Myth perpetuation and pay-television pricing in Nigeria, by Livinus Acholonu

Over the last two weeks, I have seen what is undeniably a desperate myth perpetuation of pay-television pricing in the country. The myths have swirled around MultiChoice, rightly or otherwise considered the synonym for pay-television in Nigeria. One of such in circulation has is that Nigerian subscribers to MultiChoice pay-television services are being extorted by the company. Alongside this runs another suggesting that MultiChoice subscribers should be able to pay as they watch. This, I have observed, is sold to the public as “pay-as-you-view” model which, when mentioned, gets people jumping from one to 10 in the conviction that they have made some groundbreaking discovery.
I am familiar with both myths, as they are long-running narratives, which when in a charitable mood, I would file under misapprehension of television economics and models. When in a less than charitable mood, I will consider as products of willful ignorance or malice. For the avoidance of doubt, I want top-tier television entertainment at rock-bottom prices and wish to pay only for what I watch at a given time, but I am aware that is not possible except I subscribe to a video-on demand service, which pay-television is not.
Not long ago, the assumed pay-as-you-view model was used interchangeably with pay-per-view, a considerably pricier model used in the broadcast of high-ticket events.
I prefer to begin with the myth of extortion of Nigerian subscribers as has been widely reported in the media. The major strand of this claim is that MultiChoice bills Nigerian subscribers higher than it does subscribers in other countries in which it operates. Next to this is that the company slashed subscription prices by as much as 20 per cent in those countries, leaving out Nigeria and South Africa. This provoked calls to the Consumer Protection Council (CPC) to pressure MultiChoice into billing Nigerian subscribers exactly what it charges subscribers in other countries.
What I think get ignored by these limp comparisons are local dynamics, chief among which is the notoriously high cost of doing business in Nigeria, a situation attested to by many credible surveys and directly experienced by local businessmen. The invitation of the CPC to intervene in pricing, to my mind, indicates poor understanding of commission’s role. How the CPC is supposed to fix prices is beyond me as it should anybody with even a foggy knowledge of free market economics.
I would assume that the CPC’s duty would be to ensure that I optimally enjoy the paid for service, not legislate for service providers how much they should charge.
Having looked at the claims made, I concluded that they underline Nigerians’ fondness for myths. First, the claim that a blanket 20 per cent price reduction was effected across the continent (excluding South Africa and Nigeria), I have found, is one without a leg to stand on.
I say this because I invested a little time in internet research just to find out how much is paid on various DStv bouquets in other countries and how big a slash MultiChoice effected on prices. Let me confess that I was almost seized by the hysteria generated by these extravagant claims until I put a handbrake on my emotions to seek the facts.
What I found (and you can check) shows that Ghanaian DStv Premium subscribers who, until 1 November, paid 395 Cedis, have started paying 365 Cedis ($91.25), representing an 8 % slash. Those in Kenya paid 9,400 Kenyan Shillings, but have started paying 8,180 shillings ($80.982), a 13 per cent price reduction. Ugandan Premium subscribers, until the slash, paid 334,000 Ugandan shillings, but now pay 287, 250 Ugandan shillings ($83.302), a reduction of 16 per cent. Zimbabweans paid the equivalent of $81 but now pay the equivalent of $72. Subscribers in Mauritius were billed the 2,835 rupees, but have started paying 2,700 ($74.93). South African subscribers paid and still pay 759 rand ($56.16), while those in Nigeria pay N13,980 ($43.68). The price in Nigeria, we all know, was fixed early last year, when the naira was just beginning its tumble against the dollar and not at the current crippling rate of N457 to the dollar.
Compact Plus subscribers in Ghana, Kenya, Uganda, Tanzania and Zimbabwe, I similarly discovered, now pay the equivalent of $61.25, $53.16, $55.30 and $56.35 respectively. South African and Nigerian subscribers on this bouquet currently pay 459 rand and N9, 420 ($29.43) respectively. The price in Nigeria was also fixed last year.
