The latest public hearing by the Senate ad hoc committee investigating pay television price increases and pay per view subscription model shows lack of awareness of the economic conditions driving up prices of goods and services as well as misunderstanding of the desired subscription model

By Bilesanmi Olalekan

The Senator Aliyu Sabi Abdulahi-led ad hoc committee on pay television price hikes penultimate week, September 22, held its public hearing into the matter, six months after it was constituted by the Senate President, Dr. Ahmed Lawan.

The constitution of the committee, comprising Senators Lekan Mustapha and Ifeanyi Ubah, Abdu Kwari was sequel to a motion sponsored by Senator Patrick Abba Moro titled “Nigerians dumbfounded, outraged over Pay-TV Tariff Hikes, Demand for Pay-Per-View Subscription Model”.

Read Also: Pay TV: Nigerians kick as Multichoice adjusts to 2.5% VAT increase

 The hearing expectedly, was attended by pay television service providers such as Startimes, OurTV, MultiChoice Nigeria, TStv and MYTV. Also invited and represented were the National Broadcasting Commission (NBC), Federal Inland Revenue Service (FIRS), Ministry of Communications and Digital Economy, media-focused civil society organizations and members of the public. However, Ministry of Information, which supervises the broadcast industry, was strangely not invited.

Senator Moro said the motion he sponsored in March was inspired by a flood of complaints about the fixed monthly billing model used by pay television companies, which he thought was responsible for the increase in prices, and the wish to address such by considering subscribers’ demand for the institution of the Pay Per View (PPV) subscription model. Abdullahi, chairman of the committee, said it is not the intention of the committee to abridge the freedom of pay television operators to do business even as he noted that one of the operators, MultiChoice, has increased its tariffs by 55 percent in six years. He laid the blame for the tariff increases at the doorstep of the NBC, the broadcast industry regulator

“We need to have price regulation. Price increases need to be regulated. NBC from all intent and purposes are the problem of the country when it comes to pay TV,” he said accusatorily.

His position was challenged by Anete Onyebuchi, NBC’s Deputy Director, Research and Policy at the, who represented the Director-General at the hearing. He said the law establishing the NBC has no provision for price regulation, but limited to complaints about broadcast content.

“The NBC Act only gives it power to receive, consider and investigate complaints regarding broadcast content. Nowhere in the Act is the NBC given powers to regulate the prices being charged on their services,” Onyebuchi explained to the committee.

Abubakar Ladan, who represented the Minister of Communications and Digital Economy, told the committee that the ministry relationship with broadcast operators is restricted to the allocation of broadcast frequencies.

 Pay television providers and civil society representatives, however, unequivocally told the committee that the Pay Per View model is not feasible and is misunderstood.

Chief Executive Officer, MultiChoice Nigeria, John Ugbe, stated: “It would appear that this problem is because of some confusion in understanding the basic definitions and distinctions between some of the existing operational business models in telecommunications and pay TV broadcasting.

“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.

“Pay-As-You-Go accommodates a metered mode of service, where consumers are billed only for the service they consume and not for a fixed period.

“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,” Ugbe said at the hearing.

Ugbe, on the increments, explained that pay television services are market and price-reflective.

“If the subscription fees are either too high or too low, the pay television service will fail. If the subscription fees are too high, the subscribers will unsubscribe, or will not subscribe in the first place, and the business will be unable to gain the critical mass necessary for its survival. Similarly, if the subscription fees are too low, the business will be unable to cover its expenses and will inevitably go insolvent,” he stated.

He added that company’s rates are the products of factors like inflation, increasing input costs, rising costs of technical upgrades, the impact on subscribers and exchange rate volatility.

“The costs of satellite pay television are massive, ongoing and increase, rather than decrease, with time. Due to the current adverse economic situation, some of these factors which we discuss in detail below have over the years negatively impacted our cost of doing business and have put us under very challenging conditions,” he further explained.

Emeka Mba, former NBC Director-General, also stated that PPV is different from pay as you go (PAYG), with which it is routinely confused. He added that PPV and Pay TV pricing have been the subject of investigations by the National Assembly, the regulatory agencies and courts in the past.

He noted that a Federal High Court sitting in Lagos in 2015 dismissed a suit by two lawyers seeking to compel MultiChoice to reverse its price adjustments of that year.

“The Court held that the plaintiffs were not under any obligation to continue to subscribe if unsatisfied with MultiChoice subscription pricing. The suit was thereafter struck out for disclosing no reasonable cause of action,” stated Mbah

Dr Monday Michaels Ashibogwu, CEO of Billsbox Services, also noted that the assumptions around PPV being more affordable and used for regular broadcast of programmes are false.

 “The simple definition of PPV is a system under which a viewer is required to pay a certain fee for viewing special programmes such as live events or sports. The programme is broadcast at the same time to everyone subscribing to PPV service.

 “PPV means the viewer pays for only what is watched at a fixed broadcast time. The addition of PPV to a package grants viewers access to programmes on a pay per view basis. In fact, this means that viewers purchase individual programmes they desire to watch on a specific PPV channel. The payment is specifically for a programme, show or event,” said Ashibogwu.

