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Pay TV Market: Who Can Challenge DStv’s Monopoly?

By Lawrence Amaku
23 January 2015   |   11:00 pm
THE deregulation of broadcasting in Nigeria in 1992 broke the monopoly enjoyed by government in the provision of the broadcast service and more importantly set the tone for competition for market share among private entrepreneurs. Before then, the Federal, regional and state governments enjoyed the exclusive rights to broadcasting in Nigeria, beginning in 1932 with…


THE deregulation of broadcasting in Nigeria in 1992 broke the monopoly enjoyed by government in the provision of the broadcast service and more importantly set the tone for competition for market share among private entrepreneurs. Before then, the Federal, regional and state governments enjoyed the exclusive rights to broadcasting in Nigeria, beginning in 1932 with the Radio Broadcasting Service of the Empire Service of the British Broadcasting Corporation (BBC). Interestingly, private broadcasting did not begin until 1992, despite the rights conferred on private entrepreneurs to do so as contained in the 1979 Constitution which states that “every person shall be entitled to own, establish and operate any medium for the dissemination of information, ideas and opinion.”

  Later microeconomic theory placed emphasis on how competition causes commercial firms to develop new products, services and technologies, which would give consumers greater selection and better products. This awareness and the need to stem DStv’s near monopolistic hold in the market have spawned a new wave of direct broadcast satellite companies in the country. 

  One fact that cannot be lost on cable and satellite TV service providers as they prop up their competition for the market share is the popularity of the English Premiership League (EPL) among a vast category of Nigerian viewers which can be described as the Golden Fleece in the pay TV market. Hence, there is often the race to acquire the rights for the content at all costs. DStv’s steadfastness in broadcasting this content has perennially given it an edge over other pay TV companies. Remarkably, DStv’s masterstroke is the diversification of its broadcast contents and positioning itself as the provider of wholesome family entertainment with the tag line that has only recently mutated from ‘So much more’ to ‘Feel Every Moment.’ In addition to its programming, it has a wide range of package and products which provides varieties for subscribers, as well as mouth-watering products. DStv has also increasingly acquired more contents over the years and expanded existing ones. 

  In a brief chat with The Guardian at the launch of the African Cup of Nations (AFCON) campaign a week ago, the General Manager, Sales and Marketing of the parent body of DStv, Multichoice, Mr. Martins Mabutho, hinted at what gives the company a superior edge: “At Multichoice we have built for ourselves a business that is not only reliant on one genre alone. We have other interesting genres of contents. Some of the best contents we have will get us through. Remember we lost the rights to broadcast the EPL some years ago and later regrouped.” 

  However, events in the not-too-distant past have shown that DStv’s stranglehold on the pay-per-view category of the Nigerian TV market has come under threat once or twice.

  Interestingly, HiTV led the charge few years ago followed by Chinese-owned Startimes whose entry into the market increased the competitiveness of the cable TV market forcing DStv to roll out a rival product, GOtv in 2011. Other networks plying their trade in the market are CTL, Continental Satellite Limited (Consat), Metro Digital, MyTV, Daarsat, TrendTV and Montage Cable Network. 

  South Africa-owned DStv was able to stave off stiff competition from HiTV few years ago when the latter won the rights to broadcast the EPL which has a huge followership among Nigerians. HiTV emerged from the blues to win the rights to not only beam the lucrative English Premier League, but also the UEFA Champions League, Europa League and the English FA Cup at the expense of Multichoice-owned DSTV which had been beaming it many years before. The development was hailed by many Nigerians as the closest any pay TV station in the country had come to turning the table against DStv who are the first pay TV company to berth in Africa. Against all odds, HiTV was able to wrest the EPL broadcast rights from DStv albeit with alleged tacit support from the Federal Government. HiTV had seen its viewership base soar tremendously within the four years of its ownership of the broadcast rights between 2007 and 2011 before its bubble burst. DStv made a resurgence to regain the broadcast rights. Apart from the EPL broadcast rights, DStv also acquired the rights to broadcast other top European leagues, among them La Liga and the Italian Serie A. 

  According to The Chief Executive Officer and Managing Director of HiTV, Toyin Subair, the company was left in the lurch when it could not get the back of its bankers after making payment for the broadcast rights. “The real issue is that we actually won the rights, made the initial deposit payment of $40 million and expected that our financial institution would provide the bank guarantee as is the practice. But unfortunately, the bank could not do so before the given deadline,” Sunbair said in a press conference.

  Like HiTV, many cable satellite TV or direct to home (DTH) service providers had in the past tried to flex muscles with DStv only to be stifled out of the market. 

  Notably, some of them have simply not lived up to their promises, despite the razzmatazz that greeted their entry. A case in point here is DAARSAT from the stable of Daar Communications, owners of the nation’s first independent station, Raypower and African Independent Television (AIT). With its ‘Catch da Fever’ awareness jingle, DAARSAT left no one in doubt that it was set to take over the market and finally break DStv’s monopoly. Its greatest undoing, however, was its failure to deliver on its promises to subscribers and the provision of its service with customised DAARSAT TV, which meant that subscribers are compelled to buy the TV in order to enjoy the service.

  Obviously, one thing that brands seek in making inroads into the pay TV business is to not only create a brand promise but also deliver on it, otherwise they will continue to hold on to the shorter end of the stick. It is, however, worthy of note that the competition in the pay-per-view TV is getting more exciting with the recent entry of more pay TV companies. On each occasion they have had their eyes set on challenging DStv. 

  At the launch of Montage Cable Network last year, a new pay TV service provider that came into the market in April 2014, the Chief Executive Officer (CEO) of Montage, Mr. Bamidele Adetunji, said the new cable network would serve as an alternative to DStv.

Also last year, Continental Satellite (Consat) launched its service with the promise of delivering unequalled service anywhere in Africa and positioning itself as the voice of Africa following alleged misrepresentation of the continent by the foreign media.

Perhaps, one way by which any new entrant or competitor in the market can halt the dominance of DStv is by introducing the innovative edge known as Pay as you Watch or Pay as You Go which for some time has been a tall order for most cable TV network owners. Even the ones that have promised such service have not been able to fulfil their brand promise. Many Nigerian subscribers are of the view that considering the infrastructure gap evident in erratic power supply and bad weather that often impairs signals in the country, it is only imperative for viewers to pay for the exact number of hours spent watching a pay TV channel. 

  Speaking at an industry stakeholders forum held in 2014, the Managing Consultant, Telecom Answers Associates, Titi Omo-Ettu, urged the service providers to do more than just providing fascinating contents and begin to think in the area of the payment mode, considering the dynamics of an ever evolving technology.

  “Why can’t we have a Pay As You Go (PAYG) model for pay TV, just as we have prepaid in the GSM sector where subscribers are given the option of prepaid and post-paid services,” he said.

  A trader and subscriber to one of the leading cable TV networks who simply gave his name as Ugo while bemoaning the reluctance of the service providers to implement the Pay as You Watch mode explained why he stopped paying for subscription.

  “My job requires me travelling from Lagos to Abuja regularly and even spontaneously. So, I can’t imagine paying for a month’s subscription only to be away for two weeks the following day. If the payment mode would allow me continue from where I stopped the last time out, I will renew my subscription,” he said.