Pay TV prices, billing model and House of Reps cheap populism

Femi Gbajabiamila, Speaker House of Representatives

By Koyejo Temenu

Since last March, the House of Representatives has, unknowingly, worked assiduously to present itself as a laughing stock with its belief that it can determine the billing model for pay television service providers and how much they should charge for their services.

The House has carried on in the misguided belief that it is fighting the corner of pay television service subscribers. The lower chamber, in terms of working hard to make itself into a congregation of cartoon characters, I have to say, has succeeded.

Proof of this was supplied by media reports on Thursday quoting the House as saying it has adopted the recommendations of its Ad-Hoc Committee on Non-implementation of Pay-As-You-Go by pay television service operators.

The News Agency of Nigeria (NAN) reported that, following the adoption of the ad-hoc committee’s recommendations, the House called on the Federal Government to expedite action on implementing the content of the National Broadcasting Code and the Nigeria information Policy of 2014.

It suggested that a regulatory intervention via the instrumentality of the National Broadcasting Code, which does not give the National Broadcasting Commission the power to control prices and determine billing models, will meet expectations for the implementation of Pay-As-You-Go and Pay-Per-View billing models as well as bring about reduction in the tariffs that pay television operators charge their customers.

I prefer to start with the last item, which is the obvious desire to have government determine the prices payable for services provided by private business entities, as though Nigeria is a reincarnation of the defunct USSR. Nigeria, of course, is not. The House, however, does not or cannot understand that.

“Price increase and reduction have always been contentious issues between producers and consumers in the business world,” the ad-hoc committee’s reported stated, very correctly.

According to item 32 on the order paper of the House, “reasons adduced” for the price adjustments by pay television services providers include the increase in the rate of Value Added Tax from 5 to 7.5% as per the Financial Amendment Act 2020, volatility of the exchange rate, which has seen an alarming dip in the value of the naira and concomitant jump in the costs of acquiring television content, broadcast equipment and infrastructure among others.

The phrase “reasons adduced”, to my mind, suggests that members of the House live on another planet and are unconscious of these factors-as causes of prices adjustments- without being told or untouched by them. These factors, along with others, a well-adjusted teenager would know, are responsible for the stratospheric rise in consumer prices to around 20 per cent.

Given the aforesaid, how could the tariff on pay television services remain low or even lower? How are service providers expected to remain in business and keep Nigerians employed by charging rates that do not reflect economic realities?

Last year, the Federal Government, to which the House has appealed to intervene, raised electricity tariff. It also raised the pump price of petrol by 16%. How are pay television providers, or any business for that matter, expected to remain going concerns if tariffs charged are not economic reality-reflective?

The House, obviously, does not think, is unable or simply high on the fumes of its own self-importance. It ignores the fact that Nigeria runs a free market economy driven by supply and demand and that pay television services are private businesses, not public utilities or essential commodities. It is unconscious of the fact that pay television operators are not like cattle herders using land as common resource.

The House, it seems, appears to think its resolution is some law. It is not, however hard it wishes it is.

Pay-Per-View? The order paper of the House did nothing other than mention it and you wonder why it was included, given the conspicuous absence of detail. My guess is that the House is afflicted by newsstand-level illiteracy, the type that sees uninformed or half-educated people form a scrum around newspaper stands to talk very loudly and confidently about stuff they know nothing about.

I suspect that the House believes that pay-per-view and pay-as-you-go are the same and are the fractional billing models that Nigerians desire, as against the fixed subscription model used worldwide. What the House is doing is to give falsehoods around pay television billing models wings to travel.

A basic internet search would show that they do not mean the same thing. Pay-Per-View is the model used for one-off events, for which the viewer pays a separate sum that is usually way higher than the regular pay television subscription. Major boxing bouts, for example, are viewed on Pay-Per-View and cost in the region of $100 abroad, a cost more than double what is paid for the most expensive pay television bouquet in Nigeria.

I head off to Pay-As-You-Go, the one that gets the House’s juices flowing. The House members, again, are no better than the blubber heads at newsstands. Last year, I believe, the topic was addressed by Dr. Babatunde Irukera, Chief Executive of the Federal Competition and Consumer Protection Council (FCCPC), who should know a thing or two about consumer rights.

Speaking on Channels Television’s Sunrise Daily, Irukera noted that pay television subscribers confuse the operations of telecommunications with those of the pay television industry.

He explained that what obtains in the telecoms industry, the inspiration for Pay-As-You-Go in pay television, is not applicable in the broadcasting space. He explained that television content is paid for by broadcasters and customers only pay for access unlike in telecommunications where the subscriber pays only when the timer starts. What he was saying was that television content is not metered. And it is not.

”My challenge with what sometimes is the discussion around Pay-As-You-Go in pay TV is that there is a disconnection and we’ve been through this.

“We have conducted some investigations and we have done some surveys in different parts of the world.

“The pay-as-you-go model in telecommunications is not necessarily applicable and so we confuse it sometimes with pay-per-view.

”Pay-per-view is not that you pay for what you view from the point of when you turn your television on.

“It is primarily that there are certain programmes, maybe a boxing match, a soccer match or some movies that are still in the cinemas that some of the pay TV operators have bought and you can literally request instead of going to a stadium or going to a cinema to watch, you can watch it in your home and pay for that view.

“That is pay-per-view, but we confuse it with pay-as-you-go.

“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.

”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.

“Unlike the telephone where the clock starts and the airtime goes down, you have paid for content,” Irukera said.

Irukera’s well-marshalled points would not have gone over the heads of members of the House if they were interested in anything other than pleasuring themselves.

-Temenu writes in from Abuja