DStv Subscribers Decline, MCG Share Price Holds Ground on Multichoice Canal+ Deal, Showmax

The most recent results from MultiChoice Group show that the company is in transition, but while facing challenges in its traditional pay-TV

Flat Stock, Deep Strategy: MultiChoice Eyes Digital Future Amid Headwinds

Quick overview

  • MultiChoice Group reported a core headline loss of R800 million for the year ending March 2024, a significant decline from the previous year's R1.3 billion in earnings.
  • The company is experiencing a sharp decline in its traditional pay-TV subscriber base, losing 1.2 million subscribers due to competition from streaming services and macroeconomic pressures.
  • In contrast, MultiChoice's digital divisions are thriving, with Showmax and DStv Internet seeing substantial growth in subscribers and revenue.
  • The ongoing acquisition deal with Canal+ could provide strategic synergies, while the company aims to cut R2 billion in costs to restore profitability.

The most recent results from MultiChoice Group show that the company is in transition, but while facing challenges in its traditional pay-TV sector and placing a significant bet on streaming and broadband to fuel future growth, the share price of MCGJ has not changed much.

Stock Movement and Current Market Sentiment

MultiChoice’s share price remained relatively unmoved despite the company’s challenging full-year results, dipping only slightly following the earnings release. From April to late May, the stock rallied 17%, rising from around 101 ZAC to 118 ZAC, with strong momentum during the final days of that rally.

MCGJ Share Price Chart – The 200 SMA Wil Likely Turn into Support Now

The recent modest pullback reflects investor caution rather than panic, as attention shifts to the group’s digital transition strategy. However, the 200 daily SMA (purple) remains below ready to provide support.

Broadcasting Continues to Decline

Traditional linear broadcasting remains under pressure. Subscriber losses were significant, and revenues from pay-TV operations weakened as viewers migrate to streaming alternatives. The company faces structural changes in the media industry, exacerbated by piracy, macroeconomic strain, and increasing competition from global platforms like Netflix and Amazon Prime.

Streaming and Broadband Drive Hope

In contrast to its legacy business, MultiChoice is seeing strong growth in its digital divisions. Showmax, the group’s rebranded and revamped streaming service, grew paying subscribers by 44% year-on-year. Meanwhile, DStv Internet, its fixed wireless broadband product, posted an impressive 45% jump in users and an 85% surge in revenue. DStv Stream also grew its subscriber base by 38%, confirming that the company’s digital pivot is gaining traction among consumers.

Canal+ Deal and Strategic Vision

A key part of MultiChoice’s forward-looking strategy is its deepening relationship with French media giant Canal+, which made a mandatory offer to acquire remaining MultiChoice shares at R125 per share. The deal is currently under regulatory review, with South Africa’s Competition Commission having recommended conditional approval to the Competition Tribunal. If completed, the acquisition could offer significant strategic synergies and value for both entities and their stakeholders.

MultiChoice Slumps to R800 Million Loss as Subscribers Shift to Streaming

🔻 Annual Performance Overview

  • MultiChoice reported a core headline loss of R800 million for the year ending 31 March 2024.
  • This is a major reversal from R1.3 billion in headline earnings posted a year earlier.
  • The group saw a 9% decline in revenue, down to R50.8 billion, driven by reduced subscription income and currency losses.

📺 Subscriber Base Declines Sharply

  • Total linear broadcast subscribers fell by 8%, or 1.2 million, to 14.5 million.
  • Losses were evenly split between South Africa and the rest of Africa.
  • The group blamed ongoing macro pressures and price hikes for the drop in subscriber numbers.

🌍 Severe Currency Headwinds

  • A R10.2 billion hit was recorded due to depreciation in local currencies against the U.S. dollar.
  • Foreign exchange losses also contributed to a 49% drop in trading profit, now at R4 billion.

🆚 Streaming Rivals, Piracy, and Structural Shifts

  • MultiChoice flagged rising competition from streaming services, social media, and piracy as key challenges.
  • Subscription income fell by 11%, worsened by customer churn and pricing fatigue.

📈 Streaming Sees Strong Growth

  • Showmax, the company’s streaming platform, saw a 44% increase in active paying users.
  • The relaunch of Showmax helped boost regional market share and streaming traction.
  • However, Showmax losses increased by R2.3 billion organically, reflecting ongoing investment in platform growth.

📊 DStv Internet and DStv Stream on the Rise

  • DStv Stream subscribers rose by 38%, with streaming revenue up 48%, as users shifted online.
  • DStv Internet (fixed-wireless LTE service) posted a 45% increase in users and an 85% jump in revenue, reflecting demand for bundled broadband access.

Efficiency Drive and Profitability Goals

MultiChoice is also prioritizing internal transformation. Management has outlined a R2 billion cost-cutting target by FY 2026, aimed at restoring profitability and ensuring resilience amid macroeconomic volatility. Plans include reducing trading losses at Showmax, returning MultiChoice Africa to breakeven with minimal capital investment, and achieving operating margins in the mid-20% range for the South African business.

CEO Outlook and Strategic Focus

MultiChoice CEO Calvo Mawela emphasized that the group remains resilient despite the macroeconomic and currency challenges:

“Our performance reflects both the challenges we’ve faced and the resilience of our teams. Our results have been affected by currency volatility and macroeconomic pressures, but we are well-positioned for the future thanks to our disciplined execution, cost control, and long-term investments.”

Management remains focused on improving operational efficiency, stabilizing video revenue through customer retention, and accelerating growth in its fintech, insurance, and interactive entertainment verticals.

Conclusion: MultiChoice stands at a strategic crossroads: facing steep losses in its legacy business while aggressively investing in streaming and connectivity to secure future growth. With the Canal+ deal potentially reshaping its ownership and R2 billion in cost cuts underway, the next fiscal year will be critical in determining whether this digital pivot can deliver sustainable returns.

ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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