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Multiple choices for MultiChoice after Naspers' unbundling or way of the dinosaur?

#Newswatch: It's not necessarily a death knell. There's speculation on potential positive outcomes following Naspers's announcement that it will unbundle MultiChoice to shareholders early next year and separately list the company on the JSE.

By Leigh Andrews

19 Sep 2018

Multiple choices for MultiChoice after Naspers' unbundling or way of the dinosaur?

In an initial report on Business Day, It was said that investors cheered Naspers’ decision to unbundle video entertainment business MultiChoice onto the JSE in the first half of 2019 and hand its interest in the DStv operator to its shareholders.

But the bulk of those cheerers are Naspers’ investors, not those keen to invest in MultiChoice. According to Fin24, “African pay-TV heavyweight” the new MultiChoice Group faces an uncertain future as a newly listed company, as many say the traditional TV model is going the way of the dinosaur. This despite:

Estimated valuations by analysts and investors have ranged from $5bn to $6.6bn - plus the potential for dividends – compared with zero as part of the wider Naspers empire.

CEO Bob Van Dijk is also quoted in Business Day as saying: “I feel confident about putting the business on its own legs.”

Way of the dinosaur or time to play Catch Up?

TechCentral adds that MultiChoice is confident of arresting the DStv Premium customer decline.

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MultiChoice has taken note of criticism over its high monthly subscription fee and put plans in place to offer lower-tier packages.

It’s also set to keep with the times and improve its content offering to Premium subscribers through ShowMax, which is available free of charge to Premium subscribers; as well as offerings like online streaming platform DStv Now, covering live channels and Catch Up content.

Adding Showmax to DStv Compact or Compact Plus: Your payment FAQs answered

Showmax 12 Mar 2018

Some sentiment on social media is hopeful:

Naspers jumps out of the red today with the announcement of listing and unbundling of video entertainment that will trade as Multichoice Group. pic.twitter.com/8YPjpRSoFN
— Ian Stiglingh (@ianstig) September 17, 2018

Smart move by Naspers to list Multichoice. Spotlight on Multichoice likely to results in cost cuts, hopefully leading to price reductions. https://t.co/tKJ5w7JoYT
— Michael Jordaan (@MichaelJordaan) September 17, 2018

"Something we are particularly proud about is that it is a fantastic transaction for our Phuthuma Nathi shareholders"- Imtiaz Patel, CEO of Naspers's video entertainment unit https://t.co/jN1JPDsoPQ
— 702 (@Radio702) September 18, 2018

This is big. Naspers believes Multichoice's future is over and will unbundle it. Multichoice will list on the JSE.

This is an opportunity for Calvo Mawela to prove doubters wrong and turn the company around. pic.twitter.com/C92xXweMDR
— Welile 'Wellington' G (@WelsWG) September 17, 2018

So, will investors and subscribers alike benefit from the outcome? Only time will tell…

Naspers to unbundle and list MultiChoice:Business Day
Set free by Naspers, MultiChoice plots its path: Fin24
MultiChoice confident of arresting DStv Premium decline: TechCentral

Leigh Andrews

About Leigh Andrews

Leigh Andrews AKA the #MilkshakeQueen, is former Editor-in-Chief: Marketing & Media at Bizcommunity.com, with a passion for issues of inclusion, belonging, and of course, gourmet food and drinks! Now follow her travel adventures on YouTube @MidlifeMeander.