By Princewill Ekwujuru
In this interview, MultiChoice Nigeria’s Managing Director, Mr. John Ugbe, a graduate of the  Federal University of Technology, Owerri, examines a wide range of issues related to the pay-TV industry in Nigeria, including the critical need to protect intellectual property.

Congratulations on your appointment as the Managing Director of MultiChoice Nigeria. What is your assessment of the impact which MultiChoice has had on the Nigerian economy since inception?

Coming from 1994, that’s about 17 years, which is quite a long time. If you want to look at our impact on the economy, I think you will want to look at it from different points of view. One of the most visible would be in the entertainment industry.

Look at the film industry; Nollywood as it is to say if you trace the root of that industry, I think it brings you back to M-Net and by extension, MultiChoice. Back in the day when we bought local content, even before AfricaMagic, when we created local content for MMDS transmission, and then you move on to AfricaMagic movie channel, which has transformed Nollywood.

If you look at just Nollywood as an industry, as a Nigerian, your proudest moment is when you land in Kenya or any other African country, and the first guy you see says, “Oga.” You know, our diction, everything is quite popular across Africa.

A lot of it is from our AfricaMagic. Commercially, that is because M-Net has been one of the foremost organisations that paid for content out of this industry; they are not only paying for content, they also encourage the development of content through massive investment.

If you look at it from the point of financials, I think we have paid quite a bit of taxes and aided the development of the economy in over 15 years of operations.

In terms of people, we have close to 500 staff within the organisation and a lot more who have gone through the organisation who probably today hold important positions in other companies and institutions in the country. We have developed the human resource in Nigerian.

Then our supply chain has helped us to create entrepreneurial opportunities in the country, employing over 2,000 people, who provide sustenance for over 2,000 families. These are businesses that have been developed in conjunction with the company and the banks.

These are fully Nigerian companies, which are owned by young Nigerian entrepreneurs. The companies are a product of our enterprise development scheme through which we have empowered Small and Medium scale businesses in the country.

And from the corporate social responsibility point of view, we see ourselves as development partners. In education and health, there are different initiatives that we championed with our stakeholders and our communities.

In the area of education, our MultiChoice Resource Centre project has benefited 201 secondary schools in 21 states in the country and the project is still ongoing with plans to cover all the states of the federation. In the area of health, we have a subsisting partnership with the Sickle Cell Foundation, Nigeria with a major objective to assist in reducing the incidence of sickle cell disease in the country.

As much as we can begin to put numbers around that impact, I think from an M-Net point of view, over N15 billion has been spent on content in the last 10 years. SuperSport is at the forefront of developing Nigerian football.

From the live coverage of the Nigerian Premier League and the DStv Basketball League which we sponsor, to the promotion and coverage of other local sporting initiatives; we could go on mentioning so many initiatives that have had far reaching impact in Nigeria.

Yes, we’ve been a very strong partner in developing Nigerian content, Nigerian sport, Nigerian people and the Nigerian economy.

A lot of multinational corporations complain about the challenges of operating in this environment. What are the unique challenges that MultiChoice faces in operating here and how is it surmounting these challenges?

For one, we face some of the challenges other businesses face. Challenges such as infrastructure, we’ve got offices we need to power, and we are also in a business that needs to be on 24/7. People cannot accept any downtime from us. We are also prone to the infrastructure challenges that affect every Nigerian and we spent quite a bit to build our own infrastructure to be able to provide world-class service.

Also, piracy is a major challenge in this market. The protection of intellectual property is a challenge that we face. Piracy is a big challenge but we don’t see that challenge as ours alone. We see it as a challenge for the entire entertainment industry.

We believe that the Nigerian entertainment industry is at its infancy. That is something that needs to be fixed to protect artistes, particularly the young ones. You know it’s an industry that is growing, that takes the focus away from the traditional sectors such as banking industry and the others. Piracy is a major concern, something that we will like the regulatory body and the government to focus on. Intellectual property is not as respected here as it should be.

When we talk of piracy, MultiChoice is not into the business of selling CDs of movies and music. How does it affect your organisation?

Our sister organisations are into content business. With content, it’s intellectual property. For you to put a value on content, it needs to be protected. It needs not to be readily available on the streets. A situation where you have movies that were released yesterday freely available on our streets is a challenge.

Also, as a country, it’s a problem for us because it doesn’t help us internationally, and we  fall short of a lot of opportunities internationally because of perceived non-protection of intellectual property. There is also pirate activity in the satellite TV industry.

