Senate panel: MultiChoice, stakeholders reject pay-per-view subscription model
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Stakeholders including a major cable television firm in the country, MultiChoice Nigeria, have told the Senate that the pay-per-view model being canvassed by the Senate as against the current monthly billing, is not workable.
They stated this at a one-day public hearing organised by the Senate Ad hoc Committee investigating Pay-tv hikes and demand for the pay-per-view subscription model in Nigeria.
The panel was chaired by the Senate Deputy Whip, Senator Sabi Abdullahi, and had as members, Senators Michael Nnachi, Suleiman Abdul Kwali, and Abba Moro, who moved the motion for the upper chamber to probe the incessant price hike by cable television operators.
The House of Representatives adopted pay-as-you-go and a price slash for DSTV and other cable satellite operators in the country.
The House considered and approved recommendations of the Ad hoc Committee on Non–Implementation of Pay–As–You–Go and the sudden increment of tariff plans by Broadcast Digital Satellite Service Providers.
In his presentation, the Chief Executive Officer, MultiChoice Nigeria, John Ugbe, said several legal and legislative moves made to compel the firm to operate per view model did not work because it was not feasible.
Ugbe said, “Whilst it may appear to be a noble intent for this committee to be concerned over the rising cost of subscription services; however, the Pay-Per-View (PPV) model being canvassed by this committee will not work either to the benefit of the consumer or the industry.
“It would appear that this problem is because of some confusion in understanding the basic definitions and distinctions between some of the existing operational business models in telecommunications and pay-tv broadcasting.
“A pay-per-view is not the same and is very different from Pay-As-You-Go (PAYG).
“The PPV model allows a subscriber to watch some special one-off events, usually of the high-ticket variety in sports and entertainment, by paying for such events in addition to having an active subscription.
“Pay-As-You-Go accommodates a metered mode of service, where consumers are billed only for the service they consume and not for a fixed period.
“The desire by this committee to adopt PPV is further challenged by the nonexistence of any technology that can detect and or determine the viewers are tuned in per time.
“Once it is impossible to have this knowledge, billings based on “per view” become difficult if not almost impossible.
“It is, therefore, my humble submission to this distinguished committee that due to the nature of content acquisition and technological limitations the PAYG model is not practical for broadcasting and thus is not practised and basically cannot be implemented anywhere in the world.”
Another stakeholder, Emeka Mba, said the issues of Pay-Per-View and Pay-TV pricing have been the subject of several investigations by the National Assembly, the regulatory agencies and courts in the past.
Mba said in 2015, a Federal High Court sitting in Lagos, dismissed a suit by two Lagos-based legal practitioners, seeking an order for the reversal of MultiChoice price increase.
He said, “The applicants had prayed the court to order the National Broadcasting Commission to restrain MultiChoice from implementing a scheduled price increase and also implement the pay-per-view plan where subscribers could choose the programmes or channels they want and pay as they watch.
“The Court held that the Plaintiffs were not under any obligation to continue to subscribe to the 1st Defendant’s products if unsatisfied with MultiChoice subscription pricing. The suit was thereafter struck out for disclosing no reasonable cause of action.”
However, Dr. Bright Echeffe, the Chief Executive Officer of TSTV and Tunde Aina Chief Operating Officer of Startimes, however said Cable TV operators could adopt pay per day model to ameliorate the pains of poor subscribers.
Echeffe said, “Pay per view is not feasible but we came up with pay per day. We also allow our subscribers to choose the package based on the number of channels they wanted to watch. ”
Abdullahi, the panel chairman, said the Senate set up the ad hoc panel based on a motion approved by the Senate at plenary.
He said the motion stated that various packages of the MultiChoice bouquet had been increased by 80 per cent in the last five years.
Abdullahi said the development was not in the best interest of the subscribers especially when a Court had cautioned MultiChoice against carrying out its latest increment which it introduced on March 30 this year.
He assured the stakeholders that the Senate had not taken a position on the matter and that the report would be based on the memorandum they had submitted to the panel.
The Leader of the Senate, Ibrahim Gobir, who represented the Senate President, urged the stakeholders to be frank in their presentations so as to enable the Senate to come up with recommendations that would be in the interest of all.
Abba Moro, who moved the motion, said he believed that the pay-tv should be considerate in their bouquet.
According to him, MultiChoice, which is the operator of DSTV and GOTV, has over two million subscribers.
He chronicled the incessant price increment from 2009 till date.
He said, “MultiChoice increases prices without recourse to the economic reality without adopting the pay-per-view.
“DSTV, GOTV will be reaping Nigerians if they consistently shunned the pay-per-view which could ameliorate the hardship being faced by the subscribers.”
However, the Deputy Director, Research and Policy at the National Broadcasting Commission, Mr. Anete Onyebuchi, who represented the Director General said the agency had no enabling law to either regulate or control the prices being charged by the cable television operators.
Onyebuchi said, “There are negative reactions whenever MultiChoice increases its price and the NBC is concerned.
“However, the NBC Act only gives it the power to receive, consider and investigate complaints regarding broadcast contents. Nowhere in the Act was the NBC given powers to regulate the prices being charged on their services.”
He, therefore, urged the National Assembly to amend the NBC Act to give it powers to regulate prices in the industry.
Onyebuchi nevertheless said the agency will continue to engage the operators in order to ensure sanity in the industry.
The Director, Tax Policy and Advisory, Federal Inland Revenue Service, Temitayo Orebajo, said the cable TV operators are concerned about making profits despite the harsh operational environment.
He said, “The MultiChoice for instance, expresses fears that replacing monthly billing with pay-per-view, will reduce their revenues.
“However, the FIRS believe that the migration will not affect their income, rather they would get more subscribers,” he added.
Mr. Abubakar Ladan, who represented the Minister of Communications, also stressed the need to amend the NBC Act to enable the agency to sanction erring Cable TV operators.
He said, “We need to review the NBC Act in response to the dynamic and reality on ground, in the interest of the poor subscribers.”
Ladan, who is the Director/ Secretary, Frequency Management Council, pledged that the ministry was doing everything to protect the interest of Nigerians.