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MultiChoice, others reject Senate’s pay-per-view subscription proposal

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MultiChoice Nigeria, owners of DSTV and GoTV, and and other stakeholders in the cable television broadcasting industry have rejected the pay-per-view (PPV) proposal made by the Nigerian Senate for the country.

The stakeholders, who currently operate monthly subscription model, said that the PPV model being canvassed by the Senate is not feasible.

The cable television providers reached the conclusion during a one-day public hearing organised by the Senate Ad-Hoc Committee set up to investigate pay TV hikes.

The Committee, chaired by Deputy Senate Whip Senator Aliyu Sabi Abdullahi, was also commissioned to demand for the pay-per-view subscription model in Nigeria.

Senator Abdullahi, in his opening remarks, said the Senate constituted the panel following a motion on the subject matter approved at plenary.

According to him, various packages of the MultiChoice bouquet had been increased by 80 per cent in the last five years despite court order against MultiChoice against its latest increment on March 30.

The Leader of the Senate, Ibrahim Gobir, representing Senate President Ahmad Lawan, urged the stakeholders to be liberal to enable the Senate reach recommendations that would benefit all.

Senator Abba Moro, who moved the motion, said he believed that the cable TV providers should be considerate in their prices.

He regretted that MultiChoice, with its over two million subscribers, recorded many price increments from 2009 till date.

“MultiChoice increase prices without recourse to the economic reality without adopting the pay-per-view.

“DSTV, GOTV will be raping Nigerians if they consistently shunned the pay-per-view model which could ameliorate the hardship being faced by the subscribers,” he said.

In his presentation, the Chief Executive Officer, MultiChoice Nigeria, Mr. John Ugbe, noted that legal and legislative efforts to compel the firm to operate pay-per-view model failed because it was not practical.

Ugbe said: “Whilst it may appear to be a noble intent for this Committee to be concerned over the rising cost of subscription services; however, the Pay-Per-View (PPV) model being canvassed by this Committee will not work either to the benefit of the consumer or the industry.

“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.

“A pay-per-view (PPV) is not the same, and is very different from Pay-As-You-Go (PAYG).

“The 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.

“It is therefore my humble submission to this distinguished committee that due to the nature of content acquisition and technological limitations that PAYG model is not practical for broadcasting and thus is not practiced and basically cannot be implemented anywhere in the world.”

On the issue of incessant price increases by MultiChoice, Ugbe attributed the development to several factors including inflation, programming content cost, broadcast transmission facilities and massive investment to innovate and keep up with technological changes.

Other factors, according to him, are anti-piracy costs, security costs, marketing and operational costs, exchange rate fluctuations, tax, regulatory fees, and cumulative national and local levies.

“Some of the adverse economic factors highlighted above have not only affected the subscription prices for pay-tv, but have generally led to substantial increments in the pricing of a wide range of goods and services ranging from essential commodities like food, transportation, clothing, healthcare, educational services to other consumer goods like petrol, building materials, cars, etc,” Ugbe said.

On his part, a former Director General of the National Broadcasting Commission (NBC), Emeka Mba, said the issues of Pay-Per-View (PPV) and Pay-TVpricing, does not amount to an important regulatory problem worthy of Senate’s intervention.

Mba: “As Harvard University’s Kennedy School of Government, Professor Malcom Sparrow famously said in his book ‘The Regulatory Craft’, Regulators should pick important problems and fix them.’

“In my humble opinion it appears that the issues being addressed today, does not reflect or amount to an important regulatory problem.

“Whilst it may appear worrying that pay Tv services subscription charges are increasing, this must be seen within the larger economic window of rising inflation, cost of living and exchange rate challenges that is faced by every sector of the economy.

“For instance, the prices of almost every item on every family’s grocery list have increased significantly, based on the realities of demand and supply occasioned by the economic factors mentioned above.”

Besides, the Chief Executive Officer of TSTV, Dr. Bright Echefu and Chief Operating Officer of Startimes, Tunde Aina, however said even if a PPV model is not feasible, Cable TV operators could adopt pay per day models to lessen the pains of poor subscribers.

Echefu said: “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 numbers of channels they wanted to watch.”

Some members of the panel present at the session include Senators Michael Nnachi, Suleiman Abdul Kwari and Abba Moro, who moved the motion for the Senate to investigate the incessant price hike by cable television operators in the country. Read more.

 

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