With the latest increase in DStv and GOtv packages, many Nigerians are exploring other alternatives while painfully adjusting to the hike.
Customers using MultiChoice services in Nigeria have developed coping mechanisms to deal with price increases of its DStv and GOtv packages. On April 26, 2023, TechCabal reported that the pay-TV provider announced a price increase as a response to Nigeria’s inflation, which is currently at 22.22%.
According to the memo, the Premium package on DStv will increase to ₦24,500 ($53.16) from ₦21,000 ($45.56), representing a 16.7% rise. The Compact Plus package, which cost ₦14,250 ($30.92) before, will now go for ₦16,600 ($36.02), an increase of 16.5%, while the Compact plan will cost ₦10,500 ($22.78) instead of ₦9,000 ($19.53), representing an increase of 16.7%. Confam will cost ₦6,200 ($13.45) and no longer ₦5,300 ($11.50), an increase of 17.0%, while Yanga subscribers will pay ₦3,500 ($7.59) as against ₦2,950 ($6.40), an increase of 18.6%. The DStv Padi package will increase from ₦2,150 ($4.67) to ₦2,500 ($5.42), representing a 16.3% rise.
Similarly, the GOtv Max package now costs ₦4,850 ($10.52), up from ₦4,150 ($9.01); while GOtv Jolli subscribers will now pay ₦3,300 ($7.16), up from its previous rate of ₦2,800 ($6.08). The GOtv Jinja and GOtv Lite packages were also increased from ₦1,900 ($4.12) to ₦2,250 ($4.88) and from ₦900 to ₦1,100 ($2.39), respectively.
MultiChoice has attributed its decision to increase prices to the various economic challenges in Nigeria.
How Nigerian businesses are coping
Mercy Ajayi, the manager of an upscale restaurant in Ogudu, a suburb of Lagos, who uses the service for her guests, said the hike is not an increase to be happy about, especially where there are limited alternatives.
“All I know is we were not happy when they increased the tariff. I pray for the tariff to come down. That is what we pray for,” Ajayi told TechCabal.
For Olamilekan Adegbura, the owner of a beer parlour also in Ogudu, the situation is dire. He tells TechCabal that he uses the Premium package on DSTV for two screens and it is difficult to let anyone hang around in his bar without buying a drink.
Speaking specifically about the UEFA Champions League (UCL) semi-final that held earlier this week, he said the management of the bar didn’t let anyone watch that match without buying anything. “We did not allow them to sit down. We usually scream at them. It is really affecting us,” Adegbura stated. This new rule allows them to make headway on drinks they sell as opposed to previous times when they allowed anyone in to have a seat without paying for any drink.
Already, the National Association of Nigerian Students (NANS), south-west zone, has accused MultiChoice Nigeria of extorting Nigerians, without considering their standard of living. They proposed a pay-per-view system as a way forward after directing threats to the firm.
Pay-per-view or pay-as-you-go?
On September 22, 2022, lawmakers moved a motion for the upper chamber to probe the incessant price hike by cable television operators. MultiChoice Nigeria CEO, John Ugbe, who was in the meeting with the lawmakers, said the pay-per-view (PPV) model was not feasible.
“Whilst it may appear to be a noble intent for this committee to be concerned over the rising cost of subscription services, however, the pay-per-view model being canvassed by this committee will not work either to the benefit of the consumer or the industry,” Ugbe said. The CEO explained that the pay-per-view model cannot work because there is no technology that determines the viewers are tuned in per time, while the Pay-as-you-go bills consumers for the service they consume and not for a fixed period. DStv operates on a monthly subscription basis and has refused to adopt the Pay-per-view or pay-as-you-go till date.
A source at the Federal Competition and Consumer Protection Commission (FCCPC) familiar with the matter said the mandate of the commission is not to control price. “We can advise on price, but we can’t determine prices. We promote competition,” the source said.
The source explained that dominant players were not allowed to abuse their dominance. The source however stated that anyone that must increase price must add value, noting that matters like this will most likely come under investigation by the commission, and urged for patience as events unfold.
