long time before you hear your Smartphones are the main source of entertainment for Africa’s 600 million+ internet users.

And there’s nothing you can’t watch on a phone.

This is why big video streaming platforms all want a piece of Africa’s streaming market.

Like Netflix

Netflix landed in Africa in 2016, starting in South Africa.

And getting here wasn’t cheap.

Netflix has pumped $175 million into Africa since they landed and most of this has gone into licensing and making African content.

So has it paid off?

In six years, Netflix has attracted barely 2 million of the continent's 600+ million internet users.

And other players - like Amazon’s Prime Video called it quits on Africa last month for similar reasons.

Unfortunately for Netflix, things aren't getting easier. Now, they’re looking at a more pressing problem.

Remember how confidently MultiChoice turned down Canal+’s billion-dollar offer?

It’s a big sign that MultiChoice is bullish about what lies ahead, and it’s not TV.

Like Netflix, MultiChoice has streaming written all over its future.

And that future is called Showmax.

Showmax is likely boosting MultiChoice's confidence that its value will rise.

Because it has been rising.

Last year, Showmax overtook Netflix as Africa’s king of streaming, grabbing 40% of the market while Netflix held on to 35%.

So how did Showmax become Africa’s biggest streaming platform?

Well, first off, they have the home advantage.

As an African-born platform, they know the continent, the people, and how best to serve them.

Showmax has doubled down on this knowledge to gain two distinct advantages over the others:

1) The right content 📽️

MultiChoice is the king of content in Africa.

For years, they’ve been producing content that African viewers love.

MultiChoice is behind the African Big Brother franchise, the biggest reality show on the continent, with over 30 million viewers.

MultiChoice holds exclusive viewing rights to the show - and fans can now stream it on Showmax 24/7.

Local content like this made up 50% of MultiChoice’s entertainment spending last year - and their content library clocks in at around 76,000 hours.

That means more value and local content for viewers.

2) It’s built for Mobile 📱

Getting content to the viewers who want it, how they want it, is how streaming platforms live or die.

Remember how Africa is a mobile-first economy?

Well, Showmax is ruthless with its mobile-first strategy.

In 2020, Showmax rolled out Showmax Mobile Pro, adding live TV to their product lineup.

This revamp took shows like Big Brother Nigeria beyond TVs and into viewers’ phones.

This year again, Showmax pumped $27 million into a new look and a slick new app.

And it brings something else: the English Premier League.

Showmax is set to be the first stand-alone mobile platform to stream the Premier League in Africa.

The English Premier League enjoys immense popularity in Africa, boasting 250 million fans streaming matches live.

That’s 20% of the league’s viewers globally.

And knowing how Africans love football, there’s massive potential here for growing Showmax subscriptions.

So as streaming slowly replaces TV time, MultiChoice is banking on Showmax to save it from a painful demise.

And they have all the right ingredients to get streaming right:

• A focus on mobile

• A massive catalogue of local content

And that’s paying off - as Showmax cements its position as the biggest streaming platform in Africa.

MultiChoice CEO, Calvo Mawela, figures that with the Showmax revamp, they'll hit $1 billion in revenue over the next five years.

So it’s no surprise that global media giants like Canal+ want in on the action.

Do you think streaming will save MultiChoice? And did they make the right call in turning down Canal+’s offer?

Let us know here.

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