Skip to main content

How our activities enriched our stakeholders



VALUE CREATED FOR OUR SUPPLIERS

ZAR10.4bn

spent on local South African suppliers

ZAR4.9bn

spent on South African small and medium enterprises

ZAR1.9bn

spent on South African suppliers who are at least 30% women-owned



Delivering value to our suppliers

As an aggregator and distributor of video entertainment content, we partner with multiple suppliers across many aspects/facets of our business.

Content is the most important input into our value chain and includes packaged third-party channels, third-party content we package in our own channels, third-party feeds we overlay with our own in-studio productions, as well as locally produced content we commission and own. As a consumer-facing business, we ultimately help general entertainment and sporting rights owners reach millions of customers, which is a critical step in their brand-building process.

We work with industry participants in all of our largest markets to deliver compelling local language content and channels, notably South Africa, Nigeria, Kenya, Zambia, Tanzania, Uganda, Angola and Mozambique. Partnerships with various local sport leagues such as the PSL in South Africa and the Super League in Zambia are important to the success of these leagues.

It is imperative that we distribute content to our customers, which makes third-party signal transmission via leased satellites and other supporting infrastructure a critical part of our core traditional linear pay-TV services. Other content delivery networks and telecommunications partners are increasingly important in a growing online media environment. Third parties supply the components and assemble our set-top boxes, agents help us sell and install our set-top boxes and satellite dishes, and we solve the challenges of accepting payments from a diverse customer base with the help of third-party platforms. We also rely on more typical enterprise services and consultants across the legal, accounting, regulatory and IT fields.

The entertainment industry operates as an interconnected network, with all players facing many of the same risks. In this context, we prefer to adopt a partnership mind-set, seeking to support our suppliers as far as possible while balancing our other competing stakeholder needs.

Given our focus on returning our Rest of Africa business to profitability, adapting to the shifting technological and competitive landscape and driving efficiencies and cost controls, we ultimately have to ensure the economics of our contractual relationships support the prices we pay. Therefore, we take a firm but fair approach to engaging with our suppliers, bearing in mind we have mutually beneficial relationships with many of them.

In terms of our largest categories of spend, in the past financial year, we spent ZAR18.8bn on content, ZAR2.6bn on transponders and ZAR4.9bn on set-top box purchases.

We have numerous enterprise development initiatives and procurement programmes across our footprint, aimed at fostering and supporting local, new and previously disadvantaged business owners in the film, TV, media and information and communication technology (ICT) industries. We provide funding, mentorship and skills development for start-ups and established companies seeking to scale.

In South Africa, for example, our preferential procurement programme supports the development of SMMEs. The group's preferential procurement spend was ZAR10.4bn in the period, of which 80% was with BBBEE compliant suppliers, some 47% was directed at SMMEs, and 18% went to suppliers with at least 30% black women ownership.

In addition, we support six community TV stations in South Africa through enterprise development initiatives. These include providing sublicence broadcasting rights (valued at ZAR360m) to the SuperSport Rugby Challenge and MultiChoice Diski Challenge.

MultiChoice has a network of 1 197 accredited installers across South Africa, employing 2 924 trained technicians. In addition, we have 110 independent service providers contracted to the group that manage face-to-face customer care. Similarly, in our Rest of Africa business, we have 1 637 independent service providers, and 4 407 installers across 49 markets. Spread across our footprint, they deal with varying aspects of our business, such as decoder sales, dish installations and processing payments. We provide continuous support through access to our systems and training to ensure the highest level of customer service.

The MultiChoice Innovation Fund (the fund) is an enterprise development fund administered by the MultiChoice Enterprise Development Trust (the trust), which is aimed at empowering black-owned small and medium enterprises in the ICT industry. The trust works in tandem with the group to identify, support and develop qualifying small and medium enterprises and support entrepreneurship. Since inception, the trust has committed ZAR228m in loans, grants and business development expenses to assist beneficiaries in acquiring skills, assets and equipment.

This year, the fund embarked on a series of roadshows, and has since received more than 2 000 proposals from small businesses across the country.


CRITICAL ISSUES FOR OUR SUPPLIERS

HOW WE ARE ADDRESSING THEM

CRITICAL ISSUES FOR OUR SUPPLIERS

How the group is adapting to the rise of OTT

OTT services have created disruptive changes in the traditional pay-TV landscape, notably in developed markets where broadband penetration, speeds and affordability sufficiently support the scale take-up of these services. This impacts traditional suppliers across content producers, satellite transmission systems providers and set-top box manufacturers, among others.

HOW WE ARE ADDRESSING THEM

 

Satellite and DTT will remain the most cost-efficient ways of distributing long-form video content to the mass market across Africa for some time to come. We expect to continue collaborating with our partners for the foreseeable future. With technological advancements, falling data prices and the rapid rollout of broadband, we expect OTT to continue competing alongside traditional linear pay-TV across the continent, and bring with it scope for both traditional and new suppliers to continue partnering with us.

CRITICAL ISSUES FOR OUR SUPPLIERS

Disruptions to the supply chain from COVID-19

The entertainment industry is particularly susceptible as it constitutes thousands of freelance actors, producers, directors and camera operators. Similarly, sport federations rely heavily on broadcasting rights fees to fund their businesses.

HOW WE ARE ADDRESSING THEM

We recognise the difficulties our partners in the industry are facing. Across the continent, business and industry are experiencing disruptions and delays. In South Africa, for example, production came to a complete halt for five weeks as the industry adhered to the national lockdown but was able to resume under strict hygiene measures in place from May once lockdown restrictions were eased.

Read about our response to the social and economic impact of COVID-19.

While Irdeto and our set-top box manufacturing partner initially experienced supply chain interruptions, this was managed through a combination of inventories on hand and the resumption of manufacturing in China in March and April.

Key focus areas going forward

Looking ahead, we will continue investing in local content and sourcing world-class entertainment from our international partners. We will also continue engaging with sporting leagues and bodies to deliver excellent sport to our viewers, while accommodating shifting schedules due to COVID-19. Our satellite distribution systems are fairly settled, but we will proactively strive to enhance our online distribution capabilities and partnerships. We will also continue driving transformation through our supply chain in a responsible and sustainable manner.