On Friday, October 25, 2024, MultiChoice announced a significant investment of R6.9 billion ($390 million) in platform fees over the next seven years to Peacock, a subsidiary of Comcast’s NBCUniversal.
This partnership aims to improve its Showmax streaming platform, positioning it as Africa’s leading streaming service.
This investment was revealed in MultiChoice’s 2024 financial results and is part of a broader strategy to transform Showmax. While these platform fees are recorded as contingent liabilities, reports suggest the total could change based on future developments.
The agreement allows MultiChoice to utilize Peacock’s content streaming software and managed services, which are essential for delivering live sports and premium content.
The overhaul of Showmax follows a deal MultiChoice made in April 2023 with NBCUniversal and Sky, also part of Comcast. As part of that agreement, MultiChoice sold a 30% stake in Showmax to these companies. The revamped Showmax will now operate on Peacock’s infrastructure, a move designed to help it compete with major global streaming services.
Marc Jury, MultiChoice’s CEO, noted that partnering with Peacock allows Showmax to tap into extensive engineering resources. Although the company considered creating its own platform, it decided to collaborate with Peacock due to a lack of engineering talent and the need for scalable solutions.
MultiChoice anticipates that Showmax will play a crucial role in its future growth, especially in Africa, where local content and sports broadcasts are expected to enhance market penetration. With a combined investment of $284 million from NBCUniversal and MultiChoice, Showmax is aiming to meet ambitious revenue targets, forecasting it will reach $1 billion (R17.7 billion) in net revenue by 2028.
In the past financial year, Showmax generated R1 billion ($56.5 million), an increase from R820 million ($46.3 million) the previous year. MultiChoice aims for Showmax to break even by 2027, with a projected EBITDA margin of 25% and free cash flow margins of 20%.
To establish itself as Africa’s top streaming platform, Showmax plans to emphasize local content production while also featuring international programming. It has already launched a mobile-only Premier League football product, leveraging MultiChoice’s expertise in live sports broadcasting.
One of Peacock’s notable strengths is its ability to stream live sports at scale, which aligns perfectly with Showmax’s objectives. Peacock made headlines in the US by streaming the NFL Wild Card game in January 2024, attracting nearly 28 million viewers. MultiChoice believes that with Peacock’s technology, Showmax will be able to offer top-tier sports content to users throughout Africa.
