Pay-TV operator Multichoice Group has reported a significant loss of subscribers in Nigeria, with about 243,000 customers opting out of its DStv and GOtv services between April and September 2024.
The South African company attributed this decline to the high inflation rate in Nigeria, which has compelled many subscribers to prioritize essential expenses like food and electricity over entertainment subscriptions.
The recent data, disclosed in Multichoice’s Interim Financial Results for the six months ending September 30, 2024, follows an earlier report where the company noted an 18% drop in its Nigerian subscriber base for the financial year ending March 2024.
Additionally, the firm’s Rest of Africa operations saw a loss of 566,000 subscribers during the same six-month period. Multichoice highlighted that the combined losses in Nigeria and Zambia were substantial, with these two markets accounting for the majority of the decline.
According to the financial report, “With the Rest of Africa business having seen a decline of 803k subscribers in 2H FY24, this rate of decline slowed to 566k in 1H FY25. Of this decline, 298k related to Zambia and 243k related to Nigeria, with remaining markets on the continent reflecting only a minor decline of 25k.”
While high inflation was cited as the primary cause for subscriber losses in Nigeria, Multichoice noted that in Zambia, the decline was driven by severe drought-induced power outages, some lasting up to 23 hours a day.
Multichoice Group CEO Calvo Mawela acknowledged the difficult business environment, stating, “The company is facing its most challenging operating conditions in almost 40 years.” He noted that to adapt, the group has taken proactive measures to align the business with current economic realities and industry shifts.
Mawela explained, “Operating across Africa typically subjects the group to currency moves. Abnormal currency weakness over the past 18 months has reduced the group’s profits by close to R7 billion. Combined with the impact of a weak macro environment on consumers’ disposable income and therefore on subscriber growth, it required the Group to fundamentally adjust its cost base.”
He expressed optimism about the company’s financial outlook, stating, “We expect to return to a positive net equity position by the end of November this year, supported by a number of developments and initiatives. The Group’s liquidity position remains strong, with over ZAR 10 billion in total available funds.”
The CEO also highlighted the challenges facing traditional pay-TV services due to the rise of streaming platforms, social media, and shifting consumer preferences. Mawela pointed out that Multichoice’s streaming service, Showmax, experienced a 50% growth in its paying customer base year-on-year, positioning the company well within the evolving media landscape.
He added that the group has ramped up investment in this segment, injecting an additional ZAR 1.6 billion during the interim period to enhance capacity and foster growth in its streaming business.
