As it turns out, the money is only half of the Showmax story.
SA has notoriously stringent regulations governing who can own and control our media (we won’t get fooled again… Yeeaah-aaahhh
). If a foreign entity tries to sneeze in the direction of a local broadcasting licence, it usually triggers a years-long bureaucratic nightmare haunted by the Independent Communications Authority of South Africa (Icasa), the Competition Commission, and inevitable trade union protests.
But, Canal+ executives in Paris managed to execute an immediate hit on South Africa’s local streaming platform overnight. Here’s how:
The illusion of control
To understand the trick, you have to understand the barrier they were facing: Section 64 of the Electronic Communications Act (ECA).
The ECA explicitly states that a foreigner may not exercise control over a commercial broadcasting licensee, capping foreign voting rights at 20%. There is a common misconception that this cap exists for consumer protection or purely to give trade unions leverage. It doesn’t.
Consumer protection is governed by the Consumer Protection Act. The 20% cap is a shield for national sovereignty. It was designed to ensure that South African airwaves remain controlled by South Africans, to promote a diversity of local views, and to enforce Broad-Based Black Economic Empowerment (B-BBEE). Yes, unions fiercely defend the cap because local control usually means local jobs, but the law itself is about who controls the cultural narrative.
When Canal+ moved to acquire MultiChoice, this 20% cap was the player it knew it had to take out of the game early.
(Note: this is more my interpretation of the facts that I have access to, and a question I did put to Canal+, who didn’t respond yet - which is the other reason I had to cut it out of the original story)
If Canal+ triggered the ECA restrictions, they would be reduced to a minority voting voice, neutered from making the ruthless cost-cutting decisions (like killing a cash-burning streaming service) needed to justify their massive buyout premium.
Enter the LicenceCo
So, Canal+ and MultiChoice lawyers simply redefined the lines on the pitch.
Ahead of the takeover, they executed a corporate restructure. They carved out MultiChoice’s DStv satellite business and quarantined it into a new, highly regulated domestic entity called LicenceCo.
Because LicenceCo held the traditional broadcasting rights, it remained strictly subject to the ECA’s 20% foreign voting limit, keeping Icasa and local politicians happy.
But Showmax? Showmax is delivered via the internet, not explicitly broadcast over the internet (yes, I know DStv Stream exists, but trust me – the ECA is nowhere near catering to that digital twin service).
By legally separating the streaming assets from the satellite assets, Canal+ successfully reclassified Showmax not as a broadcaster, but as an Over-The-Top (OTT) video content supplier.
Under current South African law, OTT services fall into a grey area. They don’t require the same heavily regulated commercial broadcasting licences as DStv or eTV. By dropping Showmax into this unregulated bucket, Canal+ effectively bypassed the ECA entirely.
Once the ink dried on the marriage certificate, Paris had 100% executive control over Showmax. And they used that control immediately.
Clearing the runway
But why the rush to bypass the regulators? Because, as I explained yesterday, Canal+ doesn’t have time for bureaucratic delays if they want to execute their endgame – and Showmax is (was) burning R558,000 an hour.
As Leslie Adams, sales director at Reach Africa, pointed out, the streaming industry globally has moved out of its “growth at all costs” phase. “The previous MultiChoice leadership had doubled down on Showmax as a standalone streaming platform,” Adams explained in a written response to Daily Maverick questions, “whereas Canal+ has been clear that rationalisation and cost discipline would form part of its approach.”
By side-stepping Icasa, Canal+ cleared the runway for their ultimate vision: the aggregator model.
“In several of its existing markets, Canal+ already operates what is effectively a ‘super-app’ model,” she says. “A single platform that combines live TV, video-on-demand and sport, while also allowing users to subscribe to third-party services such as Netflix or Disney+ through a centralised interface.”
You cannot transition to a nimble, bandwidth-friendly super-app if you are bogged down in years of regulatory hearings over the closure of your legacy platform. Bypassing the ECA was a necessity to ditch the expensive Comcast architecture and pivot to their own myCanal technology.
It was a cold, calculated, and brilliantly executed corporate gameplay. South African lawmakers spent two decades building regulatory fortress walls to protect our broadcasters. Canal+ simply pivoted around them.