DStv viewership declines by about 12% on average when South Africa enters stage-6 load shedding, MultiChoice Group CEO Calvo Mawela has said.
Speaking to TechCentral, Mawela said this is a “significant” decline “for a company like ours”, but that other broadcasters are seeing an even bigger slump in viewership when Eskom ramps up nationwide power cuts.
“If you look at the overall broadcasting sector, there’s a 32% drop in viewership as a whole in South Africa when we reach stage 6,” he said.
The power cuts – coupled with increasingly tough economic conditions – are also contributing to an increase in people choosing to cancel DStv, or churning away from the platform until a new show or sports event they want to watch is aired.
To cope with these pressures, MultiChoice has embarked on a multi-year cost-reduction programme, achieving R1.3-billion in savings in the financial year that ended in March – ahead of a target of R800-million. The cost-saving initiative will continue into the new financial year, which should help to cushion profit margins in a difficult economic environment.
Mawela’s remarks come as MultiChoice seeks to diversify its revenue streams, including from non-broadcasting sources. These sources include KingMakers (previously BetKing), an Africa-focused sports-betting platform operator, and Namola, a personal security app for smartphones.
‘Significant’
Some of these new businesses will eventually grow to become as big as MultiChoice’s pay-TV business, he said. “The reason we have decided to go into these verticals is they can contribute significant amounts of revenue to our business.”
Read: Showmax 2.0 to be launched this year – what to expect
Last week, MultiChoice reported a 2% improvement in core headline earnings per share – which strips out some non-recurring costs as well as currency fluctuations – reaching R8.28 for the year to March. However, it elected not to pay a dividend, saying it needs to retain capital to ensure its balance sheet remains strong and ensure it has the resources to weather South Africa’s economic woes and weaker rand, and to fund the relaunch of Showmax, expected in the fourth quarter. – © 2023 NewsCentral Media