He also noted that the shows or programmes broadcast on PPV are expensive because they are big-ticket in nature and not part of the regular broadcast schedule.

As an example, he noted that the 2015 boxing bout between American boxer Floyd Mayweather and Manny Pacquaio of the Philippines, shown exclusively on PPV in the US and UK, cost viewers in the two countries $99.5 and £30 respectively. These amounts, he noted, are way above the highest pay television bouquet in Nigeria and it was only for one bout, He noted that the prices are unaffordable by the generality of Nigerian pay television subscribers.

Coordinator, Nigerian Viewers’ Collective, Mr. Anthony Iyare, urged the Senate to avoid steps that will further contract the economy by the proposed price regulation in the pay television sector, as it could result in lower quality of the programming content offered subscribers. He further argued that the pay television companies are also affected by local and global economic indices.

 “We are aware that inflation in the country is now over 20 per cent, the highest in 17 years. The content which they offer is bought in dollars and there has been a geometric drop in the value of the naira to the dollar. Government itself has increased the prices for almost all its services.

“The prices of services and consumer goods, including household ones, have risen astronomically and continue to do so in the last three years. Local and international economic dynamics are responsible,” said Iyare.

He similarly noted that the economic conditions referenced have forced the government to jack up the pump price of fuel, even as the prices of diesel and aviation fuel have skyrocketed.

Mr. Tunde Aina Chief Operating Officer of Startimes, and Dr. Bright Echefu, Chief Executive Officer of TSTV, also rejected calls for PPV, but added that their companies have models that enable subscribers to pay for daily access to their services.

“Pay per view 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.

Though the committee’s work is not completed yet, as it stated that it would consider other memoranda submitted before making recommendations, what is obvious from the hearing is that there is a misapprehension of PPV and indifference to factors driving up the prices of goods and services, which also affect operators.

While the public, judging by reactions on social media platforms, remain unpersuaded that PPV is not what it thinks it is, questions are being raised about the propriety of the Senate’s focus on pay television of which a hefty percentage of Nigerians are nit subscribers.

In article published by thecable.ng, technology journalist, Okohi Ahie, wrote: “They (the committee) will gather not to discuss some other compelling issues like the ASUU strike for about seven months, the lack of infrastructure, including connecting roads between states and even within states; the failing aviation industry, insecurity, inflation of over 20 per cent, pervasive hopelessness in the land, and, in fact, a general lack of faith in the present administration.”

He equally stated that no law allows a regulator to fix prices for broadcast products or programmes but to generally superintend the sector.

“The Act (NBC) may have contemplated that in a free market economy, prices are left to market forces, until there is a gradual sedimentation, to the triumph of such forces,” he stated.

His position has been previously backed by the Competition and Consumer Protection Council (CCPC) tribunal, which recently dismissed complainants’ suit against MultiChoice, saying ‘Nigeria operates a free market economy” and adding that their argument on price regulation lacked merit,” wrote Ahie.

Engineer Abdulkadir Muhammed, a 56-year-old customer of one of the service providers, wondered why the brouhaha about price hike and the model to be adopted. According to him, it is a free market that is freely accessed.

“Is it compulsory you must patronise a particular brand? If and when you don’t like its services, move to the next one. That’s the edge the customers have over all the service providers. I don’t think you need any regulation about prices. The market forces should determine that. If your price as a brand is too high, you will lose customers. I think the National Assembly should just allow the market forces to determine the prices and let the customers choose which is good for them based on their economic power,” he said.

Left to Amarachi Okwara,43, civil servant in Abuja, every user should boycott any service providers whose charges appear beyond the reach of average customers. In fact, according to her, she has since stopped using DSTV and moved over to TSTV.

“To be frank, I hardly watch television. It is essentially because of my children. When I discovered that DStv was becoming too expensive for me and the children, I crossed over to TSTV. It is all about value for me. And that is I don’t see any big deal in what you said the National Assembly is doing. It is the customers that will decide what they want and the service providers will do their bidding. Customer is king”, she stated

A social commentator, Toye Oparo, questioned if subscription price for pay TV content is as important as the price of food stuff and other essentials needed for daily upkeep of an average Nigerian.

“This is just a diversion from the pressing issues. These lawmakers don’t really care about us. The price of foodstuff increases every day. Millions of Nigerians now eat just once a day. The minimum wage cannot sustain a civil servant in present day Nigeria, why are they not having a public hearing about that?

“Let’s be honest with ourselves, pay TV will always remain a luxury item. It’s for those who have enough to feed and extra to dispense with. How many Nigerians subscribe to pay TV? If you do a rough estimate, they are not up to 10% of our population.

“If anything, it shows that our lawmakers only care about what affects their class. The price of cooking gas goes up almost every month, they have not deemed it fit to prob that. Kerosine is no longer affordable to the poor, that doesn’t deserve their attention,” he said.

Also commenting on the issue, Kayode Badmus, a tech enthusiast, said lawmakers turn deaf ears to hunger in the land to focus on frivolities. “I wonder if the pay TV market is what puts food on people’s tables. Moro represents a constituency in Benue State. I doubt if pay TV subscribers in his constituency are up to 1000,” Badmus said.

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