DStv parent company, MultiChoice has rejected the Federal government’s request to introduce a Pay-Per-View (PPV) billing model into the country. The company revealed this while announcing a price slash on the cost of acquiring its DStv and GOtv decoders.
According to DStv, there is no possibility of implementing a pay-as-go model in the country’s pay television industry.
Chief Customer Officer of DStv, Martin Mabutho, explained that the billing model has no empirical practice anywhere, adding that it is not only technically impracticable but also contractually cumbersome.
50% slash in decoder price
In good news to subscribers, DSTV has slashed the price for DStv HD decoder, dish kit with Compact package subscription by almost 50%. The company dropped the price from N18,600 to N9,900 on Confam package.
Similarly, GOtv decoder, GOtennae with GOtv Jolli package subscription was dropped from N8,400 to N6,900.
DStv Confam comes with over 120 channels, including international entertainment channels, kids, news and sports boasting of a range of channels including SuperSport La Liga, CBS Reality, FOX, BET and Cartoon Network.
Can PPV work in Nigeria?
This is not the first time DStv has spoken against the PPV model. A few months ago, when the Nigeria House of Representatives requested that the company should introduce a PPV billing model, its CEO, John Ugbe rejected the idea.
Like Martin, John pointed out that it would be impossible for the PayTV provider to implement the PPV model.
We are yet to see a pay TV business anywhere in the world that does PAYG in the sense intended here. We do not believe the model is technically or commercially feasible.
John Ugbe, CEO Multichoice Nigeria
However, the Committee Chairman Rep. Unyime Idem does not agree. According to him, the house maintains its stance that the PPV model is possible.
Notably, DSTv hasn’t launch PPV in any of its African markets including South Africa. Although there are several variations, the general model of DStv has been the monthly subscription model.
Between DStv and FG
After years in the Nigerian market, it is without doubt the DStv monthly subscription model works.
However, there are many like the house committee that believes that DStv subscription charges are too expensive and the PPV model will be a cheaper and preferable model for Nigerians.
Multichoice Nigeria CEO, John Ugbe thinks otherwise. According to him, the PPV billing system means that subscribers will be charged much higher tariffs. This appears true as foreign pay TVs companies like Sky UK and DirecTV US who offer the Pay-Per-View (PPV) pricing option charge higher tariffs.
However, with DStv competitor Startimes having introduced a type of PPV pricing system where customers can subscribe daily, weekly or monthly and still access the same channels, the house committee has a strong example to point to in their negotiations with DStv.
Mabutho on his part explained that it’s not a question of wanting to implement it, but also its workability. He likened it to playing a football match and one team scoring and people asking for a refund because some 45,000 supporters of the losing club would exit the stadium.
Considering the huge investment Pay-TV companies put into buying of viewing rights, the risk of falling into debt if enough people didn’t watch is very high.
With that in mind, if the govt wants Pay-TV companies to introduce PPV model, it may have to give some guarantee or buffer to the companies if they want it to work.
Is DStv Monthly subscription model the only viable option in Nigeria?
DStv remains the undisputed king of Pay-Tv in Nigeria. There have been several competitions but none has risen high enough to challenge the company’s top dog position in the market.
Other Pay-Tv companies that launched in the country have tried different billing models but none has been as successful as DStv’s monthly billing model.
DStv dominates the Nigeria Pay TV market, possessing up to 14 million subscribers, more than twice that of its closest competitor. Startimes has over 4 million subscribers.
In 2017, TSTv launched with the intention of disrupting DStv’s dominance in the market by offering Pay-per-view satellite TV. The service would cost 200 Naira per day and an add-on bonus of 20 Gigabyte free data allowance.
However, the company soon ran into trouble as it was unable to fulfil its promises thus becoming a victim of strong competitions in the market.
Similarly, OurTV, a new Pay-TV company offering Free To Air (FTA) Satellite TV service for a one-time fee has been silent since its launch a few months ago.
Although, there are other minority market holders like Startimes which operates a Hybrid model and is not doing badly. The trend shows that the current ecosystem only supports the monthly subscription model and for that to change something would have to be done mainly by the government.
Summary
For DSTV subscribers, the idea of a DStv PPV billing model would reduce the amount they spend watching the pay-TV.
However, in practice subscribers would probably pay more to get the same services. A subscriber paying N7,900 for 720 hours on DStv Compact may end up paying N1000 for a 2-hour football match.
Having said that, it remains to be seen how the FG government will react to DSTV decision.
The discounted DStv and GOtv bundle offer will be available from Monday, February 1, 2021 for a limited time only.
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