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What you need to know about pay-TV pricing

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No paying customer – of product or service – I know jumps for joy when providers increase prices. Before I go far, I need to make it clear that I do not yet have friends, who shrug and move on when prices go up. That is the point. I am not oblivious to the fact that rich people are indifferent to price hikes. They are used to luxury. The pricier a product or service is, the more of it they want.

But those of us not in their class-and we are in the majority-are almost always dissatisfied. We hiss, curse and swear, wondering why we should be on the receiving end of upward price reviews. We are persuaded that we are victims of corporate greed. It is a familiar feeling.

It is worse when the product or service is one from which we derive enormous value-tangible or otherwise. When that is the case, the reaction is often volcanic and tends to be really emotional.

Under the current economic situation, prices of goods and services, especially imported items, have continued to soar. In many cases, prices have climbed by as much 60 per cent. The consumer’s reaction to soaring prices is usually without consideration for what the provider of the goods/services is enduring. The fact is that the provider of goods/services is also buffeted by negative economic indices, which leave him with no option other than to increase prices by a percentage that keeps the business afloat and leaves a margin for profit, even if little. Anything short of that will lead to collapse. And in the event of a collapse, the business takes down other people and businesses-staff, suppliers and those who depend on them.

As a consumer, I am also guilty of this. I once took up a friend, who operates a bakery, on why he increased the price of his loaf of bread twice in as many years. He explained that the cost of input, particularly flour, kept going. He also said the profit margin is so slim that he considered winding down the business, but was prevailed on not to do so.

Up till 2015, I was weapons-grade mad any time MultiChoice increased subscription prices. This was because I tended to see the pay-television company as not belonging in the class of businesses that should review prices. I was also duped into believing the story that the company charges Nigerian subscribers more than it does its customers in other countries it operates.

Its South African subscribers, I believed-without evidence-were paying pittance.
I was not alone. It was a national belief. Then came along two Lagos-based lawyers who, that year, asked a Federal High Court sitting in Lagos to order MultiChoice to reverse rates it had just announced on its DStv and GOtv platforms. The matter received generous publicity and, predictably, support from almost everybody I knew.

In the misbegotten belief that a court could tell a private business what rates to charge, I joined others on the social media to celebrate the end of “pricing tyranny” and “monopoly”. Along with the litigation, which turned out to be wrong-headed, ran a loud clamour for boycott of MultiChoice’s services.

Not one second was spared thinking that MultiChoice is a private business like a hotel or crèche, with the right to charge what it thinks can make it continue to deliver the same quality or better as well as keep it a going concern. Also ignored was the fact that the company was affected by other economic indices, including the devaluation of the national currency, and that it had not increased prices two years prior to that time. Like others, I considered MultiChoice’s services as fundamental human right and its price review as a breach of such. The lawyers initially seemed like heroes to me until the court ruled that the company was in order to increase its rates. It similarly told them that they were under no obligation to continue using the company’s services. The company, at the time, explained that it was affected, like other businesses, by rising operational costs. This was ignored.

What was more seductive was the tale that Nigerians paid more than subscribers in other countries. I have continued to do so in the hope that I would find something, however faint, that confirms the story I had believed for long. Evidence, so far, has declined to support the story. The Internet has been of great help. Nigerians pay the equivalent of $40.78 for DStv Premium, $27.46 for Compact Plus and $17.48 for Compact. Subscribers in Zambia pay $80.83 for Premium, $46.04 for Compact Plus and $30.69 for Compact. Ghanaians pay $75.09 for Premium, $44.37 for Compact Plus and $28 44 for Compact.

In Zimbabwe, the prices are $62, $40 and $25 respectively. In Botswana, it is the equivalent of $62.62, $44.31 and $28.90. South African subscribers pay the equivalent of $58.04 for Premium and $26.85 for Compact

What this shows is that there are many factors that affect a company’s pricing policy. These include operational costs, government regulations, the economy, competition and demand for product/service.

Olatundun, a public affairs analyst, writes from Lagos


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