For Compact, Nigerians pay N6,000, which at the time it came into effect, was $11.25, while South Africans pay the equivalent of $16.20.
First, these figures show that there was no blanket 20 per cent price slash across Africa from which South Africa and Nigeria were excluded. They also explode the myth that Nigerians pay the highest subscription of MultiChoice subscribers, a long-running and unfounded pet peeve.
Now to the exclusion of Nigeria from the price reduction. I do think that if we were already paying considerably lower rates, we should not demand, as of right, further slashes, especially when our national currency, through no fault of MultiChoice (which buys television content in dollars), continues to lose its value. The griping about exclusion also plainly ignores the fact that the depreciation of the naira to the dollar may be greater in Nigeria than what has been experienced by the currencies of other countries in relation to the American currency.
Let us now examine the confected “pay-as-you-watch” or its variant “pay-as-you-view”. There is the small matter of MultiChoice being the only pay-television service provider from which this model is demanded. I do not remember other providers being heckled to adopt pay-as-you-watch. MultiChoice is not the only pay-television service provider in the country.
The bigger one, though, is the misplaced agitation for pay-as-you watch. How this is supposed to work has never been clearly enunciated by its proponents. Do they want to be billed for the channels or the shows they watch and only when they watch? Guess I can provide a little illumination. The agitation is the product of the pay-as-you-go (PAYG) model in the telecommunications sector, which adopted the per-second billing model after an initial reluctance. Well, in pay-television, as my research shows, no operator does pay-as-you-watch, including in those countries we are quick to cite as examples in our relentless bid for victimhood.
The internet can also be of assistance here. What I found through my search is the monthly contract model, with channels bundled together to meet television-viewing tastes and in ways that make economic sense. It seems to me that pay-as-you-view is being conflated with video-on-demand (VOD) services such as offered by Netflix and other providers. A VOD offers me the chance of taking my video entertainment a la carte, ensuring that I pay only for what I watch and when I do. Pay-television content contracts, I know for a fact, are not signed on pay-as-you-watch basis.
I also know that pay-as-you-watch is not interchangeable with pay-per-view (PPV). The PPV model allows a subscriber to watch special events, usually of the high-ticket variety in sports and entertainment, by paying for such events in addition to having an active subscription. If pay-per-view was available in Nigeria, I would have to pay my monthly subscription to a pay-television provider and then pay an additional sum (usually very high) to have access to a high-ticket event like the 2014 Floyd Mayweather vs Manny Pacquaio fight for which boxing fans in the US paid $100 on top of their regular subscription. That is $100 for a two-hour fight. In Nigeria, those who watched the fight on DStv’s SuperSport channel did so at no extra cost.
The telecoms industry, which has a pay-as-you-go model, is significantly different from the pay-television industry. This is a thing we can all check out. Telecoms service providers do not buy content like pay-television providers do because their business is not that of providing entertainment content.
What they buy is spectrum, for which a one-off payment is made. That is not the case with entertainment content for which pay-television providers continually pay, with an upward review in prices when contracts for such expire. Pay-television companies are usually not content owners, but agents or vendors. The English Premier League, which we all enjoy, is not created by those who broadcast it in every country of the world. They pay to acquire the rights to broadcast the matches. And at the expiration of the contract, the price is reviewed upwardly. If I ran a business and wanted it to be successful, I would have to think about the cost of restocking. The assumption that pay-television companies can go against content contracts is one that is simply impracticable. How are television companies supposed to explain it to content providers? Do they go like “Mr. Acholonu watched a movie and got dissatisfied after 15 minutes and would want to pay for just that period?” If I went to a cinema, paid N1,500 for a movie and found it uninteresting after half an hour, would I be considered a sensible person if I asked for refund pro-rated on the time spent watching? Of course, not.
. Acholonu, a public affairs analyst, writes from Enugu.