MultiChoice (the South African company that runs DStv and GOtv) has announced a content distribution deal with Disney company Africa, coming almost a week after Sanlam Private Wealth made its intention to sell out its client shares.
Details of the Deal
The deal will allow MultiChoice to retain its current portfolio of Disney linear channels until 2027 through its direct broadcast satellite service, DStv.
This follows a partnership that began nearly two years ago when Disney+ debuted in South Africa in partnership with the pay-TV operator. With this collaboration, the American streaming platform was able to kick off its next phase of international expansion, which included plans to launch in 42 countries across 11 territories.
Read also: MultiChoice pays $37m Nigerian tax
Six of Disney’s most beloved 24-hour channels—including National Geographic, National Geographic Wild, Disney Channel, Disney Junior, ESPN, and ESPN2—will continue to air on DStv for the upcoming four years as a result of the revitalising agreement. You can access them with the DStv Explora Ultra receiver.
Tournaments hosted by organisations like the US National Hockey League, Major League Baseball (NHL), the National Football League (NFL), and the National Basketball Association (NBA) will naturally be available on both sports channels.
The distribution renewal guarantees that The Walt Disney Company Africa’s six 24-hour channels will continue to reach audiences across the continent, according to Christine Service, senior vice president and general manager of the company’s Africa operations. Service also noted that this marks another proud milestone in the long-term relationship with the MultiChoice Group.
According to Nomsa Philiso, CEO of general entertainment at MultiChoice South Africa, the extension of their partnership with The Walt Disney Company and the fantastic linear channels on DStv enhances their offering and increases the pleasure of entertainment. This is to guarantee that customers can enjoy their favourite shows and films easily, whenever and wherever they want, on cutting-edge platforms.
Details on the investment clash with Sanlam Private Wealth
The prominent investment firm Sanlam Private Wealth has declared that, due to the relatively high risk and low potential upside, it has removed MultiChoice from the portfolios of the majority of its clients.
A number of problems have arisen for Multichoice, which has hurt the group’s investment case. Huge fines in certain African countries, new regulations, falling ratings, serious competition from international streaming services like Netflix and Amazon Prime Video, and now the possibility of a buyout are all on the list of problems. In light of these difficulties, MultiChoice’s stock price has not gone very well.
Given these factors, Sanlam Private Wealth has decided to stop providing its clients with share offerings. After re-evaluating the MultiChoice group’s future, the investment firm has decided that it is not a company it wants to be a long-term owner of.
MultiChoice pushes into streaming as the DSTv model struggles
Why Multichoice began to lose its position
Due in large part to its sports broadcasting rights—crucial for subscriber retention—DStv, MultiChoice’s direct broadcast satellite television service—which operates in 54 countries across sub-Saharan Africa—enjoys a majority market share. However, the group will likely face competition in this arena from other players in the long term.
For instance, MultiChoice has aired the Africa Cup of Nations (AFCON) since 1992, but there has been a lot of fuss recently over who gets to air the tournament. Just one week after announcing it would not be airing the event this year due to a failed sublicensing agreement; the group announced in January that its SuperSport pay-TV service had obtained the broadcast rights to the event.
More aggressively, MultiChoice’s other competitive advantages are beginning to crumble. For instance, the cost of moving to competing products is now significantly lower due to the dramatic decline in data costs over the last decade. Competitors’ attractive offerings have made customer retention a major challenge for MultiChoice, as companies like Netflix have introduced affordable mobile-only plans.
More so, agreements with a single distributor are fading away. As an example, HBO is now distributing its popular shows through Netflix in addition to MultiChoice, and it is no longer granting exclusivity to MultiChoice.