why showmax really failed

Showmax is shutting down Amazon, PayPal left and only recently returned after 20 years. I know what you're going to say, but I don't mean like Africa has bad infrastructure type of way. I mean like if you take a look with Showmax over the years, you just start to see a pattern that you can't ignore. So quick background, Showmax launched in 2015 by MultiChoice and the goal was to build a streaming platform for the African continent. So over the years they invested into local content, sports and expanding across different countries. Then in 2023, a French media company Canal+ started increasing its stake in MultiChoice and by 2024, they had significant control of the business. Around the same time, Showmax did a full $500 million dollar relaunch. They partnered with NBC Universal and upgraded their platform using the same tech and integrations that power Peacock. This was a very serious attempt to scale, but financially it just wasn't adding up because although the company made $204 million between 2023 and 2025, they also lost $523 million within that same period. So essentially for every dollar that Showmax made, they lost $2.50. I actually wasn't surprised when Canal+ decided to shut it down because it actually makes sense when you break down the environment in which they were operating. Take something as simple as data. For example, watching a one hour video uses roughly 1 to 3 gigabytes of data. And in many African countries, 1 gigabyte can cost anywhere between 50 cents and $3. So if you're paying for a subscription and also spending that much just to watch content, then it adds up very quickly. Then there is internet access. Africa's internet penetration is roughly 40 to 45%, so more than half the population doesn't have consistent internet access, which means your actual usable market is already much smaller than it looks on paper. And we can't even forget piracy. Africa has some of the highest piracy rates globally, which is a no-brainer because if content is expensive, then people are going to find alternatives as they should. Meaning platforms like Showmax weren't just competing with Netflix, they were competing with free. And when you put these things together, the data cost, internet access and piracy, you start to understand why scaling something like streaming in Africa is just harder. And we've actually seen this happen multiple times before. Like if you remember OLX, OLX everywhere, it was basically the place to buy and sell things online. In Nigeria, it was in Ghana, it was in Kenya. And then around 2018, the company started quietly shutting down its operations in Africa because they couldn't change behavior. Between 2012 and 2018 that they were in Africa, they found it so difficult to build trust and complete transactions online. Then you have Amazon who had big plans around content and distribution in Africa, but around 2024, they stopped commissioning African original content. And Netflix that is very much still available, they've started scaling back on how much they spend on African originals. And a lot of times people would say, but I have a Netflix subscription, I buy from this startup in Africa, I do that. If it's because of social media, but everybody in Africa on social media, literally people don't realize that the 45% of people on that that have access to the internet, and even when we add demographic parameters, let's say, um, 45% they are not of legal purchase age, or I don't know, purchase something online. They are looking for where their next meal is coming from. So who is in the market that is going to be able to afford and pay for these things like, serious question, who is going to pay for these things? Friends alone was licensed for around $100 million for one year to Netflix. That's how much Netflix is paying. I think this was even for the US alone. Now compare it to other markets. The Office that was licensed for around $500 million for a multi-year deal to another platform. Where is money going to come from? Listen to founders building in Africa, they all say the same thing. Whether it's people like Flutterwave or Paystack, yes, they are building great products, but they are also dealing with infrastructure gaps at the same time and literally reshaping how people use products. Any sane person building in Africa will tell you the two most challenging things are infrastructure gaps and changing people's behavior. Funding doesn't even come close. Take Moniepoint for example, they could have just built a slick digital platform for small businesses and left it at that, but that wouldn't have worked. That a lot. Because they understood that a lot of their users are still operating in cash, they don't fully trust digital payments and many of them are using these tools for the first time. So what they did instead was very different. They went into markets, they onboarded people physically, provided them with POS machines so that cash and digital could work side by side and essentially built their product around how people already behave, while slowly changing that behavior over time. And that's the lesson here. People don't always see. It's not just about building the perfect product. It's about everything else around it. And it's about behavior and infrastructure they cannot solve for at the beginning. Then I'm sorry, nobody in Africa is going to use your product. And what's interesting is that in other markets, companies can lose money for years and still keep going. For example, Peacock, the company that Showmax partnered with their technology, they lost $2.7 billion in 2023 and another billion dollars the following year, yet still running. And it makes sense because those markets are stronger when it comes to infrastructure, purchasing power and investors who are willing to wait. So even if the company is losing money today, there's confidence that eventually it will pay off. But when it comes to Africa, that same patience doesn't exist. And I kind of get it because from the outside, it looks more uncertain, but if we're being honest, I think it's the opposite. Africa is actually more predictable because you already know what the challenges are. Infrastructure gaps, behavior that needs to shift, lower purchasing power, corruption. I'm not hiding anything here. On the other hand, in more developed markets, you can wake up to completely different risks overnight. What a certain US president did with oil and how the markets crashed. And now everybody on this earth has their energy like nobody is unaffected. So these are things you cannot plan for in developed markets. Anyway, I think PayPal is also a very interesting example here because they left markets like Nigeria years ago, not because payments weren't needed, but because the infrastructure and behavior weren't ready. And now they are back, but they're working through companies that have already built the system and the bigger picture here, a lot of the challenges that Showmax struggled with are exactly what African startups like Kava are trying to solve for right now. And once that layer becomes strong enough, you'll probably see a lot of these global companies and I guess the lesson here is that infrastructure is our responsibility and a lot of these foreign companies, they are very hands off. They don't want to invest in it for behavior. They could probably want infrastructure, they wouldn't want to do that. And until we are able to build that, they are not going to come back. And maybe they shouldn't cause they end up coming back of us and not even reinvesting back all the time. But anyway, the essence of this video is that it's less about how strong your idea is, how beautiful, how wonderful. It's more about whether the environment is ready for it. So for anybody building in Africa right now, I want you to remember behavior and infrastructure.