MultiChoice Chief Says Canal+ Deal Will Help it Take on Netflix
MultiChoice Chief Executive Officer Calvo Mawela is preparing to take on US streaming giants as the African TV company works to get its approximately $3 billion deal with Vivendi SE’s Canal+ over the line with regulators.
“A combination gives us a better chance to compete against the global giants,” Mawela said in an interview with Bloomberg TV. “Scale matters in this industry, then you are able to negotiate better rates for content and you are able to generate more revenues, especially with one party operating in French-speaking Africa and one in the English speaking part of Africa.”
The company has been losing subscribers and struggling with currency depreciation across many of its markets, especially Nigeria, that’s hitting profits and customers’ spending power. A deal with France’s Canal+ would help scale a combined entity to better compete for content and technology needed when going up against dominant platforms like Netflix Inc. and Amazon.com Inc., Mawela said.
While the companies have been in talks with regulators in South Africa, where local ownership rules may prove to be a serious regulatory hurdle to the deal, the French broadcaster has continued to slowly up its stake in MultiChoice.
“We put something together that should be acceptable for the regulators, and engagements are ongoing,” he said. “We believe it’s a good story for Africa.”
Africa has a young and fast-growing population that’s an attractive market for streamers, although the continent also struggles with uneven internet access, low incomes and currency volatility. A combination of Canal+ and MultiChoice would create a group with nearly 50 million subscribers and the resources to invest more in local content and sports.
Multichoice is already working with Canal+ on new productions and the South African company, known for its sports content, is providing its partner with access to English Premier League football matches, said Mawela. The company hopes to boost its sales to $1 billion from its Showmax service in the next five years, he said.
French billionaire Vincent Bolloré’s Vivendi is the a process of breaking up his sprawling media and entertainment empire, and Canal+ is actively preparing its own listing in London. The newly spun-off company may also have a secondary listing in Johannesburg.
