Canal+, the new owner of MultiChoice Group, has ambitious plans for pay-TV and wants to be in half the households in South Africa and the other African countries in which it operates.
After two years, the French entertainment giant this week took full control of Africa's biggest pay-TV operator in a deal valued at R55bn that will create an entertainment company with enough resources and scale to compete with the US giants that now dominate the global video content market.
Canal+ wants to have half of all households in South Africa and the continent — where broadband penetration is still low — connected to its direct-to-home satellite service.
“We are not chasing subscribers. What we want in all and every place where you find electricity [is to] have penetration of at least 50%. We want one house in two to have a Canal+ bouquet subscription. In some towns, we have 80% of households with a subscription to Canal+,” said David Mignot, CEO of Canal+ Africa.
Mignot said the company will do “whatever it takes to reach 50%”. To achieve that, the content and pricing would have to be right, he told Business Times.
The plan is to reverse the declining customer trends at MultiChoice, which has lost 3-million subscribers in South Africa and the rest of the continent in the past two years alone, due to households cutting down on discretionary spending and intense competition from streaming services.
We will have the ability to use the strengths of the two groups … So customers can expect all that is available at Canal+. We have the biggest library of European content, but including a lot of American content … like 9,000 movies. Customers can expect that we will combine this catalogue
— David Mignot, CEO of Canal+ Africa.
“It's a story of growth," Mignot said. "MultiChoice content is incredible. We will have the ability to use the strengths of the two groups … So customers can expect all that is available at Canal+. We have the biggest library of European content, but including a lot of American content … like 9,000 movies. Customers can expect that we will combine this catalogue.”
He said Canal+ produces 4,000 hours of African content annually in up to 15 languages, while that of MultiChoice is about 6,000. “Combined, we will roughly provide 10,000 [hours] per year in 20 to 25 languages. So, in a 10- to 15-year period, we are building up a catalogue of more than 100,000 to 150,000, and then we will be able to make that content travel."
"We are going to be ending with a catalog of content that we will be able to provide to a larger audience, doing some dubbing, rescripting, and that's a fantastic competitive advantage.”
MultiChoice has been under pressure in recent years as consumers have dumped pricier pay-TV subscriptions in favour of cheaper streaming platforms like Netflix, which has been investing in local content production.
Mignot said the whole rationale of the merger is to be at scale on content, continuing with investment in sports and general entertainment content, “because this is how you differentiate”.
The combined group will serve more than 40-million subscribers across close to 70 countries in Africa, Europe and Asia, supported by a workforce of about 17,000. Mignot said the goal was to attract between 50-million and 100-million subscribers, especially targeting Europe, Asia and Africa.
He did not go into detail about the growth plan, saying that before taking full control this week Canal+ had “zero privileged information” and began with due diligence, which he described as “opening the engine”.
Peter Takaendesa, chief investment officer at Mergence, said the combined Canal+ Africa business will have better scale in content and equipment procurement, which are among the key cost lines for pay-TV businesses. They will also be able to extract other synergies over time from shared services and technology platforms, he said.
“The macroeconomic cycle is also much better now in Africa as economies recover from sharp currency devaluations over the past few years and related high inflation that were difficult to pass through to consumers.
"The change in executives also suggests that Canal+ believes it can improve execution on their growth and profitability strategies. Time will tell if the new controlling shareholder will be able to leverage the strengths of the combined entity to navigate secular industry headwinds as well as other known key risks of operating in this continent,” he said.
Mignot acknowledged they were facing “gigantic competitors”.
Its Showmax streaming unit, which it co-owns with rivals Comcast NBCUniversal — which has a 30% stake — has lagged behind its initial growth targets but still delivered healthy 44% growth in active paying subscribers in the year to March. Showmax gained market share in the regional streaming market, MultiChoice said in June, adding that it had invested just more than $70m (R1.2bn) about 18 months ago in start-up costs.
Canal+ chair Maxime Saada has previously questioned MultiChoice’s decision to partner with the US broadcaster, saying it probably meant it did not believe it had enough to scale on its own.
Business Times understands that there is a push to either shut down or dispose of Showmax, but a final decision is complicated by the Comcast NBCUniversal stake in the service. It is believed the new owners of MultiChoice would prefer to invest in and expand DStv Stream, the pay channel's main streaming service, which has live-TV capabilities.
Asked for his views on Showmax and the Comcast deal, Mignot said “not much information has been provided".
"We don't know the contract with Comcast. We don't know the financial terms, we don't know the numbers. I don't know the number of subscribers to Showmax. There have been some disclosures such as the yearly increase, and so on. But I can't tell you how many subscribers. I don't know the turnover, and I don't know the losses.”
Mignot said Canal+ was reviewing the viability of keeping three OTT platforms — Showmax, DStv Stream and its own streaming service.
While the “goal is good” given the shift to OTT platforms on the back of the increasing adoption of broadband internet, “we will have to assess if we want to keep three technology stacks inside the group with a cost of X. Probably we will have to converge somewhere or another."
Mignot said that should Showmax be a fantastic success, "we are very pragmatic and agnostic people, and we will assess accordingly".
"My motto is keep it simple and smart. We want to offer simple technology and payment processes. I don't believe we will be managing three technologies at the same time for this OTT race while competing with gigantic companies which are focusing on one technology."
Takaendesa said it was not a surprise that Canal+ had decided to review and potentially terminate the Showmax deal as it aligns MultiChoice’s technology platforms and operating procedures with its own.
“The Comcast partnership was a strange one anyway, given Canal+ was already in the picture, and the Showmax relaunch has been a very expensive project for MultiChoice, especially at a time when African currencies were going through sharp devaluations. Showmax made a trading loss of almost R5bn in the 12 months ended March 2025 alone. It therefore makes sense for Canal+ to review the current partnerships and see if it's possible to materially reduce technology and content costs.”
Mignot said the company will also assess other adjacent businesses, including betting and payment platforms.
Mignot replaced Calvo Mawela, who has been appointed chairman of Canal+Africa. To circumvent South Africa’s local ownership rules for broadcasters, MultiChoice South Africa was broken up, with the combined group taking a 49% stake in LicenseCo, the entity that now holds the local broadcast licence, but with only 20% voting rights as per broadcasting regulations.
Sonja de Bruyn Sebotsa and her company Identity Partners Itai, and Sipho Maseko’s Afrifund have taken a stake in LicenseCo, the vehicle that is the main contractor to MultiChoice’s 7.6-million subscribers in the country.
Phuthuma Nathi, MultiChoice’s black economic empowerment scheme, holds 27% of this entity, and a workers' trust has been given a smaller share.
However, the new combined group retains a 75% direct interest in MultiChoice South Africa, which includes local operations and the betting and payment platforms. The remaining 25% is held by Phuthuma Nathi.
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