‘Our objective is to grow Nigeria’s entertainment industry’

The best of African journalism assembled last week in Dares Salaam,  Tanzania at this year’s MultiChoice-CNN Africa Journalist Awards to  announce and honour winners of awards in different categories including,  the prestigious African Journalist of the Year. On the sidelines of the  events leading up to the awards nights, a number of select Nigerian  editors sat down with Nico Meyer, chief executive officer of MultiChoice  Africa, to ask him about the company’s operations, with some specific  questions about its Nigerian business. Phillip  Isakpa, BusinessDay executive director and editor,  was one of the select editors and he put a few questions to  Meyer.

Q: Ebola is currently a hot topic. What is MultiChoice, as an organisation, doing to raise awareness of the issue?

Ebola is an problem the entire world is currently facing. As an organisation, MultiChoice produced an educational video that highlights the threats Ebola poses and the preventive measures that need to be taken. This video is being broadcast on all our platforms. Through our platforms, we are disseminating information about Ebola and aiding the fight to stop its spread.

How is  MultiChoice coping with the enormous problem of piracy and trying to solve it?

A: A good place to begin is to explain what the effects of piracy are. The first thing I must point out is that piracy destroys the entertainment industry because when content becomes available for free, it prevents revenue flowing back to the producers. That is not a sustainable model. So, MultiChoice takes piracy very seriously because we want to protect the entertainment industry and we want to protect our business. We have teams on the ground fighting piracy.

Piracy comes in various forms and the most significant initiative that we are busy with currently is an exercise in which we are swapping-out decoders. The old, legacy decoders, which were easier to pirate the signals from are being swapped with new and more secure decoders. This process will take a few months to complete, but it is a significant shift in terms of fighting piracy.

A second aspect in the fight against piracy is that MultiChoice works with local governments because the battle is not ours alone to fight.  In conjunction with the police and backed by legislation, we are combating piracy. We are not only fighting piracy in one market, but in all the markets in which we operate. Pirates have the ability to touch the entire continent and our belief is that piracy needs to be attacked from all angles. We are also working with international law enforcement agencies because some of the pirates operate through international networks. So, piracy extends beyond our continent.

How would you react to the growing perception that MultiChoice has become a monopolist in Nigeria through unfair practices?

The African continent is a highly competitive one. There are many operators on the continent and several new operators coming up. In Nigeria, you have StarTimes and ConSat. There is also a perception that competition is only on satellite. Competition is also on the terrestrial platform and competition is also growing on the internet via over-the-top (OTT) services.

MultiChoice sees a lot of competition and the question is: ‘What does competition do?’

At MultiChoice, we believe that competition stimulates the market and you must have noticed that in Nigeria. There is a lot of competition around local content, a lot of competition around programming, and at the end of the day, it is actually the consumer that benefits. Our view and we have witnessed it, is that competition in a market stimulates growth and that stimulates the industry. Overtime, what will happen is that the industry in Africa will grow and branch out to the rest of the world. That is the position that we at MultiChoice want to be in. We, therefore, are not a monopoly and do not encourage monopoly in any way.

Nigeria must be a significant market for MultiChoice. What are your plans for future investment in the Nigerian market in order to maintain your leadership position?

Nigeria has 170million people and by all comparisons, it is a significant market. For us at MultiChoice, we recognized the significant growth potential of Nigeria in the 1990s, so we began investing in Nigeria over two decades ago. We have set up local partnership in-country many years ago and have put a lot of infrastructure on ground. Our investment is not limited to offices, but also includes the networks we have built up in Nigeria. We have invested significantly in studios. We will continue to invest in Nigeria as we have done over the past two decades.

Are there new things that the market should be looking forward to in the immediate future?

We pride ourselves on staying at the leading edge of technology. The products that MultiChoice offers utilise world class technologies. Recently, we launched a product called the DStv Explora, which is a PVR product similar to the America Tivo box but much more advanced. This particular product has significant future possibilities and we will continue to expand its usage. One of the recent launches we have had in relation to this product is the DStv BoxOffice, which brings a video store into your home. It also lends itself to a lot more that will unfold in future. The DStv Explora sets the platform for a lot of interesting features still to come in the next 12 months.

At the 2013 CNN MultiChoice African Journalist Awards in Cape Town, one of the questions you had to address had to do with pricing. There is a perception that your prices in Nigeria are higher compared to other markets. Between then and now, what have you done to either address the issue or explain it better? And do you get a sense that subscribers are accepting of your explanations?

The question of pricing keeps on coming up and I keep on explaining. For Nigeria and everywhere we operate, our prices are available in the public domain. If you do a comparison around the pricing, you will find out that our pricing in Nigeria is among the lowest in the market. However, what is more important is how we reach various segments of the market. The approach MultiChoice has taken is to introduce different bouquets. We have price ranges equivalent to about $71 in Nigeria, but it also goes down to less than $10 on other bouquets. This allows different subscribers get different product sets.

I think it is important to recognise that MultiChoice buys international content and international content comes at a particular prices. That is why we make certain content available on certain bouquets, but we have to make certain recoveries against such. Otherwise, it will not be  a feasible business model.

In terms of addressing the recurring question about pricing, our prices are available on the websites for the various countries in which we operate. Subscribers are welcome to do the comparison themselves. We are also continually improving the websites to make it easier for subscribers to access information relating to pricing when they want to subscribe to any of our products. It is a very transparent process in terms of finding the prices of our products.

I have also heard you speaking of doing more with local languages in Nigeria, perhaps venturing into Pidgin English content. How far have you gone with that process?

Local languages such as Pidgin English are very important to us at MultiChoice, but we want to get the balance right between international and local content. This is something we are working on and soon, you will see what I am talking about.

