Harassment of Multichoice Spells Trouble for Other Investors

NIGERIA is gradually turning from a market darling to a risky land in the eyes of many investors. Policies somersaults; regulatory instability; large scale distractions from lawmakers as well as opinions of ill-informed experts are conspiring to hobble Nigeria’s fledgling broadcasting industry,

And the National Broadcasting Commission (NBC) has also opened itself to a needless controversy in current bid to regulate the broadcast industry.

Elsewhere, either by ignorance or mischief, the House of Representatives is hounding Multichoice, operators of DStv and GOtv over current pricing model.

The House ad-hoc committee is convinced that the pay-TV operator is ripping Nigerians off with its current pricing model and has resolved to force change by compelling cable service providers to switch to a pay-per-view (PPV) or pay-as-you-go (PAYG) pricing model.

According to weetracker.com, the PPV/PAYG option might prove a bigger problem because pay-TV companies like Multichoice Group expend hundreds of millions of dollars acquiring broadcasting/licensing rights all over the world.

Some companies acquire broadcasting rights for years at a time with upfront payment.

“For instance, Multichoice’s popular DStv sports channel, SuperSport, paid EUR 296 Mn (USD 332.05

Mn, at today’s rates) for the 2016-19 Barclays Premier League broadcast rights in Sub-Saharan Africa.” weetracker.com reported.

After paying so much to acquire these rights, companies like Multichoice recoup this money from subscriptions while targeting profits.

But sometimes the margins are quite narrow.

According to weetracker.com, if Multichoice gets strong-armed into going the PAYG or PPV route in Nigeria, there is hardly a doubt that the company will adjust its pricing to offset the difference and make their money back; such that the PPV/PAYG option might prove even more costly for subscribers after all checks and balances are done.

But even this point is moot as Multichoice has previously made it clear that it is incapable of implementing the PPV model.