In determining our material matters, we are guided by our business strategy, our opportunities and risks, our operating environment, and the concerns of our stakeholders. The material matters addressed in this report are issues on the board agenda that are methodically discussed and addressed.
The customer is always our primary focus.
Delivering value to our customers is critical to our business success. To ensure we achieve this, we focus on developing and introducing relevant products, selecting and creating the best content, and designing excellent customer service experiences with the customer journey at the centre of this.
We operate a largely fixed-cost business. As a result, optimising the various elements that support customer growth momentum and retention is a critical driver of our operating performance. We also manage exogenous pressure points such as tightening consumer spending, unemployment and electricity shortages, all with a view to expanding our base through traditional and new service lines.
We believe regulations are important to underpin markets and protect consumers, but need to be well considered and applied to all players consistently.
The industries in which we operate are highly regulated and our various group entities are subject to legislative and regulatory oversight in the countries where they operate. Material changes in regulations could require us to adapt our current business model and may impact our value proposition to customers.
As the regulatory environment becomes more complex, the impact and importance of managing this risk increases. Our approach to regulation remains positive as we proactively and frequently engage with regulators through our dedicated teams. This ensures we keep abreast of all developments and provide input that promotes a well-considered regulatory framework, which allows for a thriving industry.
Media formats undergo perpetual change and our experience has taught us that video entertainment is no different.
The global video entertainment industry continues to evolve as new technologies and business models provide opportunities to differentiate service offerings. A key trend is the ongoing impact of streaming services (OTT) in disrupting traditional linear pay-TV operators.
This presents both a risk of increased competition for subscribers and content, and an opportunity to scale our OTT services and adapt our business model. As the industry evolves, our investment in local content remains a key differentiator and strategic advantage.
Conceptually, our business is fairly easy to understand, but we operate in a complex environment with shifting conditions and practical challenges in executing our strategy.
Each of our business segments contributes in different ways to value creation. We set ourselves challenging operational and financial targets, and our leadership teams are incentivised to implement our specific segmental business plans.
As a more mature operation, the South African business is focused on retaining existing customers, while driving OTT adoption and growth in the mass market. At the same time, its ambition is to deliver broadly stable profits and cash flows, and to broaden our entertainment ecosystem through new services and partnerships.
Rest of Africa
In the Rest of Africa segment, which is currently loss making, the focus is to continue narrowing the losses every year and return the business to profitability over the medium term. A fundamental aspect of this turnaround is our ability to navigate the macro-economic challenges that we face in many of our markets. While our diversified footprint across the continent allows us to absorb some currency weakness, significant exchange rate deterioration outside of historical trends and ongoing pressure on consumer discretionary spend is likely to slow our turnaround time.
Piracy could negatively impact our video entertainment services if it is unaddressed, and our Technology business is thus focused on delivering critical digital security solutions and media security to our group companies, as well as to external customers globally. At the same time, we are investing in new revenue-generating opportunities in connected industries to drive ongoing future growth.
Our people are fundamental to our success
We seek to delight our customers by providing access to compelling content and entertainment. Attracting and retaining the right people to achieve this goal is a key aspect of our strategy. We are passionate about creating a workplace where people are engaged and inspired.
Key focus areas for us include growing diverse, representative talent in critical areas of differentiation (such as content, engineering and data science) and developing succession plans for critical workforce segments to ensure growth and continuity. Leading organisations start with winning cultures. Therefore, we consistently strive to nurture an enabling environment so that our people can create the best solutions for our customers.
Supporting and uplifting the local entertainment industry
As a responsible corporate citizen, we aim to make a contribution beyond just our business. Our investment in local content generates jobs and provides a platform for homegrown talent to shine.
In addition, the local sport we produce and broadcast (including some broadcasts on community TV stations) supports sport bodies. It enables them to generate income and continue developing sport.
We believe in strategic CSI and majority of our initiatives are aimed at promoting sport and content production (filmmaking) across sub-Saharan Africa. They also positively address the issues of health, education and empowerment.