As I have noted, all is not well with DStv’s MultiChoice. The firm is planning to cut staff as it battles Netflix, YouTube and other binge providers under declining subscriber base. As it loses more users, it needs to increase price on the remaining ones since prices it pays for broadcasting sports events are increasing. That is a paralysis which we need to understand. DStv is not a monopoly in Nigeria: it is an old business with a hangover. I predict that in 10 years, it would phase out all cables and move online. Why? The best subscribers will be online and there would be no incentive for all the troubles of decoders.
MultiChoice is considering job cuts in an attempt to deal with the effects of increased competition.
According to a report by the Sunday Times, the company has asked many employees to reapply for their positions.
Up to 200 jobs could be affected, according to a source.
“We are creating a leaner and more agile organisation in order to remain globally competitive,” said a MultiChoice spokesperson to the publication.
The news comes at a time when DStv – particularly its Premium satellite service – is under pressure, due to declining subscriber numbers. At its year-end in March, MultiChoice said it lost 41,000 Premium subscribers in the preiod.
If you bound that price by court [as Nigeria plans], the company will blow apart unless you can ask England Premiership, La Liga, etc to freeze all price increments. But since it is unlikely our courts can do that, allow market forces to rule. In 18 months, EPL, La Liga etc will be open for new licensing deals: NTA, TStv, AIT, etc can go ahead and compete. Yes, you can bid more than MultiChoice to show them in Nigeria. Possibly, you will price it below N100 per user.
The statistic depicts the revenue from the Premier League television broadcasting rights from 1992 to 2019. From 2013 to 2016 the Premier League generated over 3 billion pounds in revenue from its marketing of TV broadcasting rights per year. (source: statista)
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
But it is unfair to expect the guy who pays not to make money. Despite all the noise, there is no monopoly since TV rights last typically 3-5 years which means there is a window for new hands to out-bid incumbents. NTA (Nigerian Television Authority) can get it and run all those events free to Nigerians.
If MultiChoice does not increase rates, it has no business in Africa. It is irrelevant if the price in Nigeria is higher than what it prices in Ghana. It has made it clear that running a business in Nigeria is higher because it runs generators and hires private guards unlike in other economies where those are readily provided by governments.
The key reason why MultiChoice is increasing the price is thus: it is losing its best subscribers and to cover and service the loans it took to pay for the TV rights which have made it the best Pay-TV product in Africa, it needs to ask existing customers to pay more, and because TV rights are always going higher it has to budget more for the next cycle of licensing.
As we police the nation, we need to remove sentiments. DStv renews license every 3-5 years with EPL etc. I hope NTA will out-bid it to show the games free to Nigerians. But a company which is losing customers with the cost of its raw material (sports) increasing has a limited option but to increase price, at least in the short term. With the caging, it wants to cut staff. It may even do more – just shut down so that another can get the license and show it FREE to us!
---
Register for Tekedia Mini-MBA (Jun 3 - Sep 2, 2024), and join Prof Ndubuisi Ekekwe and our global faculty; click here.