There is a need for government or the regulatory body to support initiatives that stop that. Don’t forget that we, as a body, are regulated by the Nigerian Broadcasting Commission, we pay licence fees, we trade legally in Nigeria so we are subject to fees and that’s an obligation we have never failed; but the pirates do not aid the economy, they more or less destroy the economy and that’s a key challenge we face.

What is the addressable market for TVs and other non-TV devices which DStv content could be screened to?

When we talk about addressable market, there are a few factors that affect that. One, we talk about population, we have a large population here. The other is the financial part of the economy; it’s not everyone that can afford it.

However, we often make the mistake of using our population as the index but we need to consider how many people are in a household, so by the time you whittle down the number with how many people in a household and you look at income, that number does come down.

I possibly can’t give a fixed number but it’s a large market. If you extrapolate against other countries, we still have a large addressable market, but still you really can’t begin to compare with countries in Europe where the average income is high and they have higher GDPs… but yes we see a lot of positives as well, there’s a big market and we are growing as the market grows.

Do you think screening DStv content on several platforms like phones and tablet computers would help to deepen the market further?

Absolutely, we were the first to introduce mobile TV into the market (that is DStv mobile) and we are in tune with this market. We know people could be stuck in traffic for hours and during the World Cup we made a push for mobile TV option so that you didn’t miss your favourite matches.

With the launch of the Drifta, we have moved on to providing mobile TV right down to your iPad or tablets as a way to increase the amount of screens that are available to the consumer, we leave you with a choice of where you watch your TV.

There is a plethora of sports programmes particularly football on DStv but there seems not to be enough channels to screen these matches. Are you considering launching more SuperSport channels in order to screen more football matches?

I think we have continuously increased the number of sports channels on the bouquet right down to being the first to launch a wholly Nigerian sports channel on our platform. But right now, we are beginning to ask questions like, what should Nigerians’ favourite team be?

Should it be the team you can go also to see here in Nigeria and support passionately or should it just be only the team out there? Our key focus is to take Nigerian football back to where it was; we are doing a lot about that, we have Nigerian games live and as much as possible, we have the platform for the live coverage  of as many matches as possible.

I mean, during the World Cup, we had every game out there live, we have the Olympics coming up and we would create additional channels to broadcast a lot more content. Within reason, we would provide as much live content as possible but we will also lay emphasis  on our own local content, we want that passion for the Nigerian league to return.

MultiChoice in the recent past has made substantial investment in Nigeria in promoting local content. Do you think there has been a commensurate return on those investments? Are we going to see further investments or we’ve reached a plateau?

Unfortunately not, you know we almost have to take a dual approach, both business and CSR because it is not a purely business decision… it’s really about our interest and love for what we own. In terms of returns on investment, I wouldn’t say we have those returns right now but we look forward to building and growing that content as it gains more followership.

Does this mean we should expect a form of plateau or the dwindling of your investment in local content?

No. I think, we are at that point where we are coming up with new initiatives and our sister company, SuperSport, has recently acquired two OB vans and it’s a massive investment that was put in to enable us broadcast a few more games simultaneously out of Nigeria.

We have invested in lots of training for our people here; it would interest you to know that we even have our staff now going to neighbouring countries around Africa to cover matches live. At every point, we are also an African company so often times, if people only complain about those expatriates that have come here, we must be careful, we also have Nigerians working in other African countries.

We see MultiChoice as an African company with an African heritage so there’s a lot of movement around. There’s no plan to stop the investment and we are keen to work with regulators to make it even better.

The issue of pay-per-view has been discussed several times with many subscribers saying that the option may be preferable because they do not get to watch their TV as a result of inadequate power supply. What fresh perspectives can you bring to this issue? Is there a system that will allow subscribers pay for only the content they consume as it is with mobile phone subscribers who pay for only the airtime they use?

These are two different business models and it’s a challenge when people tend to confuse the mobile phone industry with Pay-TV; we are a broadcast industry and it’s a bit different. The concept of pay-per-view is a bit different from the pay TV business though they merge at some point. Let me explain.

First, your decoder does not talk back to the satellite, it’s a one-way communication so we have no way of knowing when your decoder is off.

Second, content providers don’t sell their content and say since you have 1,000 subscribers, when five of them are not watching, we will reduce your cost or boost your cost when you have a full house, that doesn’t happen.

Third, satellite costs are fixed and we buy a spectrum to transmit and that cost isn’t going to reduce or increase. It’s a different model, maybe we don’t value some of the things we get. For instance, when Manny Pacquiao was to fight in the US, it was on pay-per- view.

