Omodele Adigun and  Olabisi Olaleye

It’s no longer news that additional PayTv companies like Kwese and TSTV, aside streaming platforms like Netflix or IrokoTV,  have come on board offering the pay-per-view  model that their competitor said was not possible because there was no technology yet for it.

The streaming platform, IrokoTV, for instance, provides paid-for Nigerian films on demand. It is one of Africa’s first mainstream online movie steaming websites, giving instant access to over 5,000 Nollywood film titles.

These companies have in a way wooed Nigerians into believing that their products and services are far better than what they were hitherto offered.

Pay-per-view (PPV) is a television service from which subscribers could purchase events to watch via private telecast. Every subscriber gets to watch it at the same time.

It is different from a video-on-demand service, like the one offered by PayTV channels, that allows subscribers watch recorded broadcasts at their convenience just like the streaming platform. Though experts say that the pay-per-view is long overdue but what these companies lack is in the service delivery.

According to a subscriber, Egosa Oshodin, their promise of quality service delivery was all a farce as the service delivery did not commensurate with what he has been getting.

The Executive Secretary of the Association of Telecommunications Companies of Nigeria (ATCON), Mr. Ajibola Olude, said: “In a way, they have proven to be a better alternative but they still need to improve on their offerings in the sense that their pricing model needs to be reworked. I mean, it should be pay as you watch.”

Another subscriber, Charlotte Ighile, said when one actually calculates the arithmetic of pay-per-view as being advertised, there is no difference with that of the monthly subscription.

“I sat down and worked the arithmetic and I discovered that nothing changed, we are still under slavery and the best bet is to play along. They should just be honest. Are we really watching pay-per-view? Or the normal  monthly subscription? One promised internet, and I am yet to see it work. A major company promised to give a month free subscription, in addition to two months paid subscription and you would not believe that an agent said it was a gimmick to get people to subscribe on their platform. Nigerians should not be taken for fools.”

But educating Nigerians on what pay-per-view entails, the Managing Director of Multichoice Nigeria, Mr. John Ugbe, said people tend to muddle things up when talking about pay-per-view.

Hear him: “I think, maybe, one of the challenges is that people haven’t really explained what pay-per-view means. I give you one example: If Manny Pacquiao or Floyd Mayweather is going to have a big boxing match in the US, it will be available on pay-per-view. So, if you are in the US, you will be paying your monthly subscription, which could be anything, $50, $100, whatever it may be. The managed fight would be on pay-per-view for $70. Boxing match will last for two hours. That fight alone would cost you that much on pay-per-view. So, that is pay-per-view.  Your subscription, which you pay monthly would not give you that match. Guess what we do? We give you that fight as part of your subscription in Nigeria. So the pay-per-view manual in the US indicates that you pay for that one match.”

While the number of PayTv platforms keep increasing by the day, many customers still see it as a mirage that would outlive most of them except the regulator steps into and clears subscribers’ doubts and allays their fears.

Digital TV Research found that MultiChoice had 11.61 million subscribers across satellite TV platform DStv and DTT platform, GOtv, by the end of 2016. Another analyst predicted that this would grow to 17.66 million by 2022. 

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Although Startimes, a major competitor, is getting ready for the next evolution in that space, TSTV, Kwese and ConSat, among others, are jostling for recognition and acceptance in an already dominated space.

With mobile and Internet penetration on the up, the market has the potential to change very quickly. And linear services being provided by DTT providers, the question will be how will pay-TV operators compete?

An expert, Stanley Acholonu, predicted that, potentially, there would be a proliferation of Set Top Boxes (STBs). And that Digital  Terrestial Television (DTT )is free compared to a  Direct-To-Home (DTH) service. It is going to be interesting to see who wins that linear war.

“DTT could be a game changer and a threat to pay-TV. It also allows OTT to come into the market and take market share. We have a platform bubble in terms of Video on Demand (VOD). There has to be significant consolidation in the market. I think then VOD will emerge as a significant threat to linear businesses.”

Acholonu added that unlike the telecoms industry, which has a pay-as-you-go model, it is significantly different from the pay-television industry. This is a thing we can all check out. Telecoms service providers do not buy content like pay-television providers do because their business is not that of providing entertainment content.

