INTEGRATED ANNUAL REPORT FOR MULTICHOICE SOUTH AFRICA HOLDINGS (PTY) LTD AND PHUTHUMA NATHI INVESTMENTS (RF) LTD

Connected Video OTT is a growing trend in the video- entertainment market globally with more and more consumers shifting to on-demand viewing on multiple devices. A key driver for this is the convenience for the viewer to be able to choose what and when to watch, which in turn is enabled through faster and more affordable broadband in combination with an increased number of connected devices such as smart TVs, game consoles and smartphones. MultiChoice is observing these same developments in South Africa. While the fixed broadband penetration is projected to remain low compared to the rest of the world for a longer period of time, the connected smartphone penetration continues to increase. So while the OTT market is gaining traction, especially over mobile networks, and opens up new revenue streams for the group, we expect the traditional pay-TV market to continue to show growth for years to come. In order to be ready for a future where broadband connectivity continues to improve and data prices fall further, we have over the past few years continuously increased our investments and capabilities in OTT and built a compelling offering. This includes DStv Now, a complementary service for DTH subscribers, and Showmax, our standalone subscription video-on-demand (SVOD) service. We also established the Connected Video business unit with the aim of consolidating our digital assets (Showmax 35 MultiChoice South Africa Holdings Proprietary Limited integrated annual report 2019 OUR PERFORMANCE