How much Multichoice makes off every subscriber each month
Multichoice Group (MCG) has published its full-year results for the year ended March 2023, reporting a lower level of subscriber activity.
In its consolidated financial statement for the year, the group reported a headline loss of R2.9 billion, largely due to currency exchange losses brought by the much weaker rand.
Its pay-TV operations in South Africa also took a significant knock, it said, with the prevailing economy and load shedding keeping pressure on households.
As a result, the group noted a changing mix of subscribers as they continued to downscale or cut packages, resulting in a monthly average revenue per user (ARPU) declining 5% from R269 to R256.
The declines in ARPU were seen across the different market groups, with the premium, mid-market and mass-market bases all slipping.
ARPU was boosted by annual price hikes, Multichoice noted, but it is still losing subscribers in the premium and mid-market segment into the mass market, while daily active use is also slipping.
Multichoice said: “Total revenue of R35 billion, down 2% year-on-year, was affected by a 3% decline in subscription revenues, partially offset by an R200 million increase in other revenue mainly due to growth in insurance premiums.”
“Trading profit of R8.5 billion resulted in a trading margin of 24.2%, within the 23% – 28% guided range,” said Multichoice.
When looking at the company’s 90-day active subscribers, there was an 8% increase in the number of subscribers from 21.8 million to 23.5 million in 2023.
The largest increase was seen in the ‘Rest of Africa’ segment, which made up 14.2 million of the 23.5 million, while the South African subscriber base decreased by 3% from the year prior to 9.3 million.
Overall subscription revenue was held up by positive performance in the “rest of Africa” category, while South Africans chose to opt out of the company’s services.
According to Multichoice, subscriber revenue totalled R48.6 billion in the recorded period, up 7% from R45.3 billion in the previous year.
The group reported that regarding subscriber performance in South Africa, there was a decline in activity rates due to weak macroeconomic factors and load shedding, while the continued shift in customer mix trended towards the mass market.
“The South African consumer environment weakened sharply, especially in the second half of the financial year. Permanent high stages of load shedding, interest rate hikes and elevated inflation levels have left a large portion of the group’s customer base unable to watch or afford video entertainment services,” reported the entertainment company.
In the Rest of Africa, there was a 16% organic growth in subscription revenues driven by 11% growth in subscribers, price increases and a broadly stable subscriber mix.
The strong performance in the rest of Africa, according to Multichoice, was underpinned by the decoder subsidy and marketing investments from the Fifa World Cup.
The table below outlines the key performance indicators of Multichoice for the year ended 2023:
Loading ...
