By preparing to take control of MultiChoice, Canal+ is creating an African television giant which will tomorrow be the gateway to MyCanal on the continent, after its entry into Europe and Asia.
MyCanal, an atypical platform
American video streaming services have all internationalized, in the wake of Netflix, to amortize the cost of their productions on an international scale. In France, Max (HBO) is the latest player to launch in May 2024. Faced with them, everywhere in the world, few players are able to truly resist and impose their paid content offering. Canal+ is one of the exceptions that proves the rule.
Five years after the arrival of Netflix in France, which immediately established itself, Canal+ abandoned its old strategy of controlled and exclusive offering to also distribute the offers of its competitors from 2019 (see row her n°53, p.39). Indeed, as a publisher of channels or services, Canal+ certainly has original content in sport, in series, in cinema in France, thanks to its privileged position in the media chronology, but this does not not enough compared to Netflix or Disney+.
In order to protect the content offering that makes the Canal+ brand powerful, the development of distribution activities and aggregation of competing offers has become necessary: the more customers want to have access to content from Canal+ and another service, the more these “other” services depend on Canal+ as distributor to reach a wider audience. Apple learned the consequences on the French market in April 2023 and entrusted Canal+ with the distribution of Apple TV+, in association with subscriptions to MyCanal.
This is the originality of Canal+’s strategic positioning: the group depends on its premium television channels (including the Canal+ channel) to strengthen its brand identity; On the other hand, it invests in the online aggregation of third-party offers (MyCanal) because, in video streaming, Canal+ content alone is insufficient to ensure a significant subscriber base. MyCanal then emerges as a competitor to other stream aggregators, like Amazon Prime Video which mixes “in-house” content and third-party offers (the Warner Pass in France). For this reason, MyCanal is an atypical “platform” which brings together from a single interface a channel offering, a replay offering, a video streaming offering, all coming from different players.
The internationalization of the Canal+ model and the challenge of financing content
The particularity of MyCanal as an all-in-one “platform” (channels, replay, VOD) explains why the Canal+ group is still banking on television to resist the arrival of American video streaming players, at the same time as it is seeking to internationalize to reach a critical size. The export of MyCanal therefore does not systematically involve the launch of the video streaming service in other countries, as all American players do. Internationalization through television generally prevails, for example with a television channel and streaming service launched in Austria in 2022, or the launch of a satellite television package in Ethiopia in 2011, with the aim of then convert subscribers to MyCanal once fiber is deployed in the country.
Therefore, when it seeks to internationalize, the Canal+ group will invest both in distributors from streaming, but also in distributors specializing in television. It is positioning itself in new video streaming markets (see row her n°67, p.59) when it invested in July 2023 in the Swedish Viaplay, whose capital Canal+ further strengthened on 1is December 2023 (it now holds 29.33% of the capital alongside the Czech PPF with 29.29% of the capital), or when it invests in the Hong Kong Viu in June 2023, and again on February 26, 2024 to now control 30% of the capital. The Canal+ group will simultaneously invest in more traditional distributors, as long as they allow it to access new subscribers, such as the acquisition of the Luxembourg group M7 in 2019 (see row her n°53, p.36) and, today, the ongoing takeover of the South African group MultiChoice.
From 2020, Canal+ invested in the first private African group, present initially in the English-speaking countries of the continent with 20 million subscribers spread between seven countries. In Africa, in fact, television is mainly paid for when it is not pirated. In French-speaking Africa, Canal+ is accessible in a larger number of countries, twenty-five in all, but with only 8 million subscribers, a figure however multiplied by ten in ten years. In order to create an undisputed leader in pay television in Africa, the Canal+ group, with a 30% stake in MultiChoice, proposed to its board of directors, the 1is February 2024, to launch a takeover bid on the balance of its capital for 1.5 billion euros, i.e. a premium of 40% on the group’s share price as of January 31, 2024.
The offer was refused by MultiChoice, as it was considered insufficient: Canal+ has already invested 1 billion euros and its proposal valued the group as a whole at 2.5 billion euros. On April 8, 2024, the two groups announced that they had agreed on a takeover of MultiChoice by Canal+ for a valuation of 2.7 billion euros in total. The offer responds to the challenges that are those of Canal+, since the press release specifies that “ residents across Africa will be able to benefit from an enriched offering of content and associated services, in a technological setting meeting the best market standards, developed and belonging to this new group ».
The MultiChoice channels will therefore tomorrow be MyCanal’s gateway to English-speaking Africa, before Netflix and its epigones position themselves in these markets where the weak development of the Internet prevents them from developing for the moment. With a critical size in the African market, Canal+ also has the assurance of being able to upgrade the production of films and series in Africa to constitute a reference catalog. If the operation is successful, Canal+ will however have to come to an agreement with NBCUniversal which, in 2023, took a 30% stake in Showmax, MultiChoice’s video streaming service. At the same time, Canal+ will change its size on an international scale: with 26 million subscribers currently, and the 20 million brought by MultiChoice, Canal+ will have a total of some 50 million subscribers worldwide, getting closer to the American giants of the intermediate-sized streaming, for example Paramount+ and its 67.5 million subscribers worldwide at the start of March 2024.
Sources :
- Lavoine Stéphane, Madelaine Nicolas, “Canal+ to the aid of the Nordic streamer Viaplay”, The EchoesDecember 4, 2023.
- Lavoine Stéphane, “Under the hood of MyCanal, the technological and strategic asset of Canal+”, The EchoesJanuary 11, 2024.
- Sallé Caroline, “Africa, a strategic springboard to make Canal+ a world champion”, Le FigaroFebruary 2, 2024.
- “Streaming: Canal+ at 30% in the capital of Viu”, with AFP, cbnews.com, February 26, 2024.
- Lavoine Stéphane, “MultiChoice, Canal+’s 2.5 billion euro bet in Africa”, The EchoesFebruary 2, 2024.
- Alcaraz Marina, “MultiChoice refuses Canal+’s offer”, The EchoesFebruary 6, 2024.
- Alcaraz Marina, “South African MultiChoice opens the door to Canal+”, The Echoes6 mars 2024.
- Lavoine Stéphane, “The lights are green for the takeover of MultiChoice by Canal+”, The Echoes9 avril 2024.
