The company said the combined number of Showmax and DStv Now subscribers was 1.6 times more than those of Netflix in the markets in which MultiChoice operates, and it would be scaling its video entertainment services across Africa.
Approached for comment on Wednesday, MultiChoice CEO Calvo Mawela told ITWeb that the company would not provide additional information.
He said: “We are not providing a detailed breakdown of our products and services, but we believe we are maintaining our competitive position in an early-stage OTT market. The number of DStv Now and Showmax users has doubled in the 2019 financial year and our connected video user base is currently estimated at 1.6x that of Netflix. We are also seeing increased usage on our OTT platforms, as reflected in a 50x increase in play events over three years.”
Independent TV analyst Thinus Ferreira this week criticised MultiChoice, saying “the golden rule in financial reporting – and in life: Something of nothing remains nothing.”
The problem, says Ferreira on his TV with Thinus blog, was that there were no numbers to compare the subscriber bases.
“MultiChoice’s Showmax and DStv Now ‘nothing’ is now 1.6 times bigger than Netflix’s ‘nothing’,” he said.
Ferreira says MultiChoice estimated Netflix user numbers, after which it announced it was 1.6 times larger.
“Because the numbers are likely very small and because MultiChoice and Connected Video don’t want to show their cards to competitors they are under the mistaken impression that doing some David Copperfield no-numbers game is trick enough.”
“Sadly for MultiChoice, it might fool some most of the time, but it won’t fool everyone all of the time.”
Petri Redelinghuys, the founder of Herenya Capital Advisors, told ITWeb this week: “MultiChoice is probably bigger than Netflix in Africa, but not in South Africa. They are more popular in their markets where Netflix hasn’t penetrated yet, but that may change soon.
“Scaling its video entertainment services is the most viable strategy in the long run, as people are moving towards video. This MultiChoice strategy is a workable one as video will be the money spinner of the future.
“MultiChoice can create content for Africa that Netflix cannot. It has the upper hand on the continent because of its understanding of cultures and the experiences, which can help the company create tailor-made content for these markets. However, on the distribution of content, once we have cheaper internet, the game changes.”
Another analyst, Nozi Dikgale, a researcher and media analyst at Africa Analysis, says two key factors give MultiChoice the upper hand in the pay-TV market: the high cost of data and the relatively low broadband penetration.
“The impact of market disrupters such as Netflix is strongly reliant on broadband penetration and data costs,” Dikgale says.
She adds that that in ICASA’s recent draft findings of its inquiry into the pay-TV market, the regulator alluded that `limitation of broadband penetration and high data costs will continue to limit the growth of OTT players and therefore OTT players are not yet posing any threat to Pay-Tv market’.