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ZARc 6847 -2.45%Investor briefcase Strategy
Investor briefcase Strategy
At our core, we strive to be Africa’s content gateway of choice.
We offer a platform agnostic video entertainment service to consumers across sub-Saharan Africa and are leveraging our scale to build an ecosystem which keeps customers engaged. Our ambition is to strengthen our leadership position in video entertainment across the continent, expand our consumer services platform, scale Irdeto to a leading media and cybersecurity business globally and continue building a sustainable business that delivers value for our stakeholders.
In an evolving video entertainment industry, a differentiated content strategy is key to success. Our strength lies in our local content expertise, the appeal of our sports offering and our ability to aggregate and connect our viewers to a full-service video entertainment offering.
Our significant and growing investment in local content sets us apart from international competitors, especially as African viewers love to see content in their own languages, with local actors and stories that resonate culturally. Demand for local content continues to exceed our supply, and local content is cheaper to produce on average per hour with lower currency risk than international content. We also have greater control and flexibility in how we leverage owned content across our packages, services and platforms.
While our core video entertainment business continues to grow and generate free cash flow in aggregate, we are looking to develop future revenue streams by investing in opportunities that are consumer-focused, leverage our scale and local advantages, and are underpinned by technology. We are well positioned to develop and support a compelling ecosystem of consumer services in sub-Saharan Africa given: our scale and distribution capabilities; our reach of over 23m households across 50 countries; our proven track record of delivering video entertainment services over nearly 40 years; our investment in enduring relationships with customers and suppliers; our ability to manage in-country regulatory, language and cultural nuances; and our established payment collection capabilities where we have an unrivalled ability to process over USD200bn in annual payment transactions through over 200 payment partner integrations in over 40 markets in sub-Saharan Africa.
Growing and maintaining a vibrant subscriber base remains key to our success as a group. Our South African subscriber base has different characteristics across our packaged tiers, and we need to cater for our subscribers' specific requirements and circumstances. Given economic and loadshedding challenges in our core market, we are particularly focused on retaining customers in the top and mid markets, while continuing to grow the mass market subscribers. Since our video entertainment operating costs are largely fixed, scaling our customer base and implementing inflationary-linked pricing remain an essential element of the Rest of Africa segment's path to self-sustaining cash generation. Our 'installed' customer base (customers who own a decoder) also provides the foundation on which we are building out our consumer services platform, as it provides opportunities for new ways to add value to our customers' lives, increase their level of activity and ultimately enhance returns to our shareholders.
Our track record reflects our ability to innovate and adopt new technologies with the aim of catering for our customers' ever-evolving needs. Although there have historically been challenges around broadband connectivity in our markets, customer behaviour is increasingly moving online and we believe that we are approaching an inflection point in terms of broadband access and affordability. This will support an acceleration in the adoption of streaming services across the continent. As such, it is critical that we position our business ahead of the growth curve and potential increase in competition.
Our Technology business, Irdeto, is one of the leading companies globally in providing digital platform security, content protection applications and cybersecurity solutions for the media and entertainment industry. Our aim is to drive growth, scale and increased market share through new customer wins and enhanced product offerings.
Our aim is to deliver positive operating leverage through time – keeping the organic growth in our cost base below the organic growth in revenue, thereby driving margin expansion for the group. We continuously strive for operational excellence and optimising cost efficiencies across our business. From time to time, this may require some upfront investment as we redesign certain critical systems to support our future business requirements and customer needs. We are also scaling our analytics and AI capabilities, focusing on improving customer experience, driving revenue, enhancing content discovery and reducing costs.
