MultiChoice grows subscriber base by 5%

South African pay TV company MultiChoice Group reported a loss in the first half due to an upfront investment in preparation for the World Cup. The company's pay-TV subscriber base grew by 5% to just over 22 million households, showcasing resilience in a challenging market environment. Calvo Mawela, CEO of MultiChoice Group, discussed the company's performance and strategic decisions in an interview with CNBC Africa. Mawela reflected on the turbulent year, marked by global events like the war in Ukraine and the conclusion of popular sports leagues that impacted subscriber numbers in the first quarter. However, the second quarter saw a strong rebound fueled by compelling content offerings and improved consumer sentiment. This resulted in a 1 million subscriber growth year-on-year, translating to a 5% increase in the subscriber base. Additionally, the company's revenue surged by 7% to 28.6 billion rand, with trading profit and headline earnings also showing significant growth. To capitalize on upcoming opportunities like the World Cup and the festive season, MultiChoice Group made strategic investments in subsidizing decoders, utilizing a substantial portion of its free cash flows. Mawela emphasized the importance of content and local talent investments in driving growth, highlighting a robust content lineup for the second half of the year, including sporting events like cricket and reality shows like Big Brother Titans. Despite economic challenges impacting consumer spending, MultiChoice remains optimistic about retaining its customer base. Mawela noted that during tough times, entertainment services like pay-TV often become preferred options for families looking to cut expenses. The company's focus on operational efficiency led to substantial cost savings in the first half, with further improvements expected throughout the year. The company's commitment to local content production has been a key differentiator, with a significant portion of its general entertainment spend allocated to local programming. MultiChoice's strategy of catering to African audiences' preferences for localized content has paid dividends, driving viewer engagement and loyalty. Addressing liquidity challenges in key markets like Nigeria, Mawela expressed confidence in the company's ability to navigate economic uncertainties and capitalize on growth opportunities. Despite currency fluctuations and cash extraction issues, the company remains focused on delivering quality content to attract and retain customers. Regarding the foray into sports betting through investments like King Makers, Mawela acknowledged the market's potential and the synergies with the company's sports content offerings. Despite initial losses attributed to expansion efforts, MultiChoice sees sports betting as a lucrative opportunity, aligning with viewers' interests in sports entertainment. In conclusion, MultiChoice Group's performance reflects a resilient business model that leverages strategic investments in content, technology, and market opportunities. With a solid subscriber growth trajectory and a diverse content portfolio, the company remains well-positioned to navigate evolving market dynamics and drive long-term value for stakeholders.