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Senate And DStv: Why We Must Tread Cautiously

First Bank Nigeria

By Folarin Ademosu

The Senate, last Wednesday, debated satellite television provider, DStv price hike and it inability to levy subscribers for contents watched only – similar to GSM telephony per -second billing. No divination is needed to tell where the motion by Senator Isa Misau and the attendant contributions in the hallowed parliament was directed. The senators are like many Nigerians – they love the product (DStv) and have a quality perception of it, but uninterested about how it delivers its premium services. So, the senate resolved that its Committee on Information summon the industry regulator – Nigerian Broadcasting Corporation, NBC, – and Consumer Protection Council, CPC, and, together, organize a public hearing for “stakeholders & relevant civic societies”. But, I am afraid the Senate appeared ambivalent about its ambition and how it hopes to achieve it; given that more Nigerians than it could ever know are stakeholders and highly relevant regarding DStv operations in Nigeria. These relevant stakeholders include hundreds of marketers and their employees, and installers/ technicians, musicians, actors, athletes, schools and communities benefiting from DStv operations or its corporate social responsibilities, CSR. Certainly, a faulty action in this respect will trigger a chain of reactions that may hurt more people than we think.

Talking about DStv pricing system, it can’t be gainsaid that a business owner’s pricing policy borders chiefly on its production cost, determined by availability and easy access to market infrastructures. The simplest explanation of this is that where such infrastructures – roads, rails, power, security, e.t.c – is absent or sourced at huge cost by any investor, a price burden is shifted to the consumers. It is elementary economics that everyone should understand, including our senators, many of who are employers of labour. Addressing the pricing policy of a private business, especially in an environment where the investor is a provider of all or many of infrastructures needed for its successful operations, however, is not the interruption of market forces through high-handed official interference. More so, government interventions in free market operations, rather than allowing the forces of demand and supply work to its equilibrium, could pose a danger to an investment. Again, aside the consumers suffering, it could also result to job loss. Noting the danger of excessive government regulations to business survival, Olusegun Oshinowo,  director-general, Nigeria Employers’ Consultative Association, NECA, in November, 2015, said: “While NECA appreciates the essence of the roles of regulators and would also not support unfair practices by business operators, we are, however, averse to heavy-handedness by way of sanctions that could snuff life out of the businesses.”

DStv, as a business, is not insulated from the vagaries of the Nigeria’s investment climate, so also are other brands. The question should be asked: Can the Senate regulate the prices of beer, airline fares, cement and other building materials, It is to be seen how achievable this is.

There appears a lot of misinformation or paucity of such on the possibility of a pay-television provider to adopt Pay-per-View, PPV, model. As against the popular belief, a satellite television provider can’t whimsically adopt a tailor-made PPV system. In the case of DStv, like other satellite television providers, majority of the contents are not directly owned by them. What exists between the pay-television providers, like DStv, and original content producers is the same transactional relationship between them (providers) and the end-users. The providers also subscribe to and buy programme contents from their original owners, who do not sell on the basis of how they are watched and by how many subscribers at any given time. DStv and other pay-television providers are mere content-collectors or, simply put, agents of the original programme content producers. An example is the Barclay’s English Premier League, EPL, which viewing right is bidded for and sold at exorbitantly high cost to any willing cable pay-television providers over a specified duration. Available information has shown that the PPV is a more expensive and selective pay-television service that is viewed through a private telecast. It is one in which a subscriber orders mainly to watch a particularly exclusive event, for example a high-ticket boxing tournament. While boxing-loving DStv subscribers were able to watch the last July Floyd Mayweather and Manny Pacquiao’s fight based on their premium bouquet monthly subscription, such wouldn’t have happened through the PPV model. Instead, each subscriber would have to call in to buy the viewing right for that single boxing event, and, in any case, it could be the same amount as, or more than, their usual subscription cost.

Rather than attempting to regulate prices of any business, the senate and relevant agencies must work with the federal government to create policies and legislation that will aid market and institutional infrastructures. This will definitely force down investment cost and allow greater ease of doing business in the country. Also, what government need do is to create viable grounds for more investors to enter and thrive in the pay-television industry. By so doing, government would be creating a virile free market economy, where the forces of demand and supply determine prices; create employments; provide consumers with alternatives and insure their sovereignty to choose among competing brands. Another solution available to government is to ensure that an investment of a high-end product creates alternative services for downmarket consumers. However, MultiChoice Nigeria, the DStv brand owner, seems to have done this already by facilitating the entry of GOtv, which goes for as low as N1,000. Any action short of the foregoing will amount to undercutting President Muhammadu Buhari’s well-thought-out efforts to woo investors, who may be discouraged by the development already playing out in the Senate.

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