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Tech Safari Events This Month

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Now… Let’s get into this week’s edition.

In February this year, the biggest deal in African media almost happened.

French TV giant, Canal+, tried to buy MultiChoice, Africa’s biggest TV operator.

MultiChoice’s DStv service reaches over 50 countries across the continent.

And to own it, Canal + put a clean $1.7 billion on the table.

With revenues dropping as people watch less TV, this offer looked like the perfect lifeline for MultiChoice.

But they replied with a ‘no, thanks’.

And it lit a fire among their shareholders and across African business in general.

Turns out, MultiChoice said no because they knew their worth.

They’re not just bringing TV to over 23 million African homes.

They also own Showmax, which edged out Netflix this year to become Africa’s top streaming platform.

Canal+ saw the opportunity and wasn’t about to back down.

By April, Canal+ sweetened the deal, offering $7.02 per MultiChoice share—about $1.88 billion in total, putting MultiChoice's value around $3 billion.

This time, they agreed on the terms.

Once the acquisition wraps up, Canal+ will be the biggest media player on the continent:

• They’ve got 8 million+ subscribers, owning the pay-TV space in French-speaking Africa

• They’re behind 4,000 hours of African content and over 30 channels in 10 languages

• And pocketing MultiChoice will let them go all-in, moving from TV screens to people’s phones.

So, why is Canal+ so eager to go all in now—and why are they giving MultiChoice such a good deal to make it happen?

1) It’s a golden age of African content

Afrobeats, a Nigerian-born music genre, is taking over the world, and African films are crushing it on global streaming platforms like Netflix.

It’s a great time for African content.

And over the years, MultiChoice has nailed it with African shows.

Their Africa Magic channel is one of the main places to catch Nigerian films.

And they’re behind the African Big Brother franchise, the biggest reality show on the continent, with over 30 million viewers.

But producing and distributing local movies and series from scratch isn’t cheap.

Last year, local content made up 50% of MultiChoice’s entertainment spending.

They spat out 6 500 hours of local content and its local content library now has more than 84,000 hours of content, a 12% increase YoY.

And this investment pays off. Shaka Ilembe, a show from MultiChoice, is now the biggest TV series in Africa.

Filmed in South Africa, it took more than 8,000 people to bring it to life.

And the first episode reeled in over 4 million viewers.

The time and money invested will likely rocket as they put more into creating original content for Showmax.

And Canal+, which has the financial muscle, wants to be part of this.

2) Mobile wins in African streaming

I’m a big sports fan. And every four years, I get excited for the Olympics.

Normally, my family and I would gather around the TV, cheering for the Kenyan athletes together.

But this time, since I wasn’t with them, I streamed every moment of the Paris Games on my phone with Showmax.

For 700 KSH ($5.4), I tuned in through the Supersport channel on Showmax.

Streaming on my phone meant I could watch the games anywhere, anytime.

And for someone who’s never felt the need to own a TV, it was perfect—I only paid for the Olympic month.

A lot of young people in Africa enjoy entertainment the same way: on their phones.

Meet the world’s biggest mobile-first economy.

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

This means there’s a huge mobile market here. And entertainment is right on top of that list.

MultiChoice knows it, and their mobile-first strategy is full throttle.

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

Then this year, they pumped $27 million into a new app with a new look.

Beyond movies and shows, the new app also includes SuperSport—MultiChoice’s sports channel and the biggest in Africa.

This makes Showmax the first mobile platform in Africa where you can stream the Premier League on its own.

Showmax is MultiChoice’s big hope as traditional TV slowly fades out.

And Canal+, recognizing the huge potential of mobile, is eager to get in on this lifeline early too.

3) Playing the long game

Africa is a huge market with a lot of potential.

But you need to play the long game to pull it off.

Netflix pumped in $175 million over six years. But they’ve only reached 2 million of Africa's 600+ million internet users.

Meanwhile, other streaming giants have packed up and left.

In May, Britbox, the UK streaming service, announced it was pulling out of South Africa after just three years.

And Acorn TV, Paramount+, Amazon Prime, and Disney+ have all scaled back or left Africa too.

What’s making them look away?

In Africa, most people need to cover the basics like food and shelter before thinking about entertainment.

We have a lower purchasing power than other markets.

That’s why Nollywood producers are flocking to YouTube—it’s free and gets tons of views, and they make money from ads.

And it’s why Showmax is coming up with cheaper options and mobile-only plans to win over more viewers.

They’re playing the long game.

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

MultiChoice put in decades of work building a media company for the whole continent, not just South Africa.

Now, they’re counting on Showmax to keep them alive as traditional TV fades out.

Canal+ is on board with this vision.

They’re banking on MultiChoice’s deep African roots to bring in local content for audiences across African languages.

And they’re betting that Africa’s booming mobile economy will help Showmax deliver on its promise.

It’s great to see a homegrown African media company stepping up and competing with the global giants.

Do you think Showmax has a shot at delivering big returns in streaming?

Hit reply and let us know

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