What it means is that though you already have pay-TV or cable TV – which you are already paying for on monthly basis – you pay extra just to watch that fight but from us, you got to watch that fight as part of your package. You were not asked to pay extra fee to watch the boxing fight

A fair comparison of this business with the mobile industry is comparing when someone leaves their phone on for a full month and runs the bill, that’s when you can compare. But I say that they are two different business models.

We also wouldn’t want to switch off for some time and tell our subscribers that we didn’t have power and then try to refund. We have PVR decoders with which you can record different channels when you are out of the house and watch the recorded programme when you get back home; how does the mobile phone model accommodate that?

Hopefully the issue of power is not a permanent problem for us in this country and so we can’t begin to adapt our lives to having no power, rather we should fix the power and enjoy our lives. Different businesses have different models, just like asking for jollof rice without the onions so you don’t have to pay for onions.

You have to put it in there to cook the rice, there’s no way to extract the onions or the pepper so you can have yours without the onions or pepper. It’s part and parcel of the business. Maybe if we can get more people to understand what our business is about, it’s a business of numbers and patience, which is staying in the business for a long time before you begin to see returns.

**We know how difficult it is operating in Nigeria but of course we also know as well that the return on investments (RoIs) could also be high for corporate organisations which get their act right. Which major policy or development do you think has the most impact on your organisation if properly implemented?

Look, the government is encouraging foreign direct investment into the country and we have kept faith with the country even when it wasn’t a democracy and things were a bit more difficult. What we want to see is not just one policy but policies that encourage investment to continue because in our business we continually invest.

We buy  content continuously and it’s also a business where the cost input goes up and not down and we have to continuously invest, create content, hence just a  good investment environment and regulatory policies that encourage us to stay in business and delight Nigerians and not restrictive ones that tend to squeeze us.

I can’t really think of one thing right now that would make us begin to soar but I think it’s a combination of actions like one, there’s a friendly environment and once infrastructure gets better, I think it would suit every business.

Would you consider IPTV disruptive to your content operating model? If so, by how much?

It’s a disruptive technology but as an organization, we all are still looking at new content and new content delivery models. We are also looking at what we can offer from an IPTV perspective and what disruption that would bring to our business.

We are part of a large group of companies who have proper experience delivering content over the internet, over IP, so we welcome new technology, we don’t fight it. However we need to look at the challenges here, the broadband challenges in Nigeria and while we are hopeful that these will be fixed, they will obviously not be fixed in one day.

For now, satellite remains the most reliable technology. It’s obvious that satellite wasn’t invented yesterday but it’s still one of the most reliable technologies. You don’t wake up every day and hear that one satellite just fell off the sky. It’s the reliability of that technology that has kept different models of business going.

How about the potential of IPTV for cost reduction and hence subscription fees reduction?

We are always looking at ways of reducing cost but like I mentioned, it is also important for us to mention that content tends to get more expensive every year and that impact heavily on our business and that’s why I said if we begin to protect our own content here, there will be a lot more value to it.

The musicians today are richer than the musicians of the past in this country. That should tell you something. To book one of them today to perform for you, you pay in millions; that wasn’t happening five years ago. What’s happening is that their fees keep going up and that’s content for you and that’s what we have to put together everyday. We try to do it effectively and at an affordable rate.

Another of such disruptive technologies is DTT and a few companies operating on that platform have launched in Nigeria. How much of a threat are DTT content providers to pay-TV operators like MultiChoice?

It’s competition. DTT has existed in other parts of the world. Don’t forget that DTT is progress from the analogue transmission, which we also had in this country, we transmitted from analogue in the past and we have since digitized.

It’s not a foreign technology for us, we are already on digital technology on DStv. It’s competition and we welcome it as it grows the entire industry. From MultiChoice, there’s an opportunity there and we are keen to be a part of that market but DTT was not invented yesterday, it progressed from analogue technology.

**Many pay-TV operators have launched and folded up in quick succession but MultiChoice has remained strong, perhaps stronger over the years. What would you say is your survival secret despite the crash of several indigenous pay-TV companies?

Point of correction, we are indigenous. We can’t speak for them since we don’t work there so we can’t say why they may have had issues. We can only talk about our business and like I said earlier, you have to be patient in this business, it’s not a business where you see quick returns and we have kept faith with the market.

Where you have seen us growing doesn’t mean we were amassing huge returns and keeping it, but there’s a process of investing in and building the market and that process doesn’t ever end. We are in for the long haul and we’ve always said that. Definitely, you must give credit to us as a Nigerian company for having stayed alive, I guess there are also others out there who are surviving.

