Why PayTV Service Providers Are Increasing Subscription Fees
There has been growing speculation among many Nigerians after two of the biggest PayTV operators in Nigeria, DStv and StarTimes increased their subscription fees. The increase which coincided with the introduction of the controversial amendment to the Nigeria Broadcasting Code, has triggered a demand for a Pay-As-You-Go payment model for PayTV.
Tunde Irukera, the Chief Executive of the Federal Competition and Consumer Protection Commission (FCCPC), in a recent interview with Channels TV, revealed that though investigations are still ongoing, DStv has explained the cause of the increase.
‘When we saw the price increase with DStv, we wrote them a very long letter and they responded very quickly, saying that what they have done at this time is a 2.5 percent increase that captures what the law says. Meaning, VAT increased from 5 percent to 7.5 percent, and that’s all they’ve done’, he says.
While the FCCPC boss accepts this explanation, he says that the Commission is still investigating what is indeed an acceptable margin for this increase.
He goes further, ‘Our investigation remains open. It will raise other questions of what the real margin was, what is acceptable, what is not acceptable. And so, that conversation is continuing. People recognize taxes and they’ll hold the government responsible for increase in taxes. They will not hold companies responsible for increase in taxes.’
Irukera also explained why the demand for the pay-per-view format is not a realistic approach for PayTV in Nigeria. Agitations for this new price model for PayTV comes on the tail of NBC’s recent amendment to the Nigeria Broadcasting Code.
The Code among other things bans the exclusive right to broadcasting license in Nigeria and compels broadcasters to sub license their rights to competitors. These amendments will affect Pay TV, Cable TV, streaming platforms and several stakeholders in the media and broadcasting industry in Nigeria.
According to Irukera, there is a disconnection between what people are requesting for and what they truly want. Nigerians often confuse Pay-As-You-Go with Pay-Per-View. He reveals to Channels TV, ‘My challenge with what sometimes is the discussion around pay-as-you-go in Pay TV is that there is a disconnection and we’ve been through this, we’ve conducted some investigations and done some surveys in different parts of the world. The pay-as-you-go model in telecommunications is not necessarily applicable and so we confuse it sometimes with pay-per-view.’
Distinguishing the Pay-As-You-Go model from Pay-Per-View, he says, ‘Pay-per-view is not that you pay for what you view from the standpoint of when you turn your television on. It is primarily that there are certain programs, maybe a boxing match, a soccer match or some movies that are still in the cinemas, but that some of the PayTV operators have bought that content and you can literally request instead of going to a stadium or going to cinemas to watch. You can watch it in your home and pay for that view.’
He continues, ‘What people are asking for in pay-as-you-go is when you turn on your television and you’re watching, you pay. When you turn off your television and you’re not watching, you don’t pay. It’s difficult because what it is, is that the content has been created. What you’re paying for is access. How you use the access is entirely discretionary and is up to you.’
Following the announcement of the amendments to the NBC Code, several stakeholders in the media and broadcasting industry have highlighted the likely negative impacts of these amendments and have called out to the NBC to review the new provisions of the Code.
