MultiChoice investors lose R32 billion ($1.7 billion) in six months as it struggles to retain high-end subscribers and find new revenue sources.
At the start of March 2023, MultiChoice’s share price exceeded R147 ($7.86). On March 13, when it issued a warning that the revenue growth in its South African business would fall short of expectations, it decreased to about R120 ($6.41) per share.
Due to its fixed cost base and additional Showmax expenses, it had a significantly lower trading margin. At that point, a six-month decline that cost the market cap billions of dollars started.
One of MultiChoice’s biggest problems is the continued cancellation of South Africans’ DStv subscriptions, particularly in the Premium and Mid-market segments.
The impact can be seen in DStv’s average revenue per user, which dropped from R269 ($14.38) to R256 ($13.69) year over year.
What’s the way forward? The company is looking for new revenue streams to offset the decline in high-end subscribers. This plan includes selling Internet packages, investing billions in its Showmax streaming service, and acquiring a large stake in sports betting service KingMakers.
