Nigerian lawmakers have accused cable television service providers of cheating consumers through their current use of prepaid subscription plans as against a pay-per-view model widely preferred by viewers.
Following the demand for a PAYG model by Nigerians, the House of Representatives has said it will investigate cable TV operators, notably Multichoice (owners of DStv and GOtv) and Startimes after the house unanimously adopted a motion to that effect.
The outcry by viewers over a change in subscription model is due to the erratic power supply in Nigeria, where more than $14 million is spent on generator and fuel annually. Subscribers often have to spend extra on alternative sources of power supply to fully use their prepaid or monthly subscription plans.
Reports indicate that some cable TV firms even impose extra charges for public use of their service by operators of football viewing centres, most of who rely heavily on generators to run their businesses.
A pay-per-view system is often seen as a better option, as subscribers can only be charged for content watched, thereby limiting the cost of a subscription.
But issues with the prepaid system such as poor power supply stem from the inadequacies of the Nigerian government and economy, not operators of cable subscription TV. The poor power situation is said to be one of the reasons the penetration of cable television has remained low – in a country of over 200 million, there are just over 2 million subscribers.
The idea of adopting it as a business model, however, is not viable for cable TV operators and the service can only be purchased as a “non-refundable separate package in addition to a pre-existing subscription,” a Multichoice representative told Nairametrics. “To date, no pay-TV operation globally has a model based solely on a pay as you view, as it is not a viable business model.”
According to her, pay-per-view does not operate as people think. It necessarily does not allow viewers to match TV consumption to subscription, like electricity metering and mobile telephony. Instead, it only applies to a one-off broadcast of high stakes games such as football, boxing, and wrestling matches.
“It is a type of pay television service by which a subscriber of a television service provider can purchase events to view via private broadcast,” she said, adding that it is an expensive service to subscribe to.
The Nigerian government also plans to cancel the exclusive right to content for cable TV operators, a move meant to make content available for more than two cable services.
A probe by lawmakers is expected to be conducted by an ad hoc committee with the involvement of federal agencies regulating the industry, including the ministry of communications and the digital economy.