MultiChoice, now part of Canal+, has announced plans to discontinue its streaming platform Showmax following a strategic review of its operations. The decision, approved by the Showmax Board of Directors, marks a significant shift as the group seeks to refocus resources in an increasingly competitive and capital-intensive global streaming market.
The move reflects a broader effort by MultiChoice to streamline operations, enforce financial discipline and prioritise long-term investment in digital entertainment infrastructure.
Mounting losses behind the decision
According to the company, Showmax has been recording substantial annual losses, rendering its current model unsustainable. In a global streaming environment where platforms are investing heavily in content and technology, maintaining competitiveness requires deep and sustained capital commitments.
MultiChoice said retiring the platform forms part of a wider strategy to optimise capital allocation and ensure the group remains financially resilient amid rapid changes in the digital media landscape.
Despite the shutdown, the company stressed that no job losses are expected. Employees connected to Showmax will be supported through internal redeployments and other opportunities within the group.
The economics of streaming in Africa
When Canal+ described Showmax as “not a commercial success”, it signalled more than a corporate setback. The closure of Showmax highlights the deeper structural challenges facing subscription streaming platforms across Africa.
The issue is not simply that Showmax underperformed. Rather, it underscores a central reality: the conditions that enabled streaming giants such as Netflix, Amazon and Disney to thrive in developed markets do not easily translate to the African context.
Over the past decade, global streaming services have reshaped how audiences consume entertainment, relying on vast subscriber bases, reliable broadband infrastructure, and high average revenue per user (ARPU). Across much of Africa, however, gaps in internet access, price sensitivity, and fragmented payment systems present formidable barriers.
A costly expansion phase
Streaming remains an expensive enterprise worldwide. Platforms must continually invest in technology, licensing agreements, and original productions to attract and retain subscribers.
For MultiChoice, Showmax became a significant financial burden during its expansion. Billions of rand were invested to upgrade the platform’s technology, secure global content partnerships, and commission local originals. Yet financial returns failed to match the scale of spending.
Trading losses widened sharply, reaching R4.95 billion (approximately $265 million) in one financial year alone. Although subscriber numbers grew, revenue lagged behind expectations. At its peak in 2024, Showmax revenue stood at roughly $60 million — far below the $1 billion target once envisaged by executives.
The widening gap between expenditure and earnings ultimately proved unsustainable. However, the losses also reflected structural constraints within Africa’s digital economy.
Connectivity constraints
Reliable, high-speed broadband is essential for streaming video. Yet in many African markets, connectivity remains heavily dependent on mobile networks rather than fixed fibre infrastructure.
Industry estimates suggest that only around 4–5 per cent of electrified TV-owning households on the continent have access to fibre broadband. While smartphone adoption continues to rise, with roughly 600 million devices in circulation, mobile networks often struggle to support seamless long-form video streaming. Buffering, lower resolution and inconsistent connections remain common.
Data costs and affordability pressures
Even where internet access is available, data costs present another obstacle. Streaming an hour of high-definition video can consume between 1GB and 3GB of data. In many African economies, mobile data remains expensive relative to average income.
As a result, the cost of data can exceed the subscription fee itself. This creates a paradox: platforms may offer affordable monthly plans, but the total cost of streaming becomes prohibitive once data usage is factored in.
Fragmented payment systems
Recurring credit card payments — standard practice for global streaming services — are less viable in markets with limited banking penetration. Many consumers rely on prepaid mobile balances, bank transfers or mobile money wallets.
This fragmentation complicates recurring billing, increases payment failures and raises customer acquisition costs. Platforms must integrate multiple payment systems across different regulatory environments, increasing operational complexity and revenue uncertainty.
Low ARPU and intense competition
Low ARPU further constrains profitability. Subscription prices must remain affordable in markets with lower disposable incomes and widespread access to pirated content. In Nigeria, for example, Showmax mobile plans were priced between ₦1,200 and ₦3,200 per month — significantly lower than subscription fees in Europe or North America.
While such pricing can drive uptake, it limits margins and requires very high subscriber volumes to break even.
At the same time, Showmax faced fierce competition from global platforms with deep financial resources and expansive content libraries. Piracy also remains prevalent across several markets, offering consumers free access to films and television programmes.
Broader macroeconomic pressures, including currency depreciation and cost-of-living challenges, have further squeezed consumer spending. MultiChoice has reported declining subscriber numbers and falling ARPU in several territories.
A shift towards hybrid models
These structural challenges suggest that Africa’s digital entertainment future may diverge from the standalone subscription models seen in the United States and Europe.
Hybrid models, bundling streaming with telecom packages, pay-TV subscriptions or advertising-supported services, may prove more sustainable. In such ecosystems, streaming operates as an extension of a broader media offering rather than a self-contained business.
This strategic pivot aligns with Canal+’s emphasis on profitability and operational efficiency across MultiChoice’s wider pay-TV and content distribution operations.
Lessons from Showmax
The retirement of Showmax does not signal the end of streaming in Africa. Video consumption continues to grow, driven by rising smartphone adoption and demand for local content.
However, it illustrates a crucial lesson: the economics of streaming must align with local realities. Models built on cheap broadband, high subscription fees and seamless digital payments were designed for developed markets.
Until connectivity improves, data costs decline and payment infrastructure matures, streaming platforms in Africa will need to innovate beyond the conventional subscription model.
Showmax’s journey demonstrates that audience growth alone is not enough. Sustainable digital entertainment on the continent requires business models that reflect Africa’s distinct economic landscape.
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