“What they buy is spectrum, for which a one-off payment is made. That is not the case with entertainment content for which pay-television providers continually pay, with an upward review in prices when contracts for such expire. Pay-television companies are usually not content owners but agents or vendors. The English Premier League, which we all enjoy, is not created by those who broadcast it in every country of the world. They pay to acquire the rights to broadcast the matches. And at the expiration of the contract, the price is reviewed upward. If I ran a business and wanted it to be successful, I would have to think about the cost of restocking. The assumption that pay-television companies can go against content contracts is one that is simply impracticable. How are television companies supposed to explain it to content providers? Do they go like ‘Mr. Acholonu watched a movie and got dissatisfied after 15 minutes and would want to pay for just that period?’

“If I went to a cinema, paid N1,500 for a movie and found it uninteresting after half an hour, would I be considered a sensible person if I asked for refund pro-rated on the time spent watching? Of course, not.”

Speaking in the same vein Ugbe, said, “the reality of the pay-TV industry is that you sign three to five-year contracts with content suppliers. You have to assure these suppliers that you can buy the content to create a product you can sell. Unfortunately, you cannot go to the US and tell Time Warner that you want to pay for the content in naira. They will have a good laugh. It’s as simple as that. You cannot subscribe to a news agency abroad right now without remitting their payments in dollars. You don’t have a choice, otherwise, they will cut your news feed. That’s the reality.”

Another challenge faced by pay-TV subscribers in the country is unstable power supply that robs them the full benefit of their subscription. This has triggered the call for pay-as-you-watch model.

Addressing this issue, Ugbe said, “I think people are complaining about the power (problem) in Nigeria. It is something we have to collectively work on. However, I don’t have the technology to know when you are not watching. I can’t tell when you are not watching. There is nothing technological for me to stop that kind of billing when you are not watching because your recorder doesn’t talk back to me that you are not watching. That is on one hand. On the other hand, the model of our pricing shows that it is aggregated price. The business model of pay-TV can’t be compared with the telecoms where you have the pay-per-second billing system. I will give you an example; when you go to a cinema, how much do you pay to watch a film? Something like N2,000. That is one movie. So, imagine if we had charged that much, how much do you think you will pay at the end of the month if we sold the contents strictly based on what you want?

“I would also explain to you; if you buy a ticket and you walk into a cinema. And midway into the movie, you get bored and walked out, would you get part of your money? Or if you walk into a stadium and buy a ticket to watch a football match and at half time, you say you guys are not playing well at all. You know some of these games could be quite boring, and you are wondering what is happening, you have better things to do at home. You stand up and leave. Would you get a refund?

“So by the nature of entertainment, I can’t also go to the guys I buy the movies from and tell them, ‘know what? These movies I purchased from you, the day the guys were watching them, after five minutes everybody stopped watching and said they were not interested in your movie. They all switched off their decoders. So I need you to refund me.’ So we have to aggregate contents and  put a pricing model we can sell to users. That is different from telecoms. In telecoms, they don’t buy something and sell to you.They have a spectrum, you have to occupy the spectrum. That spectrum is finite, maybe, there are 200 channels for only 200 people. So if there  are 2,000 people there, there  will be congestion. So everybody is charged. For 2,000 people, they will all be charged appropriately. For us, it is more of the aggregate of contents we put together that we are able to offer, that is the content.”

As for the proliferation of competitors in the Pay-Tv,  the MultiChoice boss saw it as healthy development, saying, “this is an industry where there is competition. Not only is there competition, we play in the market where the users have a choice to buy. Also, we are not public firm like power company in a zone where everybody has to buy from one company. So everybody is there; you can buy from me or from that guy. We operate in an industry where there is competition from the perspective of different people being able to freely make a choice of whom to buy from. There are also a lot of channels available to each of the competitors to buy, put together to offer a service. I think we have to look at it from positive angle. I think our competition is not how we can compete with anyone to buy. This is more of a company that believes in creating. And in creating, you have to invest not just your time; money is also part of the efforts. And in creating, you then also perform a dual role of developing. Yes, we still go out there – in the music industry, in Nollywood, in the entertainment industry – you have all kinds of people we touch at some points in their careers, I think it is very positive for us.

We don’t see it (competition) like that (in negative light). Even if we are seen as very active in every part of the industry, it is because we believe in investing time, money and energy in building the market. At every point in our development, there has always been competition. I think the subscribers, the users or the customers always have a way to identify whom they want to buy from. Even our name in itself, MultiChoice, actually dwells on the fact that you have multiple choices. And I think the other thing we are trying to do is to provide many choices from which you can buy.