Nearly a year after welding together MultiChoice and Canal+, creating a broadcaster with more than 22-million African subscribers, David Mignot, CEO of that African business, can reflect on the potholes the French broadcaster never saw coming.
“We knew the economics were tough, but one thing we did not expect was that the cost structure of MultiChoice was still set to increase for years to come,” he tells the FM. “We were surprised by the amplitude of that inflation which had been baked into the model, so that’s why we had to accelerate our plan to unlock €250m in synergies.”
Canal+ paid R55bn for MultiChoice in October 2025, as part of its grand strategy to reach 100-million subscribers across the globe, listing on the JSE too.
But once Canal+ looked inside the MultiChoice engine, it moved swiftly.
Showmax, the streaming service, was axed — a mercy kill when you consider it lost R4.9bn in the year to March 2025. Strict controls over spending were instituted, leading to grumbling in South Africa about whether Canal+’s promises of investing billions in local content were just hot air.
So, was it a lack of discipline in South Africa that Canal+ uncovered? Or was it naivety on the part of the French company?
Mignot is diplomatic, referring to expectations of spectacular growth when it comes to signing broadcast deals.
“This was not a failure of discipline or strategy. When you sign a contract, especially in sports, you believe in your ability to make the business grow,” he says. “Both Canal+ and MultiChoice believe in the growth story of Africa, so you can see where it comes from. But what you had were some contracts being structured to increase in costs over time.”
Showmax, he says, was premised on the belief that Africans were ditching satellite in favour of streaming services. And while this may be right over time, broadband access in Africa is still too sporadic, and the cost of building Showmax was too high for where it stands today.
“More than anything, it was probably a misjudgment of how ready the market was to absorb those costs,” he says.
Satellite television, Mignot says, will still be the dominant way in which entertainment is consumed in Africa for decades. “I’m an engineer, and if you think about it from an engineering perspective, satelitte looks like an old-fashioned technology but it’s fantastic technology — you can see what’s happening now with Starlink,” he says.
Asked how long satellite will dominate in Africa, Mignot says: “We’re talking decades.”
The cost cuts were painful, but the outcome was happily evident in Canal+’s half-year results to June. MultiChoice’s revenue for those six months dropped slightly to €1.18bn, but its adjusted pre-tax earnings rose to €143m from €55m last year.
This ended up boosting Canal+, as its revenue grew 40% to €4.3bn, while operating profit climbed 68% to €433m. That was flattered by the inclusion of MultiChoice, but strip out the South African unit, and earnings would still have grown 13%.
Mignot says Canal+ is employing a “volume strategy”, betting on growth in subscribers among Africa’s 1.6-billion people. But it is willing to keep costs low, and sacrifice profit, to achieve that growth — a high-risk route that Mignot argues is working.
“In June, more than 1-million families — African families — signed up physically. That’s not a download, that’s signing a contract where they put a set-top box in their home,” he says. “In South Africa, it’s been the best month of new sales for 10 years.”
Critics would argue this picture is skewed since this is a particularly favourable point in time — the World Cup soccer was a huge drawcard for pay-TV, for instance.
But Mignot says this view ignores what is happening in an average seven-person African home. “It’s a common belief that people sign up just for the sport. It happens not to be true,” he says.
Still, some analysts argue that fighting the likes of Netfix and Disney is a fool’s errand. Gary Booysen, a portfolio at Rand Swiss, is sceptical. “I’m not buying it now,” he says. “Profitability looks like it’s improving, but MultiChoice’s revenue declined, even with the World Cup tailwind. It’s a long road ahead in a very competitive market.”
Peter Takaendesa, chief investment officer of Mergence Investment Managers, says there are “encouraging early signs of stronger execution”, but it’s still difficult to assess what can be sustained and what will ultimately wash away. “Revenue is not yet moving in the right direction,” he says.
As it is, of the nine analysts who cover it, seven rate it a “buy”, with the share price expected, on average, to grow 32% from its current levels on the JSE.
