MultiChoice Nigeria and significant stakeholders in the country’s pay television broadcasting business have rejected the Senate’s pay-per-view concept.
Currently, the monthly subscription model is used by the nation’s leading cable television providers.
The stakeholders stated that the Senate’s proposed PPV model is not feasible.
MultiChoice and industry stakeholders presented these claims at a one-day public hearing held in Abuja by the Senate Ad-Hoc Committee investigating “Pay-Tv price increases and demand for the pay-per-view subscription model in Nigeria.”
The Committee was chaired by Senator Aliyu Sabi Abdullahi, the Deputy Senate Whip.
Senators Michael Nnachi, Suleiman Abdul Kwari, and Abba Moro, who sponsored the resolution for the Senate to investigate the continual price increase by cable television companies in the country, were among the panelists present at the session.
Mr. John Ugbe, chief executive officer of MultiChoice Nigeria, stated in his presentation that a number of legal and legislative attempts to compel the company to operate a pay-per-view model failed because it was impractical.
Ugbe stated, “While it may appear to be a laudable intention for this Committee to be worried about the rising cost of subscription services, the Pay-Per-View (PPV) model proposed by this Committee will not work to the consumer’s or industry’s advantage.”
“It appears that this issue stems from a lack of clarity on the fundamental definitions and distinctions between some of the existing operational business models in telecommunications and pay-television broadcasting.
A pay-per-view (PPV) is not the same as a pay-as-you-go (PAYG) service” (PAYG).
“The PPV model enables subscribers to watch exceptional one-time events, typically of the high-ticket sort in sports and entertainment, by paying for these events in addition to their active subscription.
“Pay-As-You-Go supports a metered style of service in which clients are billed only for the service they consume and not for a set period of time.
“This Committee’s wish to embrace PPV is further complicated by the lack of any technology that can identify and/or determine which viewers are tuned in at any given time.
“Once it is impossible to obtain this knowledge, per-view billings become difficult, if not impossible.
“Therefore, I respectfully submit to this esteemed committee that, due to the nature of content acquisition and technological limitations, the PAYG model for broadcasting is impractical, is not practiced, and cannot be adopted anyplace in the world.”
Ugbe attributes MultiChoice’s continual price rises to various factors, including inflation, the cost of programming material, broadcast transmission facilities, and enormous investments to innovate and keep up with technological advancements.
According to him, additional elements include anti-piracy charges, security costs, marketing and operational expenses, exchange rate changes, tax, regulatory fees, and cumulative national and municipal taxes.
Ugbe stated, “Some of the aforementioned negative economic factors have not only affected the subscription prices for pay-tv, but have also led to significant increases in the prices of a vast array of goods and services, ranging from essential commodities such as food, transportation, clothing, healthcare, and educational services to other consumer goods such as gasoline, building materials, automobiles, etc.”
Former National Broadcasting Commission (NBC) Director General Emeka Mba stated that Pay-Per-View (PPV) and Pay-TV price issues do not constitute a significant regulatory issue warranting Senate involvement.
Professor Malcom Sparrow of Harvard University’s Kennedy School of Government notably stated in his book ‘The Regulatory Craft’ that regulators should prioritize and solve significant challenges.
“In my humble opinion, the concerns being discussed today do not represent or amount to a significant regulatory issue.”
“Although it may look concerning that membership fees for pay television services are rising, this must be viewed in the context of the greater economic issues of rising inflation, cost of living, and exchange rate that every sector of the economy faces.
“For example, the prices of nearly every item on a family’s grocery list have risen dramatically due to the reality of demand and supply caused by the aforementioned economic issues.”
In addition, the Chief Executive Officer of TSTV, Dr. Bright Echefu, and the Chief Operating Officer of Startimes, Tunde Aina, stated that even if a pay-per-view (PPV) model is impractical, Cable TV providers might use pay-per-day models to alleviate the suffering of poor subscribers.
Echefu stated, “Pay-Per-View is impractical, therefore we devised pay per day.” In addition, we allow our users to select a bundle based on the quantity of channels they wish to receive.
In his opening remarks, the Committee Chairman, Sabi Abdullahi, stated that the Senate established the panel after approving a motion on the subject in plenary.
According to the motion, the price of various MultiChoice bundles has climbed by 80 percent over the past five years.
Abdullahi stated that the move was not in the subscribers’ best interest, especially because a court had cautioned MultiChoice Nigeria against implementing its most recent price increase, which was implemented on March 30 of this year.
He reassured the interested parties that the Senate had not taken a position on the issue and that the report would be based on the memoranda they provided to the committee.
The Leader of the Senate, Ibrahim Gobir, who was representing the Senate President, advised the participants to be forthright in their presentations so that the Senate could make recommendations that would be in the best interest of all.
Abba Moro, who proposed the motion, argued that pay-TV providers should be careful with their bundle price.
According to him, the operator of DSTV and GOTV, MultiChoice, has more than two million subscribers.
He recalled the company’s several price increases since 2009 to the present.
Moro remarked, “MultiChoice raises prices without regard to economic reality and without embracing pay-per-view.”
“DSTV and GOTV would be committing rape against Nigerians if they persistently rejected the pay-per-view model, which may alleviate the hardships subscribers suffer.”
The National Broadcasting Commission’s Deputy Director of Research and Policy, Mr. Aneke Stan Onyebuchi, who represented the Director General, stated that the organization lacked the legal authority to supervise or restrict the continual price rises by cable television providers.
Onyebuchi stated, “Whenever MultiChoice increases its pricing and the NBC is worried, there are unfavorable reactions.
“However, the NBC Act merely grants it the authority to accept, assess, and investigate broadcast content complaints. Nowhere in the Act was the NBC granted the authority to regulate the prices of its services.
Therefore, he encouraged the National Assembly to change the NBC Act to give it the authority to regulate industry prices.
Director of Tax Policy and Advisory at the Internal Revenue Service, Temitayo Orebajo, stated that despite the challenging operating climate, cable TV companies are focused with generating profits.
He stated, “For instance, MultiChoice is concerned that substituting monthly billing with pay-per-view may decrease their earnings.
“However, the FIRS believes that the migration will not have an impact on their revenue; rather, it will result in an increase in customers.”
Abubakar Ladan, the representative of the Minister of Communications and Digital Economy, emphasized the need to change the NBC Act to allow the agency to discipline infringing cable TV companies.
In the interest of low-income customers, he stated, “We need to revisit the NBC Act in response to the dynamic and reality on the ground.”
Ladan, the Director/Secretary of the Frequency Management Council, stated that the government was doing everything possible to defend Nigerians’ interests.