MultiChoice is a multinational and that gives it an edge over indigenous organizations that are trying to start up. We were referring to companies like HiTV becoming big here and going to launch in Ghana.

I can ask you a question, how would you feel if UBA in Ghana was closed down because it was perceived as a Nigerian company, even with Ghanaian shareholding? We must be careful when we go into this whole Nigerian thing, it almost begins to affect other Nigerian companies in the process of going into Africa…, the banks for example that are expanding.

There are a lot of Nigerian companies that are expanding into other countries. What do we want the Ghanaians to do to Nigerian banks in Ghana? Chase them out, because they have a Nigerian heritage? We won’t welcome that, I guess we have seen in the press in the past about some Nigerian traders in foreign countries complaining about unfair practices used against them hence we need to be very careful on how we bring up the perceived “this is Nigerian, this is not Nigerian” argument.

We are a company that hires Nigerians; we have a big value chain in Nigeria owned by Nigerians with families who are Nigerians, with staff strength of more than 99 percent Nigerians who get paid consistently, so how more Nigerian can we be? I think we have kept faith with the people, the country and everything here.

We are regulated, all our practices are in the normal line of business and we mustn’t take away from the people who work in the company. The success of the company is due to the hard-work of the people who work for the company and they are mostly Nigerians and we can’t say because it’s a multinational that’s why the company is successful.

Multinationals fail too. Nigeria is growing and indigenous multinationals are springing up here as well that could reach all around the continent. Oando for instance is listed on the Johannesburg Stock Exchange, we wouldn’t want their shares dumped just because it was perceived as a Nigerian company listed there. The Ghanaian operations of most of our Nigerian banks have Nigerian MDs.

This is the first time in it’s over 17 years of operating in Nigeria that a Nigerian would lead its operations in the country. Are we going to see more Nigerianisation of MultiChoice Nigeria?

That tends to take away our African feel. We see ourselves as being able to integrate cultures from around Africa, so at every point in time it’s to our credit that we are able to get some of the best skills from around the continent.

The focus for us is how we can promote Nigerian content so yes, we would Nigerianize more, we hope to have a lot more Nigerian content on DStv and I think we are the envy of other countries right now that’s why we have to be careful we don’t make too much noise about it because you can imagine how you would feel if you were from another African country and the last three winners of Big Brother Africa were Nigerians, we might as well rename it Big Brother Nigeria!

Think of it, if you were from Ghana would you even vote or want to watch it? I think the company is very Nigerian and from a group perspective there’s a lot of focus on Nigeria.

Continuation of MultiChoice Nigeria’s CSR initiatives?

Absolutely. I think from next year for our project where we work with schools, the MultiChoice Resource Centres, we will be increasing the beneficiary schools by 40. Currently we have 201 in 21 states and we would be adding 40 annually.

Now for us that’s a very important project because it’s the kids that would be the basis for forming the new Nigeria and its exposing these kids from mostly disadvantaged public schools to proper learning aids, that may just make the difference.

There’s nothing like teaching the kids about a Tsunami which is difficult to do but on Discovery Channel, they actually can see what it is and there’s no better learning experience than seeing it. That’s a project close to our hearts and we are still planning to increase the beneficiaries.

Our partnership with the Sickle Cell Foundation, Nigeria is still ongoing and last year we developed an awareness video to educate Nigerians about the scourge. We still adopt schools and there are a few other ones we are continuously looking at, it’s not a closed scheme, we look to see how we can improve and stay in touch with our communities.

What should Nigerians look out for during your tenure as Managing Director? A few years from now, when you look back, which areas would you love to say you impacted the most?

We are here to entertain people and a lot of what we do supports that. For us, its key that we impact the community positively, that is, our stakeholders, so our emphasis is to bring the best entertainment in the next few years to Nigeria while developing the very best out of here with an emphasis on making sure that the best out of here is shown around the world.

Who is John Ugbe?

I am from Cross River State in the South-South, I am married with 2 young and active boys, I read quite a bit and I enjoy working with people. I joined MultiChoice quite early in my career and spent my formative years here before moving on to a subsidiary as it was then, MWEB, which was in the Internet business.

So, for the last six years, I have been in the Internet business from MWEB to iWay Africa and I have been building and developing the business of people and also trying to get Nigeria more advanced in the Internet world. I believe in Nigeria and Nigerians and the skills we’ve got here.

I look forward to impacting people’s lives because I think that everything you do should have a positive impact on people. I am originally an Engineer and I have an MBA from the University of Liverpool and that’s probably more in line with what I do now. I am originally a Computer and Electronics Engineer from the Federal University of Technology, Owerri.