MultiChoice Group, Africa’s largest subscription entertainment company, has experienced a significant decline in profits, plunging over 200% according to its annual financial results. The company reported a loss of R2.9 billion ($155 million), a sharp contrast to the R2.8 billion ($150 million) profit recorded in the previous financial year.

Analysts attribute this profit decline to multiple factors, with one of the primary causes being the rising prominence of video streaming services in Africa. The influx of platforms like Netflix and Disney+ has posed a challenge to MultiChoice, leading to a loss of customers. As early as 2021, the company had expressed concerns about Netflix’s potential impact on its relevance.

In addition to the competition from streaming platforms, MultiChoice pointed to other contributing factors such as the weak rand and South Africa’s persistent energy crisis. The country has been grappling with intermittent power cuts known as loadshedding, which has adversely affected businesses across various industries. MultiChoice stated that during stage 4 and above loadshedding, there was a noticeable increase in customer churn, even among those with disposable income. Customers became more selective in their subscriptions to avoid excessive loadshedding periods.

Loadshedding has emerged as a recurring obstacle for South African companies, leading to dire financial performances. It has forced businesses to grapple with operational challenges, affecting their ability to generate revenue and meet customer demands.

While MultiChoice continues to face challenges amidst the rise of streaming services, the company says it remains committed to exploring new avenues and adapting its business model to remain relevant in the ever-changing media industry. With ongoing investments and strategic partnerships, MultiChoice aims to strengthen its position in the market and regain its profitability in the future.