MultiChoice, StarTimes, others reject pay-per-view subscription model
MultiChoice, StarTimes, and other broadcast communication stakeholders have rejected a proposed pay-per-view model for pay-tv at the one-day public hearing organised by the Senate Adhoc Committee led by Sabi Abdullahi, Deputy Chief Whip of the Senate on Wednesday.
The Stakeholders including a major cable television firm in the country, MultiChoice Nigeria, said the pay-per-view model being proposed by the Senate against the current monthly billing, was difficult to implement and would harm the economy further.
They also state that the current harsh environment which firms were operating under in Nigeria, was not making it possible for the firms to reduce their prices.
Apart from Sabi Abdullahi, other members of the Committee are Senators Michael Nnachi, Suleiman Abdul Kwari and Abba Moro, who moved the motion for the Senate to investigate the incessant price hikes by cable television operators.
John Ugbe, Chief Executive Officer of MultiChoice Nigeria, who disclosed that for the past 27 years of their operations, they have been licensed that the free market economy is not favourable to pay-per-view. Pay TV operators, like others, should have the freedom to determine their prices.
“While it may appear that this Committee is concerned about the rising cost of subscription services, the Pay-Per-View (PPV) model being proposed will not benefit either the consumer or the industry.
“It appears that due to some misunderstanding of the basic definitions and distinctions between some of the existing operational business models in telecommunications and pay-tv broadcasting. A PPV is not the same as a Pay-As-You-Go subscription (PAYG).
“The PPV model allows a subscriber to watch some special one-off events, usually of the high-ticket variety in sports and entertainment, by paying for such events in addition to having an active subscription.”
Ugbe also claims that PAYG allows for a metered mode of service, in which consumers are only billed for the services they use, rather than for a set period of time.
The desire by this Committee to adopt PPV is further challenged by the non-existence of any technology that can detect and or determine the viewers are tuned in per time.
“Once it is impossible to have this knowledge, billings based on ‘per view’ become difficult if not almost impossible.
“It is therefore my humble submission to this distinguished committee that due to the nature of content acquisition and technological limitations that PAYG model is not practical for broadcasting and thus is not practiced and basically cannot be implemented anywhere in the world” Ugbe added.
Ugbe attributed MultiChoice’s constant price increases to a variety of factors, including inflation, programming content costs, broadcast transmission facilities, and massive investment to innovate and keep up with technological changes.
Anti-piracy costs, security costs, marketing and operational costs, exchange rate fluctuations, tax, regulatory fees, and cumulative national and local levies are also factors, according to him.
He goes on to say that some of the unfavorable economic factors mentioned above have not only had an impact on pay-tv subscription costs, but have also generally resulted in significant price increases for a variety of goods and services, from necessities like food, transportation, clothing, healthcare, and educational services to other consumer goods like gasoline, building materials, cars, etc.
Furthermore, Bright Echefu, Chief Executive Officer of TStv, and Tunde Aina, Chief Operating Officer of Startimes, stated that even if a PPV model is not feasible, Cable TV operators could adopt pay per day models to alleviate the suffering of low-income subscribers.
“PPV is not feasible but we came up with pay per day. We also allow our subscribers to choose the package based on the number of channels they want to watch,” said Echefu.
Emeka Mba, former Director-General of the National Broadcasting Commission (NBC), said the issues of PPV and Pay-TV pricing, does not amount to an important regulatory problem worthy of the Senate’s intervention.
“As Harvard University’s Kennedy School of Government, Prof Malcom Sparrow famously said in his book ‘The Regulatory Craft’, regulators should pick important problems and fix them” he added.
Anete Onyebuchi, Deputy Director, Research and Policy at the National Broadcasting Commission, who represented the Director General said the agency had no enabling law to either regulate or control the prices being charged by the cable television operators.
“There are negative reactions whenever MultiChoice increases its price and the NBC is concerned.
“However, the NBC Act only gives it power to receive, consider and investigate complaints regarding broadcast contents. Nowhere in the Act was the NBC given powers to regulate the prices being charged on their services,” Onyebuchi said.
He therefore urged the National Assembly to amend the NBC Act to give it powers to regulate prices in the industry.