MultiChoice Chief Executive Calvo Mawela stated that a potential $3bn merger with French media company Canal+, owned by Vivendi SE, would strengthen the African TV company’s ability to compete with US streaming giants such as Netflix.
In an interview with Bloomberg TV on Thursday, Mawela explained that pending regulatory approval, the deal would expand MultiChoice’s market reach by combining its presence in English-speaking African countries with Canal+’s foothold in French-speaking regions.
The merger would provide the company with the scale needed to negotiate better rates for content and improve revenue potential, he said.
“A combination gives us a better chance to compete against the global giants,” Mawela said, emphasising that scale is crucial in the streaming industry.
“This enables us to negotiate better rates for content and generate more revenue, especially with one party operating in French-speaking Africa and the other in English-speaking parts of Africa.”
The merger, classified as a “large merger” under South African competition law, will require approval from the Competition Tribunal.
MultiChoice officially accepted Vivendi’s offer in June.
According to research firm Omdia, Netflix had around 1.8 million subscribers across Africa as of November 2023, while Showmax, MultiChoice’s streaming service, had approximately 2.1 million.
Projections from Digital TV Research suggest that by 2029, Netflix could lead the African streaming market with 6.9 million subscribers, while Showmax may reach 3.7 million.
In a strategic move to bolster Showmax, MultiChoice partnered with Comcast’s NBCUniversal and Sky last year, adding live Premier League coverage to its offerings.
MultiChoice also reported a challenging period in Nigeria this week.
In its interim financial results for the six months ending 30th September 2024, the company revealed a loss of 243,000 subscribers across its DSTV and GOTV services in Nigeria.
The company attributed this decline to high inflation, which has increased the costs of essentials like food, electricity, and fuel, straining household budgets