Mr. John Ugbe, Managing Director, MultiChoice Nigeria, challenges the notion that his company is a monopoly
THE long running narrative in the industry is that your organisation is a monopoly, designed to stifle and kill competition. How do you respond to this?
Well, I think if we go back to the definition of the word monopoly I could talk for a whole day. Just using that definition alone actually proves that very wrong. We’re in an industry where there is competition.
Not only is there competition for us because we play in a market where the user has a choice, we’re also not a public service, say a power company, where there is a particular zone the cable is for company A and everybody buys from that company. So, we operate in an industry where there is competition from the perspectives of different people being able to fully make choices about who to buy from.
Also, there are many channels available to each of the competitors to buy and put together to offer a service. I think we tend to look at it from the positives we see in it. I think our competition is not how we can compete with everyone to buy, but we’ve been more of a company that believes in creating. And in creating, you have to invest not just time and money, but a lot of effort. In creating, you then also perform a dual role of developing.
There is a bill before the National Assembly that seeks to break the monopoly of MultiChoice. If that bill eventually scales through, what impact do you think it would have on Multichoice and the industry as a whole?
I think the first question is how do you break what doesn’t exist? But in every village, you always find some alternatives. Some of these may just be local brews by the person who is selling Coca-Cola.
That, in itself, is a choice and I think that’s the same with our industry. There is a bill and we’ve always said we welcome competition not just in Nigeria. We’re a global company. We welcome competition everywhere we operate and we always try to engage and provide a deeper understanding of the industry. I think the challenge, perhaps, is that we haven’t been able to tell enough about how the industry works.
One of the arguments brought up by the National Assembly is the need to crash the price of subscription. Is that possible?
As a business, the price of your product is proportional to the size of the market. So, as a business, we’re always looking for how more efficiently we can serve the market, the best price we can sell the products because we want to grow. If you look at the transition of the business over the 21 years since we started, you’ll see the business coming from where it was only one subscription buyer right down to today where with N1, 500, you have access to over 40 channels. Even with GOtv at N1, 000, you have access to exciting channels.
So, we have continuously reduced our prices over the years and the business will continue to look at innovative ways of doing this. However, we’re a responsible business, as we have shareholders and different stakeholders. So, we have a responsibility to our stakeholders so we’re not going to take our prices down to where the business is no longer viable or the business folds up.
The lawmakers complained about what they consider rigid subscription rates. What is MultiChoice doing to address this?
I think you’re asking of the pay-per view window. I think one of the challenges is that people haven’t really understood what pay-per-view is. I give you an example. If Manny Pacquiao is going to have a big boxing match in U.S.A, it would be available on pay-per-view. If you’re in the U.S, you would be paying your monthly subscription, which could be anything from $50-$100 or whatever.
Subscription in Nigeria
The fight would be on pay per view for $70, lasting just two hours. That fight alone would cost you say $70 to watch. So, that is what pay per view is. Your subscription, which you pay monthly, will not give you that fight. But guess what. We bring you that fight as part of your subscription in Nigeria.
People have complained about power and I think you know as Nigerians, we feel that it is something that we must all collectively work on. However, with satellite technology, we cannot confirm whether you’re at home watching DSTV or not.
So, it’s not even possible technologically for me to stop the kind of billing when you’re not watching because your decoder doesn’t talk back to me to say you’re not watching at this time or that time. On the other hand, the model of pricing is we have caters for some kind of aggregated pricing. The business model of pay-TV is very different from the business model of the telecoms, where you can argue that there is per second billing.
One of the issues raised by the lawmakers is the need for MultiChoice to resell some of its premium content to competitors, which the lawmakers assume will now bring down prices. Do you see this happening?
Well, like I said, I think our efforts have been in developing. Our sister company, SuperSport, invests a lot in developing the Nigerian Premier League. May I ask you when you watched the Nigerian Premier League. We all know the problems in the country with security, with infrastructure, etc. We go to great length to service this industry. You know when Nigeria qualified for the Olympics, everybody was happy. Let’s take the basket ball story. The game was completely dead. We then, as MultiChoice, offered to sponsor the basketball league. Not only did we sponsor the league, we ensured that we still provided many facilities. I would ask you to go and look at the collegiate players in U.S.A in the last five years
It is also widely believed that Nigerians pay more than other countries in Africa in terms of subscription. Is this real?
For me, it’s not real. We’ve always maintained that we’re an independent company. As MultiChoice Nigeria, we’re an independent company. We would set our prices with the realities of our market. I think even the internet has made it possible for anyone to log on today and tell me how much a bottle of Coke sells for in the UK and elsewhere.
It’s the Coca-Cola Company that can say why your Coke is more expensive here and it’s cheaper there? The company would tell you that Coca-Cola Nigeria is an independent company or Cadbury Nigeria is an independent company and it has got shareholders. It means we must come up with a business plan and ensure that we can do business. The reality is that the cost of my doing business here is not the same as doing business in Ghana. I have to fix my prices.
But I always welcome such comparisons. But beyond comparison, they should look at the real amount. Secondly, they need to take into consideration that we’re an independent company, a part of a global company, but we have independent and very local responsibilities. So, if I’m going to fuel my generator here to run a business and my counterpart somewhere else doesn’t have a generator to fuel, I have to take the cost in.
But guess what, there may be some disadvantages he has. I may have access to some content here at a cheaper price because it’s made in Nigeria, but he doesn’t. I’d probably take advantage of that. So, it is not safe to compare our products because it’s not even the same composition of the bouquet here that we would be selling in another country.