DSTV: How Not To Treat An Industry Leader

Apparently this lady thinks Etcetera should take a chill pill.  This was published this morning by Sun News.

Emotions, very strong ones at that, has dominated public reaction to the 20 per cent hike in subscription rates of various bouquets announced by MultiChoice, the country’s leading pay-TV provider.

To say I was surprised by the public reaction to the announcement, made on 1 March and scheduled to take effect on 1 April, is to betray an Olympic standard lack of awareness of how people react to hikes in prices of goods and services they consider essential to how well they live.

It is a fact that emotions are part of the human make-up and we should expect expressions of such. However, it is also a fact that emotion and reason have a history of estrangement.

It is precisely because of the less than cordial relationship between emotion and reason that the reaction to the hike has been marked by affronted disbelief and the type of anger usually expressed towards those who have violated children.

That anger has birthed what has been dressed up as an ideological movement to free Nigerians from the shackles of exploitation. A widely circulated Blackberry Messenger broadcast, heavy on demagogue vocabulary, calls for a boycott of MultiChoice’s DStv and GOtv services from 1 April. “Enough is enough,” it says in rousing activist language, before demanding a pay-as-you-watch regime as well as lower subscription tariffs as MultiChoice offers in South Africa. The broadcast message also claims that MultiChoice subscribers in Nigeria number two million, a figure for which it cites no evidence or source.

On social media platforms and internet discussion forums, the reaction has not been different, with the same set of claims being recited like a religious mantra. In simple terms, a faith position has been taken. Faith, especially the variety accompanied by zealotry, and logic are not a mutual admiration society.

But has MultiChoice really singled out Nigeria for exploitation, as being claimed? Is prevalent tidal wave of public anger the appropriate reaction to an organisation that has given much to Nigeria in the shape of technology, entertainment, information, employment and in other fields?

I prefer to take a step back and reflect. Before presenting the outcome of my reflection, I need to say that I am in the category of those who want rock-bottom subscription rates. Left to me and me alone, I would pay nothing for the top class content that MultiChoice brings to my living room.

That said, I will now make a few submissions in the hope that a little more understanding will be achieved.

First, it is untrue that Nigeria is the only country where subscription rates have been increased. It is done in South Africa yearly and the country happened to be the first the new rates were announced. The new rates have since been announced in other countries. That is that. The claim that MultiChoice has two million subscribers is unsubstantiated. I do not have their subscriber figures, but I do think what can be asserted without evidence could and should be dismissed, as speculation, without evidence.

Pay-as-you-watch? That does not exist anywhere in the pay-TV world. Not in South Africa, as claimed by the author of the Blackberry Messenger broadcast; not in Ghana, UK, US or Papua New Guinea.  What is available is pay-per-view, PPV, which is considerably more expensive because it demands that you pay for the broadcast of one-off events, notably sports or entertainment, in addition to paying for regular pay-TV service.

Do Nigerians pay more for MultiChoice services than other African countries? No. Currently Zimbabweans paid the equivalent of $72, Zambians $81, Tanzanians $81.18, Kenyans $82, Mozambicans, $81 and Ghanaians $78.5 for the premium bouquet. Nigerians pay $72.46.

Is there a monopoly, represented by MultiChoice, as claimed? Again, no. There is StarSat, which recently won the rights to broadcast games from the German Bundesliga. We also have Consat, ACTV, MyTV, Montage TV and many others. Many others have come and gone, including HiTV, whose bid for pre-eminence floundered on account of inability to renew the rights it won to broadcast premium sporting content. That DStv got to the party first is not in doubt. That it tied up the most appealing content is similarly not in doubt. That is business, not crime.

Therefore, calling on government to institute some price control measures in pay-TV, to me, is bizarre, given that this is democratic country that runs a free market economy. As yet, I haven’t seen an agitation that the prices of toothpaste, beer, bread, suya, hotel rooms, mattresses, furniture and phones be reviewed downwards. There has been no campaign to get government to legislate the what carpenters, doctors, lawyers, engineers and other professionals charge for their services.

The costs of these services are determined by prevailing situations in the market. Why should the government fix prices for MultiChoice which, until recently, has charged the same rates for two years despite the volatility of the national currency and the country’s inclement business climate?

MultiChoice, to my mind, is responding to the prevailing market situation. It sure rankles when prices of goods and services rise, but that should not make those who have not walked in the shoes of providers of such goods and services demand that they be crippled.

The gap is the value of the naira to the dollar has developed into a chasm. MultiChoice, like other businesses, have no immunity against this development.

What that implies is that it has to pay a lot more to retain its rights to the content it broadcasts. Television content, especially in the premium category, is notoriously expensive. Traditional advertising revenue is incapable of covering the cost of acquisition let alone leaving room for profit. A major driver of the pay-TV model is sporting content which, as we know, does not come cheap.

For example, the broadcast deal for the Barclays Premier League, signed a few months ago, showed a 70 per cent jump in cost. If MultiChoice still wants to keep broadcasting that content when the deal kicks in next year, it must fork out more money. Sky Sports, which took a lion’s share of the deal by paying over 4billion pounds, did not pay that amount to sell to vendors at loss. Sky has also hinted that its subscribers will have to pay more to keep watching and subscribers, understandably disappointed, have not called on the British Parliament to put a handbrake on Sky’s plan to hike subscription. Television economics is a subject or reason, not emotion.

Morohunfolu, a financial analyst, lives in Port Harcourt.

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