The CEO of HiTV, Toyin Subair recently shared his experience on the collapse of a once vibrant business that appealed to thousands of football loving Nigerians. Mr. Subair disclosed that HiTV essentially collapsed due to a mandatory clause in the company’s shareholders agreement, which prevented HiTV from raising the required capital to renew the broadcast rights of the English Premiers League (EPL).
Then, the EPL was a major tool to acquire subscribers and it contributed to the company’s rapid growth. However, the lesson here is that procurement of rights, or content, especially from foreign markets, comes with huge financial implications. This largely explains why the company had to pull the plug on the deal, even when its subscriber base was growing.
Now, Nigeria is officially in a recession, with the key indicators seemingly spiraling out of control. Inflation is at an all-time high at over 18 percent, interest and exchange rates are very high while unemployment remains intractable. The quality of life and overall wellbeing of Nigerians have consequently dropped. One may perhaps wonder how existing operators in the pay TV industry have managed to stay afloat in spite of the harsh economic realities, marked by scarcity of forex, which inhibits the process of procuring foreign content that are denominated in dollars.
Even more worrisome for stakeholders in the private sector are the prevalent challenges of operating business in Nigeria. For instance, Erisco Foods, an indigenous company in the manufacturing sector recently announced that it may shut down its production in Nigeria if the dollar scarcity which is inhibiting the productive capacity of the manufacturing sector, is not quickly addressed. The company further disclosed that it may relocate its production base to neighboring countries, a development which may lead to significant job cut.
Also, leading telecoms operator, MTN, recently dropped about 10 of its brand ambassadors. The duo of Marvin Records artistes, Dr Sid and Tiwa Savage, including Don Jazzy, CEO of Marvin Records, were dropped from the list of brand ambassadorship. This may not be connected with the current recession.
Also noteworthy is the recent incident in the pay TV industry which threatens the relationship between MultiChoice and its subscribers in Nigeria. A few weeks back, there was a syndicated report published by a few newspapers of Nigeria’s exclusion from the list of beneficiary countries in the recent reduction in DStv’s monthly subscriptions fees across Africa. As a result, industry stakeholders have been at variance over the issue with subscribers calling for an extension of such gesture to Nigeria, which happens to be one of its biggest markets. MultiChoice, on its part, has refuted this claim, maintaining that despite the exclusion of Nigeria from the price reduction, Nigerian subscribers are not only dear to the heart of its business, but pay the lowest rate in Africa. According to reports, the DStv subscription fee reduction is a reflection of the existing socio-economic needs and peculiarities of various local markets.
From publicly available and verifiable records, in Malawi, where the DStv subscription fee for Premium was slashed by nine percent from 77 to 70 dollars, Nigerian subscribers are currently paying 48.68 dollars to enjoy the same package. What this implies is that despite Nigeria’s exclusion in the price reduction plan, subscribers in other markets still pay far more than their counterparts in Nigeria. This is also the case for the Compact Plus that was reduced by 15 percent from 53 to 45 dollars in Malawi while in Nigeria; subscribers pay a monthly fee of 29.43 dollars.
Perhaps the scenarios in the Ghanaian and Nigerian markets can also bring fresh perspective to the widespread speculation. For instance, the DStv Premium bouquet in Ghana, which originally was 91.33 dollars, was slashed to 84.40 dollars so as to give respite to subscribers in that country in view of prevailing socio-economic circumstances in that market. On the other hand, subscribers in Nigeria pay about 43.68 dollars to access the Premium bouquet. In a similar vein, subscribers in Kenya, Uganda and Tanzania pay 80.982, 83,302, 84.64 dollars, respectively, to access the DStv Premium monthly. Same applies to other bouquets such as Compact, Compact+, and Family.
Rather than embark on price increase in order to continue to maintain the rights to unique programmes in its stable, MultiChoice revamped its content to delight its customers on whatever bouquet they are. For instance, three new high definition channels were added to DStv Premium, while DStv Compact Plus gets more premium content channels. To further meet the needs of its customers, the company provided its Dstv Compact customers with more variety, quality and exciting new content. The content upgrade was part of MultiChoice recent campaign tagged, Business Unusual, which was designed to further delight the company’s teeming customers.
John Ugbe, Managing Director, MultiChoice Nigeria, while speaking on the enhanced value offerings, said: “This major boost in entertainment value across all DStv bouquets demonstrates our commitment to ensuring DStv customers receive great entertainment and best-in-class value. The price reductions in our state of the art decoders – Explora and HD Zapper – will ensure that great family entertainment is available to everyone at the most affordable price. We are all living in tough economic times – and while the everyday costs of food, water, power and fuel are increasing at an alarming rate, we recognize that there is still a need to take time to escape and relax with the family at home to enjoy quality and entertaining programmes from movies to sports, series, documentaries and a whole lot more.”
Admitting that the current economic recession is taking a toll on the private sector, Ugbe disclosed that MultiChoice, like many other businesses, is confronted with severe economic realities while expressing the hope that Nigeria will quickly recover from the recession. He added that MultiChoice offers a wide-range of content-rich products that are denominated in dollars, in view of the naira which has been devalued officially from N200 to more than N300, noting that the company has not increased its subscription fees since the devaluation of the naira.
“We have been absorbing costs on behalf of our subscribers since our content is bought in dollars, which is scarce and inaccessible for our remittance. For instance, we have been contending with overheads for more than a year, but we have managed to stay afloat due to support from MultiChoice Africa. That is where the economic downturn has left us. However, we are hopeful, like many other Nigerians, that there will be a speedy economic recovery due to recent uptick in the oil price and government’s current drive towards economic recovery,” said Ugbe
MultiChoice, in its latest move to further enhance value offering recently co-announced alongside the Consumers Protection Commission (CPC), the implementation of some customer focused initiatives, one of which was toll free lines for customers. Ugbe said the introduction of the toll free lines has improved the quality of MultiChoice’s services to subscribers, even though it is at a cost to the business.
“We have introduced these measures and this is why CPC affirmed us as the model of compliance after the implementation of different programmes. We will continue to work with CPC, including other key industry stakeholders, to ensure that our customers are served with the best entertainment content, comparable to global benchmarks.”
Undoubtedly, there has been a reprioritizing of needs by Nigerians as they are more pragmatic in the way they expend their limited and scarce resources. Most consumers are prioritizing their expenses, and seriously cutting down on luxuries in order to overcome these hard times. However, cutting the cord on pay-TV may not be an easy choice to make in the face of limited options to enjoy the joy and fun in living after a hard day at work and you want to entertain the entire family. It is noteworthy that the company is able to maintain subscription rates in spite of the very challenging operating environment.
Anthony Nlebem
Nlebem is a Sports analyst with BusinessDay
