Nigeria: How cable operators stimulate rapid growth in pay TV industry

Broadcast

IN the last 20 to 25 years, pay TV industry, especially the Multi-channels, Multi-points Distribution System (MMDS) arm, has been connecting middle-class and low-income earning Nigerians to the rest of the world through satellite television via cable. But the business of this category of pay TV service providers has lately been hampered by multi-dimensional challenges. In this interview with Kabir Alabi Garba, the President, Association of Cable Operators of Nigeria (ACON), Kunle Osisanya speaks on the challenges and the need for stakeholders, particularly government to quickly tackle them. Excerpts:

Q: What is cable TV operation all about?

A: There are basically two ways of watching television: free to air and through the satellite called pay TV. And in the new digital format, there are three basic ways of receiving digital signals in Nigeria for now. There is Digital Terrestrial Television (DTT) service, which is being offered by Star TV and GOtv. More may be coming. Again you will notice that GOtv has a slightly different format. Their own is a handheld, that is, the mobile handheld service. However, in the last few months, they have surprised everybody by going into the sales of decoders, which we are made to believe is not part of the original license given to GOtv. Just like the name suggests, it is supposed to be a handheld thing.

Also, there is Direct To Home (DTH), which is what Multi-Choice is doing. It was what hiTV did. Service providers such as FStv, Trend TV, and DAARSAT had all, at one time or the other, operated on this platform.

The last but not the least, which is the oldest, is Multi-channels, Multi-points Distribution System (MMDS) and it is the most common around. It has been around for about 20 to 25 years. These are the three different ways through which pay TV service is offered in Nigeria. The cable TV operators fall under the third category, and we are spread all over the country. We are now in 43 locations. Each company has a single license. However, some companies have two or three licenses where they have different locations.

Q: As the oldest platform for offering pay TV service, how has business fared lately?

A: Over the last few years, the business has been affected by various challenges including government policies. First is the issue of licensing; the second is power generation, third is unfair competition. The issue of licensing and renewal has always been what the regulatory body, National Broadcasting Commission (NBC), has tried to maintain. However, over the last few years, there are issues of sales, turnover that have affected the industry. The amount paid for issuance of license has not really changed much, but the amount being paid as renewal does not take into reality of the operating environment.

For in instance, in Kano, as I am speaking to you, operators cannot go to the bank in the daytime; they have to arrange for the banker to come to receive money. That means, customers cannot go to the bank at will to pay. This is one of the environmental problems we have in the industry. Also, in Warri, the situation is pathetic. The operator has a license to cover Effurun, but in Warri, there is what they call string operation. It is a situation where somebody just wakes up and buys about 20 to 40 different decoders from all pay TV operators, put them in a room, receives all the signals and distributes around the town using PHCN poles and boosters, collecting five hundred from people, thus killing the business of the licensed operator. This is because if it would cost you between N300 and N500 to receive 40 channels why would you go and pay N2000 for one operator when you can get the product of five other operators at N500 or thereabout?

And unfortunately, the NBC and Nigerian Copyright Commission as well as the police have not been able to stop this illegal operation that is already running genuine and licensed operators out of business. These pirates have become so notorious and they operate with impunity.

In the area of power generation, we all suffer power problems in Nigeria, but it affects the broadcast industry substantially. A client or subscriber may not come for renewal when he has only two to three hours of electricity supply in one week for instance. And the logic is simple: if he struggles to generate power for other essential things, why should he struggle to generate power for pay TV for that matter? That also affects the sales of cable operators. And why it affects them so much is because they are meant to service the middle class. High class people can decide to buy DTH and pay whatever they are asking, but those in the middle class may not be able to afford N9,000, N10,000 every month; but they can afford the rent of cable operators. By license, cable operators have a smaller range of coverage. The license is 50 kilometre radius from where they are operating. It is a community-based thing and that is why cable operators are closer to the people at the grassroots. And the fee is affordable.

Q: What is your group doing about these challenges?

A: In ACON, the belief is that piracy is not an issue that can be tackled in Nigeria legally and legitimately. This is because piracy occurs when there is monopoly or scarcity. If there is no scarcity, and it is available for everybody, there would be no piracy. Nobody will steal from you if he can go to the market and buy at the rate the world buys. It is when you are frustrated, when you get there they tell you, ‘Nigerians are bad! Nigerians always want to cut corner!’ And the stuff like that. The man who is selling the programme has already been fed with wrong information about you. So, when you get there, as a legitimate businessman from Nigeria, you are confronted with all these stereotypes and when you ask for the identity of the backbiters, they would decline to mention names.

In some instances, we have been able to get evidence. The owners of the programme would declare, ‘this is what we heard about your country, this is the evidence, this is the letter written to us that we shouldn’t sell the rights to this so and so company.’

This is what has led to the death of most of the DTH operators in Nigeria. FSTV died because of content; hiTV died because of content; DAARSAT died because of content.

There is one thousand and one content available out there. However, there is content that is Nigeria-related. There is the content average Nigerians are interested in. When we say DAAR content, you will be surprised that DAAR content is not only available on A or B channel only, it is also available on CD. But what we are talking about is, let me take a documentary channel worldwide; these are what they call educative channels. There should be no infringement or anything disturbing anybody from getting documentary channels because knowledge is supposed to be shared by the world. It is when we have knowledge spread all over the world that there would be peace and harmony, that people will get to know about others.

Normally, documentary and educational contents are not supposed to go under such monopolistic tendencies but unfortunately, Discoveries Channel, which teaches about anything you can think of; and we are saying somebody should not say he has the right for the whole of Africa. If you say you have the right, then you have gone to negotiate what is called ‘exclusive deal with the suppliers’. This is wrong!

Given the fact that the two dominant and relatively successful operators in the industry today have ‘foreign’ connections: Multi-Choice (South Africa), Star Time (China), will it be correct to conclude that pay TV can only succeed in Nigeria with foreign partnership?

Far from it! Pay TV can succeed in Nigeria and in fact, the best medium to get to Nigerians, especially in this era of digitization, is through the cable. And given the fact that not all Nigerians will be able to afford digital TV as soon as the country goes digital in 2015, the cable operators can serve as stop gap pending the time Nigerians could afford to procure their digital facilities such as decoder or set-top-box as the case may be.

Indeed, the cable operators are alive and kicking, we only ask the government, especially the regulatory agency to straighten some of the contours that are slowing down the pace of development and progress in the industry. Level playing field must be created for all categories of operators, while the issue of exclusive deal on broadcast rights must be tackled comprehensively.