Another Look at Pay TV Cost

Raheem Akingbolu writes on the debate that trails the current increase in the prices of various Pay TV services in Nigeria, making a comparison between what is obtainable in the market and global terrain

The last one and a half weeks have seen a return of subscriber anger directed at MultiChoice Nigeria, the Pay TV firm, which recently announced new prices for its services. MultiChoice communicated to its customers adjustment to prices on its DStv platform directly by text messages, which stated that they would take effect from August 1. The company increased prices in 2013, 2015 and 2017. When the prices kick in, the DStv Premium package will attract N15, 800 as against the current rate of N14, 700. DStv Compact Plus customers, said the company, will pay N10, 650 instead of N9, 900, while Compact subscribers, who currently pay N6, 500, will start paying N6, 800. Prices on its DStv Family and Access packages have been raised to N4, 000 and N2, 000 respectively as opposed to N3, 800 and N1, 900 that are currently being paid. On GOtv, its Direct-to-Home (DTH) platform, the company announced a price reduction, trimming the price paid for the GOtv MAX package from N3, 800 to N3, 200. This, however, did not calm frayed nerves, as DStv is the focal point. Disaffected, subscribers quickly exhumed the age-old allegation of monopoly against MultiChoice and hanging on to it as the reason it raises prices. They urged the government to intervene a save them from perceived exploitation by the company. For most, MultiChoice had no reason to review its prices upward, a belief arising from the assumption that Nigerians pay more for its services than citizens of other countries in which it operates. Some others, especially on the social media platforms, claimed that pay TV rates in Nigeria are the highest in the world. Findings, however, have shown that MultiChoice increased prices in all the countries it operates. According to findings, the recently announced price regime will see DStv Premium subscribers in Ghana paying Cedis 365 (27, 360.75) and those on Compact plus Cedis 245 (N18, 365.44). Compact subscribers in the country are to start paying Cedis 149 (N11, 169.18), while those on the Family package (the lowest available in the country) will pay Cedis 85 (N6, 961.60). In South Africa, whose subscribers are believed to be heavily pampered by MultiChoice, the new DStv Premium rate is R809 (N21, 728.47. Compact Plus will cost R509 (N13, 670), with Compact costing R385 (N10, 340.49). Prices for the Family and Access packages have been fixed at R249 (N6, 687.75) and R99 (N2, 656.98) respectively. Rates in other countries, especially in Europe and the Americas, also show that claims that Nigerians pay higher or are victims of exploitation are inaccurate. In the United Kingdom, Sky TV, the country’s leading pay TV operator, charges £79.95 (N38, 167.33) for its premium package and £47.50 (N22, 572.97) for the one below it. Next to that is the package, which attracts £40 (N19, 008.82) monthly. Sky TV’s three other packages cost £30 (N14, 256.61), £25 (N11, 731.54) and £20 (N9, 504.41) respectively. Sky TV’s rates in Mexico, where it offers four packages, are within the same range. Its premium package costs MXN 1039 (N19, 798.52). The package just below it attracts MXN 829 (N15, 796. 52), while the last two packages cost MXN 649 (N12, 366.93) and MXN 569 (N10, 842.50) respectively. Australia’s Foxtel also charges similar rates monthly. The cost of its entry level package is Australian dollars or AUD 26 (N6, 961.60). The one above that costs AUD 46 (N12, 316. 67). Just above that is a package that costs AUD 55 (N14, 726. 45). The provider’s premium bouquet attracts AUD 75 Australian. US operator, Direct TV, charges $35 (N12, 635) for its lowest package, Select. Its slightly higher package, Entertainment, costs $40 (N14, 440), while the one above that, Choice, goes for $45 (N16, 245). Its Xtra package attracts $55 (N19, 855). Direct TV’s biggest packages, cost $110 (N38, 710) and $60 (N21, 660) respectively. Investigations show that globally, pay TV price increases draw impassioned subscriber debates, with the prevalent view being that operators are remorselessly exploitative. In most parts of the world, operators increase prices yearly, further inflaming subscriber anger. According to its most recent report, the US Federal Communications Commission’s Media Bureau said Pay TV providers are adding the extra fees to cover their rising costs so they can continue to promote relatively attractive prices. The industry’s ecosystem, findings show, is one that leaves operators at the mercy of content producers/TV networks, with the latter regularly charging more for programming content on which the former depends for viability. For years, Pay TV operators worldwide have battled, unsuccessfully, with hikes in programming costs, which erode their margins. Content owners have also continued to state that the rise in the fees operators pay to broadcast their content is largely a product of the jump in their own costs of producing such content. In particular, the cost of sporting content, a hot Pay TV property, has continued to climb and very steeply, too. Broadcasters have continued to fork out more money to retain rights to content of sports leagues such as the English Premier League, LaLiga, Bundesliga, Serie A and NBA), which fall into the category of must-have programming. With the lion’s share of out-of-the-world salaries paid to sports stars coming from television revenue, for example, owners of sporting contents, a dealing with rising costs of their own and transferring such to pay TV companies, which have no option than to transfer a slice of such to their subscribers. According to some analysts’ estimates, these costs have climbed between eight and 10 per cent in each of the past four years. In certain cases, analysts also said, the rise in pay TV subscription rates are also informed, to a lesser extent, though by better consumer experience, through frequent additions of new features and functions to services. According to consumerreports.org, most US Pay TV operators hiked their prices in 2018, with some introducing hidden fees. “The cable companies we contacted said the price hikes are mainly driven by the rising costs they face for carrying traditional broadcast networks, such as CBS and Fox, and regional sports channels,” wrote the site.

The industry’s ecosystem, findings show, is one that leaves operators at the mercy of content producers/TV networks, with the latter regularly charging more for programming content on which the former depends for viability. For years, Pay TV operators worldwide have battled, unsuccessfully, with hikes in programming costs, which erode their margins