The Showmax Closure Is Just An Illustration Of What's Wrong With The Industry

During the year, MultiChoice decided to shut down its struggling Showmax streaming service after ramping up billions in loses. This comes two years after the company revamped the streamer alongside Comcast's NBCUniversal and Sky Group.

For years, MultiChoice has been trying to make Showmax "the Netflix for Africa" by ramping up local content for the streamer which includes Blood Psalms, The Girl From St. Agnes and Red Ink.

By partnering up with NBCUniversal, Showmax was able to compete with Stranger Things, Squid Games and Bojack Horseman on Netflix. This was due to the funnel of content coming from Universal Pictures, DreamWorks Animation and Telemundo.

Now most of that is set to be consolidated under DStv Stream and overtime on the Canal+ app.

To put it in simple terms, the closure of Showmax doesn't mean that Canal+ will double down on local spending to make up for the loss of Showmax. It's what you had with your M-Net Edge and M-Net alongside Disney XD and Disney Channel.

Although Canal+ can't retrench anyone that was contracted with Showmax, they're less likely to recruit more talent. The plan would be to let whatever makes up Showmax run its course until there's no use for it anymore.

The problem here isn't that Showmax is shutting down but the fact is the number of outlets local suppliers and talent would turn to is being reduced.

Amazon Prime Video served as another Showmax rival commissioning first run shows in the African market. Now these investments have gone to Europe and the US, although there's still local content it's mostly finished and not from scratch.

Netflix is probably in much better position compared to Amazon Prime Video as there's still some local investment. But the problem here is that it's mainly unscripted/reality TV and the streamer has adapted to a quality over quantity approach in Africa.

There's been calls for SABC and eMedia Investments to save the day but even they can't replicate or recover those hours used by Netflix, Amazon Prime Video or Showmax.

SABC has been going through financial constraints for years and last month their cash balance plummeted to 85% leaving them with 59 million. The National Treasury denied them a bailout of R4.9 billion to help in covering these expenses.

eMedia Investments managed to increase its profits by 18% but they did that through cost optimisation or in simple terms spending less. 

To sum it up, Amazon has stopped funding new productions while Netflix is being picky and the only brand that was pulling out the big guns (Showmax) is shutting down. SABC doesn't have any money while eMedia Investments is playing it safe.

The streaming climate in the whole of Africa is going through drought.

Even if the government were to impose new laws over ownership fact is Showmax ain't coming back and the damage had already been done. 

The government had proposed putting up local quotas on a streamer like Netflix and they could as well take a page from Amazon Prime Video. While others like Disney could follow NBCUniversal and form alliances to avoid compliance.