Disparity In Africa’s Pay-TV Subscription Rate

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GODDIE OFOSE takes a look at the myth being  peddled that Nigerians pay the highest subscription rates in the African continent.

As at last year, precisely, November 17, 2015, Nigeria’s pay-TV market was rated as second largest in Africa with about 14.5 per cent domination, according to the study done by telecom, TV and media business market research firm, Dataxis.

South Africa was rated number one in the continent pay-TV market with 35.8 per cent of the continent’s total market share dominated by a single, deep-rooted player, Multichoice, with its DStv offering.

The study showed that the total pay-TV subscriptions across Africa moved to 15.9 million as of Q2 2015, an increase of 18 per cent over the 13.4 million recorded in the same period in 2014.

Dataxis tracked all pay-tv operators in all markets worldwide and where information is not publicly available, the firm provided market analysis based on primary or secondary research of operators, national regulators, government agencies and equipment vendors.

The top five pay-TV markets account for 65.4 per cent of total African pay-tv subscriptions, according to Dataxis, and these five marketers are South Africa (35.), Nigeria (14.5 per cent), Angola (6.5 per cent), Tanzania (4.4 per cent), and Kenya (4 per cent).

Providing insights into the research methodology, Research Director at Dataxis, Gavin Patterson, said, “We compiled subscription numbers based on publicly available information from listed operators, national regulators, government agencies and equipment vendors”.

According to Naspers’ financial results in March 2015, DStv had 5.4 million subscribers in South Africa, while Nigeria’s subscriber based, though, not yet made public, was believed to be within the range of 4 million active subscribers nationwide.

Apart from DStv, there are other players such as StarTimes, ConSat, DaarSat, ACtv and few other fringe players. However, DStv has constantly been on the receiving end over some ‘unwholesome’ business decisions mostly considered inimical to subscribers as a result of changing business environment and government’s policies.

In March 2015, Multichoice, owners of DStv and GOtv, announced a 20 per cent price increase for all its satellite pay TV bouquets in Nigeria, with effect from April 1, 2015.

The increase led to DStv’s premium rising to N13, 980 from N11, 650, a N2, 330 increase, while the DStv’s family bouquet rose from N3, 000 to N3, 600, a N600 increase.

DStv’s compact plus subscribers pay N9, 420 instead of N7, 850, while DStv’s Compact users pay N6, 000 per month, up from N5, 000.

In the same vein, DStv access now costs N1800 up from N1, 500, while DStv extra view subscribers no longer pay N1, 800 but N2, 100.

These have always resulted in customers’ lamentation, as people tend not to consider the prevailing business environment, which is enmeshed in local currency devaluation, inflation and other government policies, which impact negatively on overall operations. This notwithstanding, Multichoice has to continue in business, hence, the marginal increase. As a multinational, sourcing for contents offshore Nigeria with foreign exchange, the brand is constrained to keep running on the previous subscription fees. “The current scenario is a classical example”, said Umana Ukpong, a Tv content creator.

A source in Multichoice alluded to the fact that English Premier League, which is one of the most watch content on the platform is sold in pounds, while other contents are bought in dollars. The current devaluation of the naira against other currencies vis-à-vis other unfavourable   business elements usually necessitated the upward review in subscription fees.

But it may come as a surprise to many that Nigerians pay the lowest on premium subscription rates in the whole of Africa.

The country- to-country comparisons show that Nigeria pays the second lowest of $42 to $44, despite unabated rise in exchange rate. The $42 to $44 was based on N167 to N173 per $1 benchmark. A dollar at official market rate now goes for N315.25 and parallel market is N468.25. Mozambique appears to pay lowest ($40 to $43) on its English bouquet because it is not an Anglophone country.

Uganda and Tanzania subscribers pay the highest rate of $80-$99. Findings also revealed that Ghana $80-$93, Kenya $76-$93, Zimbabwe $81 and Swaziland $43-$49 are some of the highest markets in terms of subscription fees.

Investigations also carried out on two bouquets-Compact Plus and Compact – shows that Nigerian subscribers pay between N9, 300 and N6000 ($28 to $30) and ($18 to $19) respectively, for the bouquets.

Ghana pays $54 to $67 for Compact plus and ($32 to $41) for Compact, Kenya pays $52 to $63 and $30 to $37 respectively.  Tanzania and Uganda pay between $54 to $67 and Zimbabwe $55 for the Compact plus.

However, the Nigerian market is robust with a growing number of key players in the pay-tv space. This is not only great for competition, but it also provides real choice for consumers.

DStv is in a healthy competition with StarTimes, a Chinese TV company that formed partnership with the Nigerian Television Authority, NTA. Other competitors are ACTV, DAASAT, FSTV, which, for now, are running far behind competition.

A further probe into the pay-tv market showed that StarTimes is the only major competitive pay-tv brand with subscribers paying as low as between N800 to N3, 600 for both low and high bouquets.

Expatiating on subscription rate,  the managing director, Multichoice Nigeria,John Ugbe,  said: “We try to minimize the impact. In Nigeria, we have been very fortunate that after the price we put through on April 1, 2016, we haven’t had cause to put another price increase into the market yet”.

However, a major feature of the new pay-tv is the deliberate choice of channels to align with the expectation of the Nigerian viewing public, an attempt to creating voice for Nigerians.

For this reason, a couple of months ago, the platform put Zee World into the African continent, Nigeria included. The market has really responded well to that, Ugbe observed.

According to him, “At the moment, we have been able to avoid increasing rates in Nigeria, despite increase in foreign exchange rates and that is largely because the government and the Central Bank of Nigeria, CBN, have been strong on policy decision-making”.

“We also understand that there are times when we do things that are not popular, but we do it in the interest of the business. So, because we are very conscious of the way that the consumers are likely to react, we tend to think quite deeply before we do stuff that is going to result in a negative impact”, he explained.

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