Comcast’s NBCUniversal and Sky are making moves in the African streaming market, teaming up with leading pay TV provider MultiChoice to form a new entity and launch an expanded streaming service across the latter’s 50-market footprint in sub-Saharan Africa.
Under the deal MultiChoice incorporated a new company Earth UK Holdings, that’s been registered in the UK and will trade as Showmax. MultiChoice will contribute its Showmax business – an existing streaming service in Africa that it launched in 2015 – for a 70% stake in the new entity, with NBCU holding the remaining 30% stake in exchange for a cash infusion. The amount of cash was not specified. Both MultiChoice and Comcast also committed to provide funds to the entity during the investment phase, in proportion to their respective share holdings.
Specifics on the service, such as launch date, programming lineups, how new existing Showmax subscribers can migrate to the new service, and pricing, haven’t yet been announced.
In addition to cash, Comcast is licensing its Peacock platform (which serves 20 million SVOD users in the U.S.) to power the Showmax streaming service, along with licensing international content from NBCUniversal, Universal Pictures, Peacock and Sky. MultiChoice said it will provide ongoing business support with local market expertise, local content production capabilities and its existing portfolio of general entertainment and sports rights, along with back-office support functions. On the content side MultiChoice will also provide its Showmax Originals and local content from the provider’s channels including Mzansi Magic, Africa Magic and Maisha Magic.
In describing the rationale for the deal, MultiChoice noted that Africa has been somewhat of a laggard in the direct-to-consumer streaming market, but that the region is nearing an inflection point in terms of broadband availability and affordability.
“While MultiChoice continues to invest in its linear pay-TV businesses to drive growth and increased penetration, it believes that this is an appropriate time to step up its ambition and investment in the subscription video-on-demand (SVOD)/over-the-top (OTT) segment,” the company stated.
As of September 30, 2022, MultiChoice had 22.1 million subscribers in Africa.
The company said it believes the deal provides an opportunity to utilize the best of both partners’ capabilities to deliver a differentiated SVOD, as it leverages Comcast’s technology and international content portfolio to scale, with the aim of becoming the leading streaming service in Africa.
In addition to a pipeline of international content licensed from NBCUniversal and Sky, the service will also combine MultiChoice’s accelerating investment in local content. That will be complemented by third-party content from HBO, Warner Brothers International, Sony and others, as well as English Premiere League soccer games.
In Africa, MultiChoice noted that the existing Showmax product has already delivered market innovations related to content downloads, adaptive bitrates and compression, along with support for low-end devices. It also noted that Showmax “is able to accept payments in more local currencies and from more payment platforms than any other streaming service across the continent.”
In addition to a stake in the African streaming market, the deal also marks another win for Comcast’s technology platform licensing ambitions.
In the video space Comcast and NBCUniversal have been building up various tech platforms and capabilities that it aims to license for different uses. That includes the streaming and TVOS platform that are being developed under a joint venture with Charter Communications in the U.S., which Comcast has said it’s very focused on licensing to smaller U.S. operators. Related to Peacock is NBCU’s commerce platform Checkout, which is being integrated into the SVOD as well as the Comcast pay TV X1 platform this year, as a way to deliver direct on-screen shoppable TV and generate new revenue.
Speaking to Fierce Video earlier this year, NBCU SVP of Commerce Partnerships Evan Moore noted that the Peacock integration is part of a broader strategy to license the commerce platform technology.
“We’re really starting to put our money where our mouth is and not just claim that we’re a tech company, but actually build technology that other partners are really excited to use,” Moore said in February of NBCU Checkout.
Although Thursday’s announcement didn’t mention any plans to use the NBCU commerce platform, leveraging Comcast technology isn’t new to MultiChoice, which itself was already announced as a customer of the Sky Glass smart TV platform last year.