Don’t expect DStv miracles if Canal+ takeover succeeds

DStv customers hoping for big product revamps if Canal+’s acquisition of MultiChoice succeeds should curb their enthusiasm.

An independent board is currently considering the French broadcasting giant’s offer to acquire all of MultiChoice’s outstanding shares at R125 each, up from a previously declined offer of R105 per share.

Following its formal offer, Canal+ has continued buying shares in the company, holding a roughly 40.83% stake in MultiChoice as of today.

Its fierce buyout interest sparked a rally in MultiChoice’s share price, which has jumped from around R75 to over R116 (peaking at nearly R122) since Canal+’s initial offer.

Many DStv customers might be wondering if the takeover will have any impact on their services.

Swathes of the pay-TV broadcaster’s subscribers have complained about DStv’s annual price hikes and dwindling international content slate, which has been hammered by international companies launching their own streaming services locally.

Some might hope that Canal+ has some package restructuring plans in the pipeline or other plans to improve DStv’s content offering.

However, experienced broadcasting journalist and analyst Thinus Ferreira has told MyBroadband that the acquisition is unlikely to result in major content or product overhauls.

“The Canal+ takeover bid won’t really change anything for DStv subscribers on a fundamental level,” Ferreira said.

Ferreira said Canal+’s interest in MultiChoice and MultiChoice’s possible agreement to sell had nothing to do with improving the subscriber experience or content.

“It’s about money, not about content. It’s about shareholder value and shareholders wanting money,” Ferreira explained.

“If the buyout proceeds, it will be because MultiChoice investors can and will make money.”

Ferreira said that Canal+ has a “threatened and mature” consumer base in Europe and needs to expand into other territories to survive.

To achieve this, it either needs to grow organically or through acquisition. It has decided Africa is a region where it can add to its customer base.

MultiChoice’s growth has flatlined in South Africa in recent years but has seen significant gains in other African markets.

While Canal+ already has a foothold in francophone countries like Burkina Faso, Cameroon, and Cote d’Ivoire, MultiChoice has primarily flexed its muscles in anglophone countries, including Kenya, Ghana, and Nigeria.

Downsizing on the cards

Although Ferreira expects little change for subscribers, he anticipates the behind-the-scenes adjustments will impact MultiChoice employees.

“There will be retrenchments and downsizing at MultiChoice as the acquired company…[this] always happens with takeovers as part of ‘streamlining operational efficiencies’,” he explained.

Another implication will be that MultiChoice-commissioned and paid-for TV news channels like SABC News, eNCA, and Newzroom Afrika will belong to a French company.

Ferreira also dashed the hopes of those who believed the company might consider separating DStv’s SuperSport offering into a standalone or bolt-on product to make one of its biggest strengths more affordable.

“Canal+ won’t strip out sport from the existing package setup since it forms an integral part of the traditional pay-TV bundle,” Ferreira said.