Neusroom Editorial: Nigerian regulators need lessons from abroad. A message to the NBC
“The biggest risk in doing business in Nigeria is a regulatory risk. The regulator is more likely to kill a company than any market risk.”
Those were the words of Pat Utomi, a professor of political economy, while speaking at the Regulatory Conversations 4.0 themed ‘Foreign Exchange Restrictions on Food Imports and Implications for Regulating and Growing the Nigerian Economy’, in September 2019.
Over the years, several regulatory agencies in Nigeria have been known to kill businesses with obnoxious policies in the name of protecting the industry. A very good example of such is the amended version of the 6th edition of the broadcast code recently released by the National Broadcasting Commission (NBC), the government agency regulating the broadcast industry. The code seeks to take away exclusivity in the broadcast industry, enforce content sub-licensing and also empower NBC to regulate the prices at which content is sub-licensed even to direct competitors.
This is a direct attack on the growth of the broadcast industry, and by extension the creative industry which the International Monetary Fund (IMF) said accounted for 2.3 percent, approximately N239 billion, of Nigeria’s GDP in 2016 due largely to the foreign and local investment it has attracted in the past years. If allowed it will not only kill businesses in Nigeria but also send investors out of the country and send many citizens back to the streets in search of unavailable jobs.
Section 9 of the code which forbids broadcasters from acquiring broadcasting rights “in such a manner as to exclude persons, broadcasters or licensees in Nigeria from sub-licensing same,” seeks to make a total mockery of intellectual property rights and may soon turn practitioners into beggars. At a time when Nollywood acts are now beginning to get reward for their works, after decades of battling distribution and piracy without success, it is saddening that the government is now attempting to build a wall between the creative industry and its impending success.
If we do not return to status quo ante, Sections 9.0.1 to 9.0.3 of the revised code will now force investors to sub-license their shows and programmes irrespective of whether or not they have recouped their investment. Section 9.0.1 and Sections 9.1.1.8 also state that a broadcaster must sub-license a programme in any genre if such “enjoys massive viewership”.
What it means is that FilmHouse Cinema, Silverbird, Netflix, Scene One TV and many others who invest hugely in exclusive contents – movies, series and other shows, may have to start preparing for huge losses as this code seeks to make it compulsory for them to sub-license their investment. NBC cares less whether they have recouped the millions invested or not, all that matters is that others must also get access to the content.
Movies exclusive to certain cinemas or platforms, that are enjoying massive viewership will be sub-licensed to another competitor at a price recommended by NBC. Channels TV will also be forced to sub-license its flagship programmes like Sunrise Daily, News at 10, and Politics Today at a price to be determined by NBC. Who does that?
This leaves one to wonder if the new law was part of what the Minister of Information and Culture, Lai Mohammed, pitched to investors at the 11th Tourism Investment and Business Forum for Africa (Investour), during the International Tourism Trade Fair (FITUR) in Madrid, Spain, in January, 2020.
Mohammed had told the world to take advantage of the burgeoning opportunities in Nigeria’s creative industry, which he described as the fastest growing sector of the nation’s economy. Barely six months after, one of the agencies under his supervision is rolling out a law to kill the fastest growing sector of the economy he had invited investors to come over and take advantage.
If NBC is not stopped now and is allowed to inject the venomous code into the Nigerian broadcast industry it will not take time before we go back to the dark days of broadcasting when practitioners were not getting value for their skills.
Another dangerous part of the amended code is Section 6.2.8 which states that “Exclusivity shall not be allowed for sporting rights in the Nigerian territory and, in furtherance thereof, no broadcaster or licensee shall license or acquire foreign sporting rights in such a manner as to exclude persons, broadcasters or licensees in Nigeria from sub-licensing the same.”
Those who will bear this brunt are Pay TV operators. Here’s what it means: a sports station that has gone through the rigorous process of getting rights to broadcast a foreign league will be compelled to give such content to local stations, thereby losing the exclusivity and other rights that would have allowed them recoup their investment. When such stations cannot reach an agreement on cost of selling the right to the local station then the big brother – NBC wades in to decide how much should be paid. This is not how to run a modern economy, it is another deliberate attempt to frustrate investors out of the nation, while the small business owners running viewing centres will also have to close shops when they lose the exclusivity that puts food on their table. League broadcasts, just like films and other associated aspects of media and entertainment, thrive on exclusivity and access. Otherwise it would be a free-for-all where no one invests and extracts any value.
It’s the one reason why foreign football leagues like the English Premier League continue to amass value whereas back home, our football leagues and sporting events have been nothing to write home about.
Defending the new code, the acting director general of the NBC, Prof. Armstrong Idachaba, in Abuja last Monday, lamented that locals were no longer able to create content, which led to an influx of foreign production companies.
“These companies have taken over the local content production space and by extension the advertising and broadcasting space, relegating the local entrepreneurs to oblivion,” he said.
He said the NBC wanted to protect the local broadcast industry from monopolistic and anti-competitive behaviour to stimulate advertising revenue into the sector and by extension the local creative industry.
We are deeply interested in understanding the source of this data. Because every available information suggests nothing could be farther from the truth.
According to Jason Njoku, founder of IrokoTV, one of the operators affected by the new code, “In the last 5 years, Irokotv has commissioned, acquired and produced over $25 million in content. Only 20% of our revenues come from Nigeria, mind you. So think about that for a second. Less than 20% of our revenues come from Nigeria but 90% of that $24m was spent in Nigeria.” With this revised code it means IrokoTV may move its business elsewhere where it can get value for its investment. Who is the loser? The Nigerian content creators and the creative industry.
According to Accenture, in the past four years, MultiChoice Nigeria, one of the affected operators contributed a total value of $428.7 million on sourcing and producing local content, while Africa Magic commissioned $52.4 million, produced $8.3 million and acquired $26.1 million worth of local content. Who were the beneficiaries of this investment? Nigerian movie producers, film makers, writers, actors and others in the creative industry whom pirates have frustrated out of business in the past. We are about to lose all these gains with the new code coming into effect.
In other parts of the world like Europe, the government is helping investors to fight piracy to allow them recoup their investment. In September 2019, European Union agencies Europol and Eurojust, carried out raids in France, Germany, Italy, the Netherlands, Greece and Bulgaria to shut down the services of pirates selling Pay TV contents to millions of online viewers. That is how to support businesses to grow, not stifling them with obnoxious policies.
In 2014, when OfCom, the United Kingdom agency regulating broadcasting activities, made moves to review Pay TV regulation, it consulted the stakeholders and also publicly called for views on whether the regulation is appropriate or should be halted, our NBC didn’t deem it fit to carry stakeholders along before rolling out its codes like a military decree. This is not how to run a system and make a policy that has a direct impact on the lives and businesses of the people.
In a civilised state ruled by law with a responsive government, rules are not intended to destroy people and businesses, rather they are softened to give life to businesses so they can expand to create more opportunities for the citizens.
This amended code if allowed will cause the premature deaths of a large number of small, medium and large businesses in the broadcast industry. The government needs to call NBC to order now. The code is all shades of wrong! No society has achieved 21st century development with Stone Age regulation.
