Commoditisation of contents trails disruption in broadcasting
The origin of the Nigerian television market is traced to the establishment of the Western Nigeria Television (WNTV) in 1959, by then-Premier of the Western region, Chief Obafemi Awolowo. This first Nigerian indigenous TV station commenced operation on October 31st of that year in Ibadan. The Eastern and Northern TV stations were subsequently founded in 1960 and 1961, respectively. In 1976, Nigerian Television Authority (NTA) took over these regional television stations.
The industry has since evolved from that era. With the liberalisation of the broadcasting industry in the 1990s, television content and programming were transformed as privately-owned television stations such as Galaxy Television, Africa Independent Television (AIT), Muhri International Television (MiTV), Channels Television, DBN Television, among others came on the scene.
Given the advancements in technology, television broadcasting platforms have also been transformed. From terrestrial television, which basically requires viewers to have a television set and antenna (or aerial) at home to watch content using an analog signal, digital terrestrial television (DTT) – a new broadcasting format that enables viewers to receive higher quality audio-visual signal – is now available. Freeto-Air (FTA) services or bouquet are provided by terrestrial broadcasters. But FTA is a type of TV that uses unencrypted satellite transmissions, unlike traditional broadcasting.
The distribution of multi-channel television programmes to people's homes using the satellite system is done effectively by the Direct-to-home (DTH) technology. This is, however, a subscription-based TV platform. In Nigeria, Multichoice (DSTV, GoTV), Startimes and Kwese TV are the providers of direct-tohome broadcasting.
Creative disruption in the DTH industry has been brought about by Internet protocol television (IPTV). The IPTV is the process of transmitting and broadcasting television programmes by using Internet Protocol (IP) as opposed to traditional cable or satellite signals. Key features of IPTV are video-on-demand (VOD) and live transmission. Suffice to say that a major drawback for the IPTV technology is the fact that it requires high-speed internet access for data streaming.
Although VOD is theoretically a feature of internet protocol television, in practice, it is emerging as a stand-alone service provider. It is a system that allows users to select and watch audio-visual content such as movies and TV shows at their convenience, rather than at a specific broadcast time – a system that has existed since the advent of terrestrial broadcasting.
Advancements in digital devices have further exacerbated the disruption in the television broadcasting industry, creating a convergence of media content. Apart from the multiplicity of broadcast channels, consumers now have access to broadcast content across several mobile devices – such as smart phones, tablets, portable digital recorders, etc.
Google is not a traditional broadcasting network, but through YouTube, it provides content to global audiences. As of 2018, there are a total of 1.3 billion people who use YouTube. About 300 hours of video are uploaded to YouTube every minute. Almost five billion videos are watched on the platform every day.
Mobile network operators (MNOs) are venturing into video-on-demand content provision in collaboration with VOD service providers, perhaps as a strategy to increase data utilisation by subscribers of the MNOs. The revenues of the MNOs from calls and text messages have suffered a plunge due to the increased usage of Over-The-Top (OTT) services by the subscribers. OTT services are services carried over the telecom networks. They include Facebook, WhatsApp, Skype, Netflix, etc. Globacom has already launched its own version of VOD service. This might prompt other telecommunication companies to join the bandwagon.
The fragmentation of content across multiple channels poses a challenge for owners of broadcasting companies and advertisers, especially. There must be at least 2,000 broadcasting channels in Nigeria, taking into account all the types of television platforms mentioned earlier – namely, terrestrial television, free-to-air, direct-to-home, and internet protocol television, which includes video-ondemand.
With fragmentation of television content comes commoditization – which takes place when products or services become very common or indistinguishable from competing offerings. The only distinguishing feature for commoditised products or services is pricing. In this context, the effect of competition in the television broadcasting industry may manifest in the reduction in subscription rates, addition of more content in each bouquet category, increase in subscription periods, and possibly abandonment of some bouquet categories.
With fragmentation and commoditisation of broadcast content, it has also become more difficult to obtain data on viewership for the purpose of buying advertisement. But the emerging scenarios present good opportunities for content creators who had to pay media owners huge amounts of money to buy airtime in the past. In those days when television networks dominated the industry, private owners of broadcast stations were king.
As they say, change is the only constant in life. For telcos, there are exciting times for the medium-term as they ramp up investment in video-on-demand content provision. One can also project that increased data utilisation would lead to higher revenue for telcos.
Akachi Ngwu is the Founder/CEO of Consumer Scores International Limited, a Lagos-based in–store advertising solutions provider. He is an alumnus of the Business Leadership Programme of Leap Africa. Email: firstname.lastname@example.org