The Rugby World Cup 2023 Shows That Multichoice Needs To Rethink Its Business Model In Africa For Live Sports Content.
Yesterday evening I lamented about the fact that the currently ongoing Rugby World Cup (RWC) would NOT be carried on ShowMax as was the case in 2019. I think that this is a huge miss given that ShowMax is probably thriving based on the fact that a good number of subscribers are probably there for live sports and more specifically for the English Premier League, as I am.
That being said, I am surprised to learn that even in South Africa where the SABC is the national broadcaster they will only broadcast 16 games given their formidable Springboks national team is competing at the RWC 2023 and are also the incumbent champions.
Something is very wrong with this picture as it seems Multichoice is pulling all the stops to get customers to sign up for their premium subscription bouquets which are largely out of the reach of most consumers in Africa. I totally get it though given that having the broadcasting rights for the RWC in most of Africa must come at a massive financial investment.
Meanwhile, as I learned quite loudly online yesterday, the majority of consumers in Kenya and Africa are using VPNs and IPTV streaming propositions that are probably illegal to get their live sports fix including the RWC affordably. This is ultimately money that Multichoice should be making if they had more affordable and comprehensive offerings.
That being said, there is something called the trickle-up effect where rather than having fewer customers paying a high premium for a product or service you could have many consumers paying much smaller amounts. The net effect of this approach is more revenue in the long term.
This is what made Kenya’s sports betting industry blow up as you could have 3M customers paying Kes. 100 to bet on football games every day which translates to Kes. 300M in daily collections – this is a staggering amount of money in the context of Africa.
Taken a step further, rather than having a bundled monthly subscription, consumers could have a ‘pay as you go’ model for only the games they want to watch. As I recall, once upon a time in Kenya, this was offered by Safaricom and Multichoice for the EPL games using M-Pesa for payments but it was dropped at some point, probably prematurely.
In a nutshell, the market has spoken and change is needed. Lower the prices, make live sports affordable at scale, and watch the cash till go bonkers! It’s possible even at the risk of cannibalizing a business model that has served Multichoice well for decades. Change is scary but necessary in this instance as it seems inevitable as things stand.