Navigating New Price Regime for Digital TVs, SVoDs

The recent hike in subscription charges for DStv and GOtv has sparked widespread controversy, with subscribers expressing frustration over the rising costs, while MultiChoice defends the increase as a necessary response to economic challenges, writes Yinka Olatubosun

For the fourth time in two years, MultiChoice Nigeria recently increased the subscription charges for the DSTV/GOTV network. Many consumers were enraged and took to social media to vent their frustration.

Today, both the digital TV and SVoDs are affected by the price adjustments. SVOD stands for Subscription Video On Demand, a business model in the OTT (Over-The-Top) market where users pay a recurring subscription fee to access a library of content.

In addition to buying food at exorbitant prices, Nigerians have to pay more to enjoy content that provides escapism from their economic frustration. Predictably, this hike was accompanied by a backlash. Many consumers sought other alternatives; as a result, the subscribers have reportedly dropped from 23 million to 19.3 million in less than two years. Despite this development, Nigeria still pays the least for DSTV subscriptions in the whole of Africa.

Quite understandably, all businesses had been impacted by Nigeria’s volatile economic climate. For instance, pharmacies are running out of non-prescription medications that are essential to daily living. Higher data costs, surging commuter transport and airfares, as well as astronomical house rents, are currently plaguing Nigerians thus forcing many households to stick to tight budgets.

By increasing the subscription charges, MultiChoice Nigeria perhaps didn’t leave many Nigerians with many choices: they can either pay or quit.

Still, the increase may not have been the direct cause of the drop in subscribers. It is the middle and upper classes that are the most consumers of DSTV content. In the past few years, there was a huge migration from Nigeria to other places in the world like the UK, Canada, and other parts of Europe, resulting in a significant drop in the number of subscribers recorded over the last two years. Although there is no data to support this line of argument, it is common sense economics, which MultiChoice Nigeria itself acknowledged in a press statement.

 The Nigerian economy and consumers faced persistent challenges through FY24 (Fiscal year). The removal of fuel subsidies, sharp currency depreciation with the official naira halving in value, inflation climbing to over 30%, and higher emigration of the middle and upper class drove an 18% YoY decline in active subscribers (FY23: +13%),” MultiChoice stated.

The organisation is not alone in this tariff tussle. A major video streaming platform, Netflix, has implemented three significant price hikes over the past 18 months, reflecting the challenges and opportunities in Africa’s largest entertainment market.

Indeed, the most recent increase, announced in July 2024, saw Netflix’s Premium Plan surge by 40% to N7,000 ($4.40) per month from its previous rate of N5,000.

This adjustment affected all subscription tiers, with the Standard plan rising 37.5% to N5,500, the Basic plan increasing 21% to N3,500, and the Mobile plan seeing a dramatic 83% jump to N2,200.

This July 2024 price hike came just three months after a previous increase in April 2024. During that earlier adjustment, Netflix had raised its Premium Plan from N4,400 to N5,000 and the Standard Plan from N3,600 to N4,000.

Showmax, a streaming platform owned by MultiChoice, has the most affordable rates at the moment and has reduced its prices throughout March. Showmax offered a limited deal for streaming movies, series, and more, starting from N1,600, with a discount available from February 28 to March 31. With Showmax on All Devices, prices dropped to N2000 from N3500.

In his social commentary, media entrepreneur, Simon Kolawole, argued that the Nigerian Communications Act needs to be reviewed as it empowers the NCC to have the final say on tariffs. “Section 108 says: “(1) Holders of individual licences shall not impose any tariff or charges for the provision of any service until the commission has approved such tariff rates and charges except as otherwise provided in this Part. (2) The licensees specified in subsection (1) of this section shall provide services at the tariff rates and charges so approved by the commission and shall not depart therefrom without prior written approval by the commission of such proposed changes in tariff rates and charges.” It is based on this law that MultiChoice Nigeria is having its day in court.

Hence, before Nigerians vehemently throw out the baby with the bathwater in this matter, it is essential to look at the larger picture. Beyond delivering quality entertainment, MultiChoice has been instrumental to the growth of Nigeria’s creative industry, especially music, film, and sports; providing platforms that amplify voices, empower talents, and give Nigerian stories a vast stage.

MultiChoice Nigeria was the saviour Nollywood desperately needed to tackle the challenge of film distribution before other streaming platforms emerged. Many popular Nigerian musicians today also nailed their initial cross-border breakthrough on the music distribution platforms of DSTV/GOTV.

 Before Afrobeats made it to the Grammys, there was Black Entertainment Television (BET), Soundcity, MTVBase, and more channels giving voices to the new breed of artists from Nigeria. Music reality shows like Nigerian Idol, Project Fame, The Voice Nigeria, Maltina Dance Hall, and other featured series on DSTV/GOTV channels have led to the discovery of talents whose lives, for the most part, have changed for good. Indeed, MultiChoice Nigeria represents foundational support for a generation of creatives.

At least 7,700 lives have been impacted by the MultiChoice Talent Factory. Over $ 2.2 million has been invested in education via MultiChoice Resource Centers and DSTV Eutelsat Star Awards. In the area of healthcare, the company had invested over N200 million through meaningful partnerships with the Sickle Cell Foundation and SCFN pan-Nigeria network of partner hospitals.

In addition, no less than $12 million had been invested in sports development, with the $ 5 million committed to the support and production of Super Eagles games between 2018 to 2023. Reports say that N800million has been expended in support of local club football since 2023; a N5 million in support of grassroots football through the Higher Institution Football League & NUGA; $ 2.5 million invested in the development of Boxing between 2015 and 2025; N100 million spent as broadcast sponsors for the pre-qualifying tournament in Lagos.

MultiChoice has also fast-tracked the process of tapping revenue from Nigeria’s creative sector through the taxes paid to the federal government. It has contributed $ 469 million cumulatively to the Nigerian economy through direct and indirect taxes, including licensing fees.

This trickle-down effect that MultiChoice brings to the Nigerian economy is palpable in the development of the broadcast industry. By creating infrastructure and building capacity as a member of the Broadcasting Organisations of Nigeria, the organisation has charted a legacy of improving lives beyond mere rhetoric.

Now, back to the board, the arithmetic is simple. If the income generated from subscriptions is good, the life-changing projects remain sustainable alongside the ecosystem that benefits from the existence of MultiChoice Nigeria. There are 11 branches nationwide providing jobs for over 3000. There are 16 mega dealers, 65 super dealers, 800 branded stores, 4562 retailers, and 1200 installers all tapping from the same source.

The increase in subscription charges is inevitable given the economic situation in the country. For instance, telecommunications operators such as MTN Nigeria, Airtel, Glo, and 9Mobile have made significant price adjustments to align with escalating operational costs, thus ending the ten-year-long regulatory freeze.

Still, MTN’s increased data tariffs had their share of criticisms in its wake. The telecommunications giant suffered a huge backlash recently with consumers’ online outrage over fast data depletion. MTN caught the customers off guard with a 50 per cent increase, which was approved by the NCC. But not all tariffs increased by the same amount. 

For Digital TVs and SVoDs, arguments can be made for more choices like rollover options, discounts, and other offerings, just like many telecommunications companies. But to stomp a heavy foot on the decision to increase subscription charges in response to the harsh economic climate will eventually amount to a waste of wit in court.

No doubt, Nigerians are in dire need of policies that do not exert further strain on their income. Hence, there should be more stakeholders’ platforms to discuss deeply about such decisions deeply before they are put in the public domain.

Using a series of campaigns and community-driven sensitisation programmes, subscribers can be eased into increments with less agitation.