Unpacking MultiChoice’s bet on local film and television

As MultiChoice looks to defend its place in Africa’s pay-TV market with local content, the group says such productions have proven to be profitable in its mix of offerings. 

Competition for SA eyeballs has been increasing over the past decade. An area traditionally dominated by MultiChoice has attracted growing investment from international players, using the power of the internet to appeal to local audiences.      

“The budget is always a balance and you’ll never get all the money you want. So you have to be very deliberate in the way you spend and what you expect the ROI [return on investment] to be,” Shirley Adonisi, M-Net director of local entertainment channels, said.

“There are some easy wins for us. For example, our movie channel Mzansi Bioscope. That is a very profitable channel with the least amount of investment. But it’s enough investment to commission the types of movies we want. We’re not looking for a Game of Thrones. We’re looking for very simple township local movies.”

Local content — film and television projects native to a specific country — have proved to be a lucrative way to gain subscribers. Growing piles of cash are being poured into local productions as operators fight for market share. 

Earlier in 2023, MultiChoice’s main rival for paid TV audiences, Netflix, said it spent more than R2bn on film and TV projects in SA from 2016-22.

For MultiChoice, the stakes are now higher as Netflix has been focusing its deep pockets on its own local productions such as Blood & Water, Queen Sono and How To Ruin Christmas. 

In June, the DStv operator said its local content library contains more than 76,000 hours, representing 50% of total general entertainment content spend for the year to end-March 2023. The group spent R20.9bn on content in the period.

The group did not say how much it is going to spend on content in the year, but the aggressive spending trend to stay ahead of rivals indicates it will spend as much, if not more.

“That’s also our avenue for industry development. It’s very important to give somebody a first chance. We give them that on Mzansi Wethu and Mzansi Bioscope because then it feeds [further].

“As you grow as a producer, you graduate, right … maybe you get a reality show, which is a little bit more money, then you get a drama, then a Sunday drama, then a telenovela … all of which are more money.”

When deciding on which productions to back, Adonisi says MultiChoice has a detailed strategy for finding the right shows and films, finding the right audience for content, and a plan for making back the money sunk into projects.

First, “where does this telenovela fit? Is it for a One Magic or Mzansi Magic? Once we’ve made that decision, then we know which slot we are going to put it in. Generally, what’s the expected ROI of that slot? Because essentially you want to be in a place where your content pays for itself.

“If you are going to risk and spend an exorbitant amount of money on a telenovela, you need to be sure that you’re going to get that money back somehow. Whether it’s through revenue or through windowing, because as each show windows down it continues to make money.”

Windowing is a concept used by the group for airing the same film and television shows across its various channels and platforms while making a return at each step.

Using an example, Adonisi says: “The River is on One Magic currently. It’s also on Mzansi Magic and Mzansi Wethu, the difference being the seasons. So even though it sits on three channels, it still makes money on the three channels, so at the end of its life cycle, however many years later, it’s paid for itself completely.”

In addition to its broadcast offering on DStv, MultiChoice is using local content as a way to make its online streaming platform Showmax more appealing to viewers.

As part of the multiplatform strategy, Showmax then becomes “an archive” for the group’s content, allowing a further opportunity to make money for content that is currently in production, or which has ended its broadcast run.

gavazam@businesslive.co.za