Following the recent announcement by MultiChoice the parent company of DStv and GOtvof the increment in subscription fees, the social media and messaging platforms were flooded with messages calling for a boycott of DStv and GOtv come April 1st 2015 when the new tariff takes effect. The boycott campaign is a kneejerk response that is becoming typical of the many interventions on Nigeriaâs social media.
|Bouquet||Previous Price||New Price|
|DStv Compact +||N7,850||N9,420|
|Extra View (for DStv)||N1,800||N2,160|
For starters, Nigeria isn’t Venezuela where prices of goods and services are fixed by the state. The Nigerian pay television industry is guided by the principle of demand and supply. Hence, MultiChoice is right to charge what it thinks the market can bear. Folks who accuse DStv of running a monopoly somehow forgets that other pay- TV service providers DAAR Sat, StarTimes, My TV, CONSAT, etc.â€”operate in Nigeria. The question therefore is, why is there no effective competition? For all I know, it’s the responsibility of government and not DStv to engender competition. Also, you can’t blame MultiChoice for continuously providing cutting-edge products and services that have endeared the DStv brand to subscribers.
Few years ago, HiTV, an indigenous pay-TV operator, took the market by storm when it secured rights to beam 80 percent of English Premier League matches but it went bankrupt after just 3 years. Why? First, HiTV built his customer base around the live football matches, which broadcasting rights it had no control over. Compare this with DStv which owns AfricaMagic, M-Net and SuperSport channels. Nonetheless, DStv continues to repackage its bouquets to keep its customers happy. Secondly, HiTV got its revenue projections all wrong. Prior to HiTV’s coming, the EPL rights reportedly sold for $30m but HiTV bid and won 80 percent of the broadcasting rights for $115m, out of which $40m was paid immediately. They lost the rights when they couldn’t pay the outstanding amount as at when due. Even if banks had provided HiTV with loans, how would they have paid back with a customer base of less than 200,000 subscribers? Among other reasons, HiTV failed because it paid over the top for EPL rights and for not growing its content. No one should blame DStv for the failure of competitors to possess the wherewithal to compete.
Pay-TV operators are like agents, they pay often not in Naira for contents they don’t own. But then, monthly subscriptions are paid in a Naira that’s spiraling out of control. The Central Bank of Nigeria has devalued the Naira twice from N155 to N168 in November 2014 and to N198 in February 2015â€”in the last 6 months. It’s worthy of note that energy price is also on the increase.
Yes, it’s human for subscribers to want bargains but given current realities and the fact that MultiChoice is in business to make profit, it’s only logical that tariff increases. However, we can still ask questions. Is this increment commensurate? Will MultiChoice revert to old prices if and when the Naira improves? Well, I don’t hold brief for MultiChoice but here are facts. The Naira has lost ca. 28 percent of its value in the past 6 months whereas MultiChoice increased DStv tariff across all bouquets by 20 percent. Furthermore, due to the Ghana’s improving currency, the company last November reduced DStv monthly subscription fees. Perhaps, tariffs will be reduced if and when the Naira improves.
One demand that appears central to this boycott campaign is the introduction of the pay-per-view option. First, DStv doesn’t offer pay-per-view service anywhere as fallaciously stated by proponents of the boycott campaign. Due to technology revolution broadband, PCs, laptops, tablets, phones and the attendant changing consumption habits, the quality of internet-TV has tremendously improved in developed countries.
Pay-per view was therefore introduced to provide additional choice for folks who aren’t subscribed to a pay-TV service but who are occasionally interested in watching specific programmes like live games, television shows and movie series. However, the pay-per view option isn’t cheap and it requires broadband connection. American pay-TV networks, Showtime and HBO are reportedly prepared to charge a record $99.95 or ca. N20,000for a pay-per view subscription to watch the May 2nd fight between Floyd Mayweather and Manny Pacquiao. There is a huge chance you’ll get to watch the fight live on DStv if you are subscribed to the premium bouquet, which will now cost N13,980 from 1st April.
Itâ€™s worthy of note that DStv transmits via a downlink satellite signal and not broadband connection. Hence, it’s impossible for DStv to know whether you’re at home watching or othere is no-one at home to utilize the service. Currently, household broadband penetration in Nigeria is low and if telecom companies are to scale-up investments in infrastructure, broadband services aren’t going to come cheap. Pay-TV service is in fact luxury and not a necessity of life. During my 12 months stay in the university accommodation while at Newcastle University, I didn’t watch television because I found the annual cost, £145.5 or ca. N42,600 of a colour television license, required to watch only free-to-air channels, too expensive.