Nigeria is gradually turning from a market darling to a risky land in the eyes of many investors.
Policies somersaults; regulatory instability; large scale distractions from lawmakers as well as opinions of ill-informed experts are conspiring to hobble Nigeria’s fledgling broadcasting industry,
And the National Broadcasting Commission (NBC) has also opened itself to a needless controversy in current bid to regulate the broadcast industry.
Elsewhere, either by ignorance or mischief, the House of Representatives is hounding Multichoice, operators of DStv and GOtv over current pricing model.
The House ad-hoc committee is convinced that the pay-TV operator is ripping Nigerians off with its current pricing model and has resolved to force change by compelling cable service providers to switch to a pay-per-view (PPV) or pay-as-you-go (PAYG) pricing model.
According to weetracker.com, the PPV/PAYG option might prove a bigger problem because pay-TV companies like Multichoice Group expend hundreds of millions of dollars acquiring broadcasting/licensing rights all over the world.
Some companies acquire broadcasting rights for years at a time with upfront payment.
“For instance, Multichoice’s popular DStv sports channel, SuperSport, paid EUR 296 Mn (USD 332.05 Mn, at today’s rates) for the 2016-19 Barclays Premier League broadcast rights in Sub-Saharan Africa.” weetracker.com reported.
After paying so much to acquire these rights, companies like Multichoice recoup this money from subscriptions while targeting profits.
But sometimes the margins are quite narrow.
According to weetracker.com, if Multichoice gets strong-armed into going the PAYG or PPV route in Nigeria, there is hardly a doubt that the company will adjust its pricing to offset the difference and make their money back; such that the PPV/PAYG option might prove even more costly for subscribers after all checks and balances are done.
But even this point is moot as Multichoice has previously made it clear that it is incapable of implementing the PPV model.
Nico Meyer, CEO of MultiChoice Africa, told an entertainment content conference that was held in Mauritius in 2014 that his company has no capacity to put in place such a facility.
“We procure content on a monthly basis, we don’t procure it based on the time the consumer will be using it, but on an entire month,” said Meyer.
The MultiChoice Africa boss added that, unlike mobile operators and electricity companies, they were unable to detect when their subscribers are actually using their service.
“If you buy airtime and you consume it, they will deduct it because they can tell. But we cannot tell when someone is traveling or not using it.
“All I know is that someone pays on a monthly basis and we make that service available but I cannot tell if you are consuming the service,” he said.
By the admission of Armstrong Idachaba, acting director-general, NBC, the agency has on many occasions compared the tariffs in Nigeria with those of other African countries and found out that Nigeria’s rates are much lower in some cases, including the company’s home country, South Africa, where it actually has a far greater number of subscribers.
As of November 2019, the group’s overall subscriber base stood at 18.9 million households with South Africa single-handedly accounting for 8.2 million of those.
The remaining 49 countries where Multichoice broadcasts, including Nigeria, collectively make up 10.7 million.
Of DSTV’s 13.5 million subscribers in Sub-Saharan, Nigeria accounts for barely 1.5 million.
This should put to bed any talk of Nigeria’s being Multichoice’s largest market, as South Africa actually has nearly 5-times Nigeria’s total DStv subscriptions.
Another misconception that is common among Nigerians is the unfounded idea that the group offers the PPV option in South Africa.
According to weetracker.com, this s is a bogus and untrue claim as Multichoice is not known to offer such anywhere.
Indeed, DStv and GOtv bouquet prices increased significantly recently but this may not be unconnected to the revised taxing regime that came into effect this year.
Earlier this year, Nigeria had implemented a new Value-Added Tax (VAT) regime which was a 50 percent climb from the previous figure.
The move by NBC to upend the existing right of broadcasters to exclusivity of their content indicates a descent to feudalism–a dominant social and economic system in medieval Europe where ownership of land and other factors of production is by privilege of birth and not on the basis of innovation and hard work.