The African entertainment company MultiChoice Group Limited (MCG) recently announced its annual report for the year ending on March 31, 2024, reporting a substantial increase in its revenue from the company’s streaming video-on-demand service, Showmax. As per MCG, Showmax has delivered a revenue of US $53 million, marking a 22% increase over the previous year.
In a statement by MultiChoice, “FY24 represented a pivotal year for Showmax. Having officially concluded the partnership with Comcast in April 2023, the long-awaited relaunch took place in February 2024”.
The growth however has not been free of hiccups as Multichoice reported that Showmax’s trading losses also went up to US $141 million, despite the losses being below the expected range of US $162 million to US $217 million. These losses were due to operational expenditures and the launch of Showmax towards the end of the annual period.
Diving into further details, Multichoice also reported that Showmax achieved significant growth after the platform’s relaunch, post termination of the Showmax Pro service, which delivered higher-average revenue per user. Showmax compensated for the closure of Showmax Pro by demonstrating record single-month growth in March 2024 where the number of paying subscribers increased by 16% as compared to the migrated user base at the time of relaunch until year-end.
Another notable achievement over this migration period was that 100% of the subscribers moved to the new platform and over 88% of them remained active and have continued to pay for the platform’s service. Around all these achievements, one should also note that Showmax’s subscription fees increased by 1% year-on-year.
Yolisa Phahle, CEO of General Entertainment at Multichoice, said, “We are aiming to generate revenue of more than $1 billion after five years, with a trading profit breakeven target in full-year 2027.” Furthermore, she remarked “We are targeting EBITDA margins of 25% and free cash flow margins of around 20% at scale.”
Phahle emphasized that the industry views Africa as the final frontier for SVOD growth and outlined that the goal of Showmax is to become the leading streaming platform in Africa with the arrival of Showmax 2.0. Lastly, Phahle also expressed confidence in Showmax to start becoming profitable by the end of its financial year of 2027.