Nigeria’s House of Representatives, the country’s lawmaking body, has approved a new plan to slash the price of cable TV services in the country in favour of a pay-as-you-go model.
This comes as a House Committee report tells of the increase of subscription fees by broadcasting digital satellite providers, including MultiChoice‘s DStv.
The House has since taken the plan to the Federal Government of Nigeria for approval, writes Tech Cabal. The lawmaking entity says that the plan would stimulate healthy competition in the entertainment industry of the country, with the House saying that a lack of visible competitors shows a clear monopoly in the sector.
Leading operators like DStv, GoTV (also of MultiChoice) and StarTimes will now face the possibility of being forced to reduce prices and implement a pay-as-you-go model that may not work in the country.
Why Not Pay-As-You-Go?
The billing model, also known as PAYG or PAYW (pay-as-you-watch), only charges subscribers when they are actively consuming television content. The difference is, unlike in present subscription offerings where you pay a monthly fee for access to an entire bouquet, the PAYG model will see users basically paying for certain programs to view.
In other terms, PAYG for TV is what is known as Pay-Per-View (PPV). This is usually reserved for certain sporting events, or films and has been popularised by professional wrestling. Users buy a certain program, usually a few hours long, and then watch it at their leisure.
Though what the House is asking for may be different, as explained by Babatunde Irukera, CEO of Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC), who questioned the viability of the model in the country.
“What people are asking for in pay-as-you-go is when you turn on your television and you are watching, you pay. When you turn off your television and you are not watching, you don’t pay,” he said. Irukera said that a false comparison is being made with how PAYG worked in the mobile and telecom sectors.
“It is difficult because the content has been created, what you are paying for is access. How you use the access is entirely discretionary and up to you.”
In 2020, MultiChoice Nigeria CEO, John Ugbe, explained to the committee why the PAYG and PPV models aren’t applicable in Nigeria. Basically, the model for PAYG requires a two-way communication system that MultiChoice doesn’t have access to in its existing infrastructure.
“It is only in instances where there is two-way communication between the device at the subscriber’s home and the headend of the pay-tv service provider, which will enable the provider to determine when a subscriber is connected or not, that a billing system could be designed to take into cognizance the subscriber’s behaviour,” Ugbe said.
Notably, however, StarTimes has implemented a highly flexible subscription plan in Nigeria, where customers only pay for what they get. The company provides monthly, weekly and even daily subscription offers. While not PAYG, this model does afford customers more control.
If the plan is passed, operators will have to upgrade their systems to accommodate the model or face sanctions from the government.