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    TechCentralTechCentral
    Home » Broadcasting and Media » MultiChoice will continue to carry Showmax losses

    MultiChoice will continue to carry Showmax losses

    By Duncan McLeod22 January 2019
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    MultiChoice Group CEO Calvo Mawela

    MultiChoice will carry losses incurred by Showmax in the “medium term”, but the goal is eventually for the streaming television service to turn a profit once broadband infrastructure in South Africa and the rest of the continent has been built out further to support it.

    That’s the word from Calvo Mawela, CEO of MultiChoice Group, which will list on the JSE on 27 February.

    Originally launched as a separate business under Naspers, Showmax was integrated into MultiChoice in 2017, with Showmax’s Polish operations (not part of the integration) subsequently being closed down. Naspers now intends to unbundle its entire controlling stake in MultiChoice to shareholders shortly after the listing.

    We will continue to invest in original programming to improve Showmax’s performance

    Speaking to TechCentral on Tuesday, Mawela said MultiChoice is “very comfortable” with Showmax’s performance to date. “We have a very good research team that compares us to other (over-the-top) offerings in the market,” he said. “So far, we think we are competing well with our peers.”

    However, MultiChoice is looking to improve the Showmax offering, starting with developing more original local content. Following the success of Tali’s Wedding Diary, it will soon debut its second original series, The Girl from St Agnes, on 31 January (watch the trailer below).

    “We will continue to invest in original programming to improve Showmax’s performance,” Mawela said. “The other area of focus is the user experience and the technology behind it to ensure it’s the best it can be around recommendations and so forth.”

    Hollywood

    MultiChoice also plans to leverage its relationships with Hollywood studios and other content suppliers. “We think we can step that up by leveraging those relationships to improve our Showmax offering.”

    Mawela said MultiChoice has no intention of reporting Showmax’s numbers separately when it publishes its interim and full-year results, saying the business is still “in its infancy”. However, as Showmax grows and becomes “significant in our overall mix, we will have to report on it”.

    It is “difficult to predict” when Showmax will become profitable, with external factors likely to determine the timing. “Broadband is still a problem,” he said. “When does 5G come into the picture? The sooner these elements around connectivity are addressed, the sooner we will see the results coming through.”

    However, MultiChoice will not put the brakes on investment in Showmax as the business wants to be ready as soon as the connectivity challenges are solved. “When they (consumers) come, we must have the best product in the market despite them being held back (for now) by the lack of infrastructure.”

    Mawela said he is unable to share an update on MultiChoice’s plans to offer a “dishless”, streaming-only version of DStv, but said the company remains on track to launch it in 2019 as previously communicated. “We are working very hard so we are ready to go to market.”  — © 2019 NewsCentral Media



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