According to its annual results for the year ended March 31, 2022, MultiChoice group added 900,000 90-day active subscribers to close the year with 21.8 million subscribers, an increase of 5% year-on-year (YoY). The 90-day subscriber base comprises 12.8 million households (59%) in the Rest of Africa and 9 million households (41%) in South Africa. Similarly, a report from Statista forecasted that the number of pay TV households in Nigeria had increased from 6.5 million in 2018 and is expected to hit 7.4 million in 2023.
A Mobile Economy Sub-Saharan Africa 2020 report said that nearly half a billion people will be using the mobile internet in the region by 2025, with a third of the new subscribers coming from Nigeria and Ethiopia. By the same time, smartphone penetration is expected to hit 154 million in Nigeria alone. These highlight the pay-TV space’s potential because, as more people get on the Internet, its market will keep growing.
Is DStv’s price lock a hoax?
Meanwhile, DStv has made a price lock offer to subscribers who renew their subscriptions before their due dates. The offer allows customers to pay the old rates for 12 months if they pay monthly before the expiration of their subscription. The only practical question here is how sustainable this is.
Last year, MultiChoice reported that Nigeria accounted for its highest revenue growth, with subscription revenue rising by 43% in FY 2022, confirming that the country outperformed its other subscription markets.
Nonetheless, Africa’s pay-TV industry is projected to add 16 million new viewers over the next five years as top players step up the battle for compelling and affordable local content, according to a new report by research firm Digital TV Research.
Pay-TV revenues on the continent are forecast to reach $6.44 billion by 2028, up by 29% from $4.99 billion in 2022, signalling that consumers are likely to benefit from falling monthly subscription rates.
A move to cheap alternatives
A student at the Lagos State University (LASU) Isaac Williams admitted that he stopped using DStv three months ago, especially since DStv failed to innovate its content yet hiked the price as an addendum. “I do Netflix now and I do YouTube,” he said. “Netflix is flexible and I can login on other devices. With DStv, you can’t do that.”
Another student Oluwatoba Abu explained that he switched to GOtv because it is cheaper. Nonetheless, Ajayi* a football enthusiast who is subscribed to Compact Plus is yet to give up on using DStv as his primary source of entertainment. According to him, the reason for using DStv is due to his love for the footballing content—especially English Premier League matches. However, during the UCL semi-final, he opted to watch the proceedings at his favourite bar, instead of paying extra to be able to watch his desired station at home.
For groaning customers, Startimes prices represent a cheaper alternative to their pay TV struggles, yet Nigerians are still bound quite comfortably with hiked DStv and GOtv packages. The question is, why?
Just recently, the Chinese pay-TV operator also announced an upward price review, which took effect on April 14, 2023. For Digital Terrestrial Television (DTT) (antenna) users: Basic Bouquet subscribers will now pay ₦2,100 ($4.56) as against ₦1,850 ($4.01) monthly; Classic Bouquet subscribers will pay ₦3,100 ($6.73) as against ₦2,750 ($5.97) monthly; while Nova Bouquet is now ₦1,200 ($2.60) as against ₦900 ($1.95).
For DTH (Dish) users: Smart Bouquet subscribers will pay ₦2,800 ($6.08) as against ₦2,600 ($5.64) monthly; Super Bouquet subscribers will pay ₦5,300 ($11.50) as against ₦4,900 ($10.63) monthly; while Nova Bouquet is now ₦1,200 ($2.60), as against ₦900 ($1.95).
“We are not immune to the economic realities affecting businesses in the country. While businesses have been adjusting prices upward to remain afloat, we have been absolving the recurring increasing costs. However, it isn’t easy to maintain the same price if we must keep serving our customers the best,” Startimes explained the reason behind its price review.
“DStv and GOtv belong to the same company and the alternative is Startimes which for now is not very competitive. Since there’s an alternative, we cannot say it’s enjoying a monopoly. It is just that Nigerians have a preference for it. The rising prices are a reaction to the general rising prices in Nigeria, particularly with badly depreciated naira,” a professor of Economics at the Olabisi Onabanjo University, Ogun State, Sheriffdeen Tella, commented on the price review.
Tella noted that since DStv is owned by a foreign company from South Africa, it has to be concerned with the exchange rate. He stated that the government cannot control the price or it will scare away foreign investments. But it could encourage more service providers in that sector to be registered, apart from improving the exchange rate of the country.
TechCabal reached out to MultiChoice’s communication intermediary, ID Africa, for comment but has received no response at the time of this report