MultiChoice Group (MCGJ.J), South Africa’s leading pay-TV company, is set to join forces with U.S. media conglomerate Comcast’s NBCUniversal Media (CMCSA.O) in a substantial investment venture worth approximately $177 million for the Showmax video streaming platform during the current financial year. This strategic partnership aims to enhance MultiChoice’s existing Showmax streaming service, which is undergoing transformation utilizing NBCUniversal’s Peacock streaming platform.
Last year, MultiChoice, Africa’s largest pay TV provider, initiated a collaborative effort with Comcast’s NBCUniversal and Sky to revamp Showmax, a streaming service already in operation. As part of this transformative endeavor, MultiChoice transferred a 30% stake in Showmax to NBCUniversal. While the exact initial sum paid by NBCUniversal for this stake remains undisclosed, MultiChoice retains a majority 70% ownership share in the streaming platform.
MultiChoice has disclosed that it and NBCUniversal will offer financial support to Showmax during its investment phase, proportionate to their respective shareholdings. Furthermore, Showmax shareholders are set to share future profits based on the same proportional distribution.
On February 2nd, both MultiChoice and NBCUniversal will inject a combined $30 million in equity funding into Showmax, with each party contributing according to their shareholdings. Additional equity funding, with a ceiling of $127 million, is anticipated for the remainder of MultiChoice’s financial year ending on March 31. Out of this total, MultiChoice will shoulder 70%, equivalent to up to $88.9 million.
Before the latest announcement on Thursday, both MultiChoice and NBCUniversal had already committed an additional $20 million in equity funding towards Showmax, demonstrating their dedication to enhancing the platform’s capabilities.
MultiChoice faces stiff competition from international streaming giants like Netflix (NFLX.O), Amazon (AMZN.O), and Disney (DIS.N). To maintain its competitive edge, MultiChoice has made substantial investments, including significant funding for Showmax. Netflix, for instance, has also ventured into producing local content to cater to African audiences.
MultiChoice, in its communication with investors last year, emphasized that the revamped Showmax platform has the potential to generate an additional $1 billion in revenue over the medium term. To achieve this ambitious goal, MultiChoice has rolled out a standalone live Premier League soccer plan for mobile users in Africa. Additionally, the company plans to launch original local content programs in February, complemented by international programming from NBCUniversal and Sky.
This strategic partnership between MultiChoice and NBCUniversal signifies a significant step towards enhancing the streaming experience for audiences in Africa and beyond. It underscores the ever-evolving landscape of the entertainment industry, where traditional pay-TV providers are adapting to stay competitive in an era dominated by digital streaming services.
