Pay Tv
Sad Story of a Dying Industry

Why these sudden deaths?

In an interview he granted a Lagos based specialized journal about two years ago, former managing director of now moribund Trumpet Internet TV (TITV), American born Nathan Garner was short of shedding tears when he confessed that outside of MultiChoice, other Pay-TV Stations in Nigeria were only business spectators.

“We are nowhere at the moment; our numbers are so small that you couldn't calculate the market penetration. That's true of FSTV as well as Trend TV; all of these companies put together have no market share”, he had lamented.

Pay-TV subscribers have argued that the major reason why local Pay-TV Stations have found it difficult to survive in the country was not unconnected with content quality. This to a large extent could be true as MultiChoice had before now been enjoying an uninterrupted exclusivity in the matter of some foreign channels and content in the DSTV bouquet. Those channels are described as premium channels in broadcast and entertainment circles.

The SuperSports Channel for instance attracts the biggest patronage in the MultiChoice offering because of the station's transmission of the English Football Premiership as well as the European Championships. MultiChoice has exclusive right to transmit this South African Channel, a right other Pay-TV Stations in the country does not enjoy for now.
And because a greater percentage of the gross patronage rate of MultiChoice is

Industry observers are united in the agreement that the greatest threat to Pay-TV growth in Nigeria is the absence of appealing channels that could hold viewers captive. Sadly enough, some of these captivating channels can only be found in the DSTV bouquet promoted by MultiChoice. Yet, like their counterparts in the conventional TV Stations, the issue of content and programming have dominated discussions at several fora.

Fayose went further to argue that the debate about the exclusivity of Multi Choice Nigeria over some leading channels is both timid and extremely lame. “Clearly any channel that is on DSTV is always the most lucrative; if it is on the other Pay-TV platforms, it is considered unattractive and non-lucrative”, according to Fayose who claimed that the reason for this is because MultiChoice expends considerable resources, time and effort in marketing and building the brands of the channels on the DSTV bouquets.

The image-maker stated that in the past, MultiChoice had maintained that rights acquisition is carried out through open bidding and wondered why other operators who did not engage in the open bidding when the rights to channels were made available should still accuse the company of unfair practice.

Only late last year, Nigeria's Federal Government acting through the Minister of Information and Communications, Frank Nweke Jnr. took what could pass as the first practical step towards salvaging indigenous Pay-TV operators in the Direct-To-Home business in the country. After many years of prevarication, Abuja eventually broke the yoke of exclusivity in the country's DTH Pay-TV business.

The minister directed the NBC to inform all owners of various foreign channels or contents that had hitherto sold exclusive rights to MultiChoice by bundling Nigeria with other African countries, that the company could no longer buy rights on behalf of the Nigerian nation.

The NBC guidelines therefore, direct that “where existing agreements obtain, upon their lapse, subsequent rights acquisition agreement must designate Nigeria as a stand-alone territory; where exclusive rights exist, the holder shall not be allowed to exploit them except other licensees are given the opportunity to exploit or access them”.

Communication Trends Limited (CTL), operators of Trend TV reacted by commending government for the bold step in reversing the subsisting regime, describing the new measures as a way of creating a level-playing ground for all operators in the industry. “The regulatory agency's action would bring down the price of service in Nigeria as seen in other sectors of the Nigerian economy” the statement signed by CTL media consultant, Christ Nwandu stated.

The situation in other lands

About three years ago in South Africa, similar worries over MultiChoice's practices were addressed by the Independent Communications Authority of South Africa (ICASA), which was later to publish a “Discussion Paper” on an inquiry regarding subscription broadcast rights in South Africa. ICASA embarked on the inquiry to generate comments from industry stakeholders on a proposed introduction of a regulatory framework for the sector.

Any attempt to undermine the principle of exclusivity will have adverse consequences; less investment, lower quality and less content and ultimately a decrease in South Africa's role in African broadcasting”.

The submissions as shown above point to the fact that MultiChoice's intention had been to remain the one and only dominant Pay-TV company in all of Africa. Observers had argued that it is not surprising that the same marketing policy and strategy is adopted in Nigeria by the same South African firm. MuiltiChoice believes strongly that broadcasting is driven by content and programming, and that only stations with appealing contents and programming can survive.

ICASA submitted thereafter that “MultiChoice and M-Net also agreed that exclusivity does not necessarily restrict competition; it might be thought at first blush that exclusive contracts, by their nature, restrict competition. The fact that a contract prevents a provider from supplying another operator might appear, on the fact of it, to restrict competition”.

The report went further to quote MultiChoice and M-Net as submitting that, “First, it is important to distinguish between competition before the contract is signed and after. An exclusive contract restricts competition ex post…. as long as there is sufficient opportunity to compete for the contract itself, the exclusive nature of the contract should not be regarded as anti-competitive”.

Though ICASA claimed readiness to encourage fair competition in broadcasting business in South Africa, it added that it would not allow the industry to be controlled by foreigners.