Outrage as Multichoice increases subscription fees again

There was outrage on social media after Multichoice Uganda subscribers learnt that the service provider had hiked its premium content’s pricing  for DStv and GOtv once again as it struggles to balance its costs with the fast-shrinking market.

The price increments average 3 percent across most of its content packages. Notifications regarding the service provider’s decision to raise package prices beginning in October have already been sent to its customers.

Sports fans who adore the Compact Plus plan—which costs Shs170,000 and includes the Champions League, UFC, and NBA along with a healthy dose of documentaries, foreign shows, and movies—were informed that the price will increase to Shs175,000.
This also had an impact on the company’s highest-tier package, called Premium, which has over 170 channels—40 of which are in High Definition (HD)—and a plethora of entertainment content, including award-winning series, all sports events, and the newest films. 

Subscribers to this package, who also get Showmax streaming for free, saw this package go up as well from its current Shs290, 000 to Shs300, 000.
The cost of the GOtv packaging (the cheaper alternative from the company) was affected as well, with the Supa subscription—which was previously priced at Shs69,000—going up to Shs71,000 on October 1.
These price hikes follow those that happened in April, and there were hikes in prices earlier last year.

Many customers have, as usual, expressed doubts about the company’s continued price increases and whether it is still worthwhile to subscribe to the service in light of the price increase. 
Some have gone so far as to threaten to quit and have asked regulators, such as the Uganda Communications Commission, to intervene.

However, the company does not appear to have any other options at this time as subscribers are leaving, and the cost of producing its content is rising as competition from other streaming services like Netflix heats up.

When this publication brought up the issue of price increases to Multichoice, the company that owns these pay TV service providers, in August, the company replied that it was facing a wolf of competition that is spreading and that it must also adapt to the same space, which comes at a cost. 

“MultiChoice understands that affordability is a key concern for consumers and acknowledges this by offering a range of packages at various price points, from as low as Shs15,000 on GOtv Lite and Shs16,000 on DStv Lumba, all catering to different budgets, content preferences and access to variety,” said Rinaldi Jamugisa, MultiChoice Uganda’s communications manager in an e-mail response.

 “However, it is important to understand that producing and acquiring high-quality content comes at a significant cost. Heavy investment is made in producing original content, delivering exclusive shows, broadcasting live sports or events, and international programming, which contributes to our overall costs, among other drivers of price adjustments like economic conditions that we may not have full control over,” he added.
The company says that while its packages are competitively priced, it emphasizes the value they offer, including unique features like live sports, exclusive local, kids and international content, and streaming capabilities via the DStv Stream, GOtv Stream and Showmax apps.

Given these indications, one would have feared that the business might close in the near to medium future. According to the parent company’s financial statements from the previous year, if it had to pay off all of its debts at once, it would theoretically be bankrupt.

The company’s financial statements show that its 2023 liabilities raked Shs9.1 trillion ($2.46 billion) exceeding its assets that were valued at Shs8.92 trillion ($2.41 billion).
Multichoice is greatly grappling with foreign exchange woes in many of the markets it operates like Nigeria, Angola, Kenya, and Zambia, which were even alluded to by the company in its 2023 annual report.

But the company is banking on its investments in its new streaming platform – Showmax 2.0, which has taken time to offset. Its revenues are on a rise but its losses are also high ($141 million in 2023). The company expects Showmax to breakeven in 2027.
And this is its lifeline. Currently it makes revenues averaging $53 million (Shs195.6 billion) but its executives are banking on a figure that doesn’t go below $1 billion (Shs3.7 trillion) per annum.

Showmax, MultiChoice’s bold new venture, taps into global content trends, mirroring the moves of giants like Netflix. Its deep dive into African storytelling has sparked the interest of major investors, with French media powerhouse Canal+ eyeing a full takeover, seduced by its potential.
The French media giant wants to give Multichoice’s shareholders R125 (Shs25, 859) per share, which MultiChoice board accepted. That’s a windfall. 

The company’s share price has long languished averagely at R80 (Shs16,549) until February when that appetite came up that excited shareholders to acquire more shares, something that shored up its share price to average R110 (Shs22,756).
Many industry experts believe that Multichoice’s merger with Canal + could reduce costs by streamlining technology spending, content production, and acquisitions.

Together, the merged company will have 50 million subscribers (30 million in Africa) – making it the biggest entertainment company in the world that is not American,” she says.
Canal+ chairman and chief executive officer Maxime Saada thinks that the merged entity can become one of the top-five largest entertainment groups in the world, alongside Netflix, Amazon Prime Video and Disney+.