The Senate’s planned move to lower the viewer fees was rejected on Thursday by the country’s largest supplier of television services, Multichoice Nigeria.
Out of almost all parties present at a one-day public hearing organized by the Senate Ad-hoc Committee on “Pay-TV Hikes And Demand for Pay-per-view Subscription Model,” chaired by Senator Aliyu Sabi Abdullahi, only the broadcast service provider Multichoice vehemently opposed the proposed pay-per-view.
In its report to the Committee, the broadcast service provider defended its position and cited obstacles in the communication sector as justifications for a price increase, including the nation’s power shortage and prevailing instability.
In his oral testimony before the Committee, John Ugbe, CEO of Multichoice Nigeria, claimed that pay-per-view will harm the economy. He insisted that despite Nigeria’s free market economy, the model being proposed by the legislators would not bode well for the company’s 27 years of operations.
He urged the parliament to grant them the right to decide how much Nigerians pay, pointing out that Nigeria lacks a competitive marketplace as well.
“Pay television services compete with other services for subscribers’ disposable income, including existing broadcasting services (public, commercial free-to-air and other pay television services), and other entertainment services, such as YouTube, Facebook, cinemas, video rental outlets and DVD retailers.
“The demand for pay television services fluctuates and is very sensitive to the price a subscriber has to pay and affordability factors.”
The TSTV confirmed that they had been operating pay-per-view since they were granted their operating license, but Multichoice said that the present subscription model forces users to pay for channels they don’t watch.
Ugbe said: “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.”
“In determining subscription fees, MultiChoice takes into account many factors, including inflation, increasing input costs, ever escalating costs of technical upgrades, the impact on subscribers and the exchange rate fluctuations.”
Given that consumers have complained about the price increase for Multichoice subscriptions, a development that led to the Senate creating the Ad-hoc Committee to look into the complaints of citizens, the position of TSTV, another broadcast service provider, appears to be in line with the thinking of the Senate.
In a similar spirit, Startimes Nigeria argued that pay-per-view was viable since customers would subscribe to and pay for just the channels they wanted to watch rather than a monthly subscription that would have to be moved.
Abdullahi Sabi, the chairman of a committee, and Senator Abba Moro, the deputy chief whip of the Senate, insisted that the committee would consider all arguments before making a conclusion.
The Chairman made a commitment to look into further comments from stakeholders who were unable to attend the meeting before it was adjourned “sine die” and returned the report to the Senate for legislative discussion.
