Multichoice is a South African video company and internet company which grew out of M-Net, both of them being owned by Naspers. Multichoice is best known for DStv, their pay-TV service.
To expand their business across Africa, Multichoice embarked on a lot of joint ventures in different countries and licensed franchises in others. In Zimbabwe they decided on a franchise arrangement.
From the onset we should understand that there are different types of franchises. Even when franchises are similar, they usually are not identical, for example business franchises awarded by KFC are different from the ones McDonald’s give. The difference is starker for a fast food outlet like KFC and a pay-TV service like DStv.
Some business franchises require the franchisee to pay a fixed amount per period for use of a trademark and brand name. Some franchise agreements require royalty payments based on number of units sold for example. In Multichoice Zimbabwe’s case, what they pay out is dependent on the number of subscribers they get.
This means that although Multichoice Zimbabwe is paying out over $45m in six months to South Africa they get to keep the profits in US dollars. The thing is, Zimbabwean subscribers pay their full subscriptions in US dollars but not all of it is remitted to South Africa. Some of it is Multichoice Zimbabwe’s.
Some have raised the point that Multichoice Zimbabwe should not get to be paid in US dollars whilst all the other local businesses struggle with bond notes. They argue that they should ask for only the portion they remit to SA in hard currency and the balance should be swipable, EcoCashable etc.
Of course Multichoice Zimbabwe would not want that. The biggest reason obviously being that they do not want to be paid in bond notes, who does? The second would be that they would be telling everyone how much they make, the bond note portion. The third might be the difficulty and/or cost in implementing such a payment system.
We now all know that the Zimbabwean government has a sizable investment in Multichoice Zimbabwe and so we know that even if it was feasible and made all the sense in the world for them to split the subscription payments it still would not happen.
What do you think about Multichoice Zimbabwe getting paid in US dollars? Do you think they should be forced to split the subscriptions into bond note and foreign currency? Or maybe you think they should actually be forced to take the whole subscription in bond notes, something Kwese TV promised before they got banned. Let us know what you think.
Multichoice Zimbabwe is the Zimbabwean operation of the South African headquartered company Multichoice Africa. Multichoice Zimbabwe operates as a franchise and is registered under the name Skynet Pvt Ltd. The local company is the one in charge of the DStv pay TV operations in the... Read More About Multichoice Zimbabwe
Bond Notes are a currency of notes backed by a bond that the Zimbabwe government announced on 4 May 2016 by Reserve Bank of Zimbabwe (RBZ) governor John Mangudya. The $2 denomination of the notes was finally introduced on 28 November 2016. More notes were... Read More About Bond Notes
Kwese TV is a Zimbabwean satellite and broadcasting network owned by Econet Wireless Zimbabwe, under Econet Media. On 23 August 2017, Econet Media announced that Kwese TV was now available in Zimbabwe and that decoders were available at Econet Shops. However, that very same day... Read More About Kwese TV