French television and streaming giant, Canal+, is contemplating a strategic move to potentially acquire a majority stake in MultiChoice, South Africa’s leading pay-television company. The stakes are high as South Africa’s entertainment industry is projected to hit R231 billion, according to PwC. MultiChoice, despite facing a 7% decline in subscribers, aims to revamp its offerings through the relaunch of Showmax.

Analysts, including Lea Zouein from Dataxis, suggest that Canal+, already holding a 31.7% stake in MultiChoice, may choose to amplify its investment and consider a takeover. This move could lead to the establishment of a quasi-monopoly in the region, a potential concern for regulatory bodies.

MultiChoice, banking on its extensive experience in the South African and wider African market, remains confident in its understanding of the region. Despite complaints about outdated content and a last-minute deal for broadcasting the Africa Cup of Nations via SuperSport, MultiChoice CEO, Calvo Mawela, asserts, “Nobody understands Africa like we do.”

The impending relaunch of Showmax provides MultiChoice with fresh impetus. With load-shedding and suppressed disposable incomes in the South African market, the success of Showmax’s revamp is crucial. Dataxis reports that the growing number of streaming options challenges platforms to provide compelling services. The relaunched Showmax aims to address this challenge.

Competition with Netflix:
Netflix, boasting a vast catalog and significant investments in local content production, remains a formidable competitor. As of October 2023, Netflix had 8,371 titles, while Showmax offered 3,020 titles. The competition intensifies with the entry of new platforms like Disney+ and Paramount, expected to launch soon.

PwC analysts predict a 5.5% boost in South Africa’s media and entertainment market, reaching R231 billion over the next five years. The influx of global streaming platforms, including video on demand services, contributes to this growth. The constant entry of new players adds momentum to the revenue from the streaming sector.

Canal+’s potential takeover of MultiChoice marks a strategic move in South Africa’s high-growth entertainment industry. As MultiChoice gears up for the Showmax relaunch, the competition with global giants like Netflix and the anticipation of new entrants promise an exciting trajectory for the region’s media and entertainment market. The outcome of Canal+’s critical consideration will undoubtedly shape the future of pay-television in South Africa.