Canal+ Bets on Satellite TV to Dominate African Media Landscape, Fending Off Netflix
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Despite the global surge in streaming, French media giant canal+ is doubling down on traditional satellite television to capture the African market, a strategy solidified by its recent $2.9 billion acquisition of MultiChoice, Africa’s largest pay-TV company. The move signals a belief that reliable internet access remains a significant barrier to streaming adoption across much of the continent.
“Everybody is a subscriber,” explains Bongi Mahlangu, a local resident and cleaner, who relies on the service to keep her children safe and entertained. “I will never not have it. It keeps my two children off the streets after school. Then at the end of the day, it helps me relax.” This sentiment underscores the crucial role satellite TV plays in providing entertainment and security in communities where alternative options are limited.
While US streaming services have disrupted television markets worldwide, their impact in Africa has been muted by inconsistent internet connectivity. Satellite TV currently boasts unmatched reach, notably among lower-income households facing high data costs and unreliable broadband.
Canal+’s Strategic Acquisition of MultiChoice
Canal+’s acquisition of MultiChoice is a bold move to establish itself as a leading global media company capable of competing with streaming giants like Netflix. Maxime Saada, chief executive of Canal+, expressed confidence that economic growth and improved electricity access will drive subscriber growth. “Satellite enables you to reach 100 per cent of the population [in Africa],” Saada told the Financial Times last month.
The deal, which involved a 66% premium on MultiChoice’s share price, adds 14.5 million subscribers to Canal+’s existing base of almost 27 million across 52 countries. Crucially, it also grants Canal+ access to MultiChoice’s valuable broadcast rights for major sporting events like the English Premier League, the champions League, and Formula 1 – a key differentiator against US-based streaming platforms. Canal+ also intends to expand its offerings of African-language programming, recognizing the demand for locally produced content.
Despite the optimistic outlook, challenges remain. MultiChoice has recently experienced a decline in South African subscribers, with an 8% drop over the past year to 7 million, attributed to economic pressures and rising prices. However, Saada remains focused on Africa’s long-term demographic trends, forecasting a population increase to 2 billion by 2050 from 1.2 billion today.
The company is also exploring further expansion into the streaming space, with reports indicating canal+ is considering acquiring the remaining 30% stake in Showmax, Africa’s largest streaming platform, from Comcast. However, Saada acknowledges that the limitations of broadband infrastructure in Africa will continue to favor satellite delivery for the foreseeable future. “[Streaming services] will not set up satellite operations, it’s just not in their capability,” he stated. “So they have to wait until broadband penetrates [further] and meanwhile we can deliver.”
A Risky Bet or a Calculated Gamble?
Not all observers are convinced by Canal+’s strategy. One analyst cautioned that “doubling down on satellite in a world where streaming is everything is a risky strategy,” adding that a decade of investment in Africa has yielded limited returns for many companies. The analyst further noted that capitalizing on Africa’s growth potential has proven tough for foreign investors.
Despite thes concerns, Canal+ executives beleive the MultiChoice deal will provide clarity for investors and position the company for sustained growth. The company’s valuation on the London stock market currently stands at £2.4 billion, significantly lower than initial analyst expectations.
Ultimately, Canal+’s success will depend on its ability to navigate the complex African media landscape, capitalize on the continent’s demographic trends, and deliver compelling content that resonates with local audiences. As Saada emphasized, “The greatest stories that haven’t been told are from Africa,” and Canal+ is betting that it now has the resources to tell them.
