Multichoice recorded 22% growth in subscribers revenue in Nigeria, expects new bouquets and 1H FY2020 migration to drive further growth. When the shares of Multichoice Group jumped by 8.5% to 102.62 Rand on Wednesday at the Johannesburg Stock Exchange, South Africa, a lot of observers were shocked by the news, as it has not recorded such feat in four months.
The development, some observers said it could be attributed to the 2020 full year result of the group, which was released on Wednesday. The Pay-Tv announced a 5% growth in its subscribers base when it rose to 19.5 million. While it recorded a revenue growth of 3% to close at R51.4 billion, its core headline earnings was up by 38%. No wonder, it could afford to pay a dividend of R2.5 billion (N57.9 billion) to its shareholders.
Other observers argue that the development could also be attributed to the news the group broke in the financial report. The group stated that it had signed a deal with Netflix Inc. and Amazon.com, its US rivals to offer their streaming services through it’s new decoder. This move, no doubt, would help Africa’s largest Pay-TV firm retain teeming subscribers and attract potential viewers.
The deal was disclosed in MultiChoice’s results presentation, tagged ‘Improve Retention’ shared on its site and seen by Nairametrics. This could indicate ‘If you can’t beat them, join them’ move, as the duo rivals have been giving Multichoice a run for its money, creating greater competition, offering cheaper and faster internet speeds, which enabled them to stamp their feet on the continent.
How would Multichoice benefit from the deal?
While observers await Multichoice’s announcement on how the move could affect it’s monthly fee probably in a few weeks, a top executive of the group explained that it is a win-win situation for the company. “What would typically happen is we would get commission on whatever revenue gets generated by customers coming from our platform,” Chief Financial Officer Tim Jacobs said in a phone interview, according to Bloomberg.