MultiChoice has an initiative through which it funds local content production. Can you tell us specifically what you have done in Nigeria? Secondly, what is the aim of the Let’s Play initiative?

In terms of MultiChoice CSI programmes, i.e. investment in communities, we have several initiatives, but I will speak of two, one of which is the Let’s Play Initiative. We believe that if we can get children to be active, their learning and development will be stimulated. Through the Let’s Play Initiative, we distribute footballs to children and run clinics to get them involved in sport at an early age.

Secondly, we also run the MultiChoice Resource Centre (MRC) programme because we believe that education is key to the development of Africa.  The MRC programme is aimed at introducing audio-visual learning technologies via digital satellite television supported by other equipment such as DStv decoders and video recorders. Integrating these programmes into students’ curriculum helps to enhance both teaching and learning processes in schools. The education bouquet consists of seven channels: Mindset Learn, Animal Planet, BBC World, Discovery Channel, History Channel, National Geographic Channel, and ED Channel. At the moment, we have rolled-out over 1,500 of these centres across the continent.

As I had mentioned, we want to get the balance right between local and international content. Our local content initiatives revolve around the AfricaMagic  programming. AfricaMagic programming comprises of the local content we buy as well as commission for production.  That is important to us because it enables us bring local content to the market that is relevant.

At launch, DStv was considered an elitist product. But now, with the growing Nigerian economy and the pricing system, it has accessible to more Nigerians. Given the state of the poor infrastructure and lack of power in the country, why is it not possible for MultiChoice to introduce pay-per-view?

On the issue of pay-per-view, it is important to state that content providers sell the content on a monthly basis. Contracts extend over three to five years, but we pay for the content on a monthly basis. So, the contracts themselves are not conducive for a shorter term.

Secondly, it is the norm internationally that these contracts run on a monthly basis and extend from the content suppliers, so we are bound by that. From an administrative perspective, it is also easier to manage. You can imagine how tasking it would be to switch on, switch off and switch-on a subscriber. Administratively, it is a huge challenge. You made reference to the power situation in Nigeria. If someone is without power for about three days, there is no way for MultiChoice, a pay-TV operator to know if someone is without power. We need to make sure that our services are available 24/7 and that is based on how we procure the content (as I have mentioned) on a monthly basis. It is extremely difficult and also in many cases not possible based on the contracts we have with our suppliers.

That said, the movies on offer through the BoxOffice service that we have launched in the Nigerian market can be procured on a movie-by-movie basis. To some extent, the contracts that we have with those suppliers are on a movie-by-movie basis and we did bring that to the market. In terms of a general offering, our content suppliers don’t allow, hence we can’t extend same to the subscriber.

Again, it is important to note that what you refer to as pay-per-view internationally is used when special events like boxing bouts are paid for in one-off situations. The payment is one-off. This is usually in addition to the regular payments. This is also more expensive for the consumer. Some of the big international bouts we watch on DStv as part of our regular offering attract additional payments in some other places.

With the rebasing of the Nigerian economy, which has shown the potential of the entertainment industry (contributing 1.2% to the GDP), how will MultiChoice take advantage of this by increasing its investments in the local industry?

As I said before, our overall objective is to grow the entertainment industry in Nigeria and we have been doing so. I believe that the initiative that we have in place in terms of our investment in local content and growing of the AfricaMagic properties are part of the ways we are contributing to the growth of the local entertainment industry. There has to be a balance as to how much we invest and what we can charge for our services. Our investments will continue to be as we have demonstrated over the last ten years with AfricaMagic; investing in local content.

When it rains, subscribers experience signal loss.  Isn’t there a technological solution to that problem?

There are two important issues to note regarding loss of signals when it rains. One, we link-up from a satellite in Spain and if there are natural activities such as rain in Spain, potentially the signal can be lost there. What we have done to manage this is to put redundancy in. If there are potentials for nature to intervene, we switch to the second so that the signal is not lost. That part has been taken care of.

The second issue has to do with when there are torrential rains in Nigeria, which interfere with the signal when the dish communicates with the satellite. It can be reduced if a subscriber has a very good installation exactly pointing at the satellite. Remember that the satellite is 36,000 kilometers away, so it is important that the dish points exactly at the satellite. But what we have done in the last 12 months to curtail this challenge is to increase the power from the satellite, particularly on some of the sporting channels to prevent possible loss of signals. However, it is extremely difficult to completely fight the power of nature, especially if there is extremely strong rain coming down.

Content acquisition must be one key area that MultiChoice focuses on. Can you talk about some of the challenges that you face in content acquisition, as you consistently try to broaden your content offering?

Our biggest challenge is determining if the content that we offer is relevant. It is not only about high quality productions, but also about the relevance of the content. It is relatively easy to bring high quality content with great pictures and sound, but consumers or subscribers are much more sophisticated. They want content to be relevant.

Our main focus is on understanding the market as to what the most relevant contents are; what actually resonates with the consumer. That is where we spend most of our time. International content is readily available and you can measure its performance in other markets, but the fundamental question is: How relevant is it for the Nigerian market? That is where we spend an enormous amount of time.

If relevance is key to content acquisition in acquiring content, what factor takes priority – relevance or cost?

Relevance and costs are interlinked in finding the right content. If we find the right and relevant content, we will invest in them.

What has MultiChoice done to educate producers not to use foul language in movies aired on AfricaMagic?

That is a very good question and we continue to pursue options to eliminate foul language. For channels that speak to families, there is a crusade to eliminate foul language and we communicate this to our production companies. Our approach has always been that we discourage programming with foul language because they do not promote the culture of the African continent.