Multichoice has signed a deal with Netflix and Amazon that will see it start streaming the services on its decoder. The move appears to be intended at helping the company retain its subscribers who have been exiting with the penetration of other streaming services.
MultiChoice which was spun out of Naspers Ltd in February of last year, has been battling competition from its US rivals after cheaper and faster internet speeds enabled them to grab a foothold on the continent. The Johannesburg-based company introduced its own streaming product, called Showmax, in 2015 and has offered cheaper deals on premium packages in a bid to shore up its customer base.
The company’s share price jumped on the news, gaining 8.5% to 102.62 rand at the close in Johannesburg, the highest in almost four months. Multichoice intends to make a commission on whatever revenue gets generated by customer who get on their platform.
The deal was revealed in the company’s annual results presentation for the year ended 31 March 2020, it said that it had entered into agreements with both Netflix and Amazon to integrate these services into its upcoming Explora device for South African customers. The expectation is that they will roll the same out to other African countries after successful trials in South Africa.
MultiChoice chief financial officer Tim Jacobs, had this to say, “We have signed distribution agreements with two major international subscription video-on-demand services. Unfortunately, we are in a pre-release embargo period with both of these international players, which means that other than announcing that we have these two distribution deals, we can’t talk about the specifics until the formal consumer release.”