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There seems to be a looming ‘war’ among Operators of digital satellite service providers in the country if recent happenings in the Industry is anything to go by. The race for market share and subscriber base in the industry is getting keener in an industry previously dominated by a single provider. Pay TV services are subscription-based television services, usually provided by both analog and digital cable and satellite television. There are 3 ways of receiving digital signals; Digital Terrestrial Television (DTT), Direct to Home (DTH) and the multi-channels multi-point Distribution system.

The total number of pay-TV subscribers in Africa is approximately 23.7 million. According to Dataxis, this represents quarter-on-quarter growth of 2%, and year-on-year growth of 18%, compared to the second quarter of 2016. Among the subscribers, 70% receive television through satellite, said Dataxis. Direct-to-home is confirmed as the main mode of TV reception across the African continent, followed by digital terrestrial television (DTT) access with 24% of the market share. DTT is still being implemented and developed in several important African countries and Dataxis predicts this will allow DTT operators to gain new customers in the years to come.

  Industry Drivers

Nigeria currently has about 3.4million active subscribers which represents 14.5% of the Africa pay TV market. Operators in the Nigerian market includes Multichoice owners of DsTv and Gotv, Startimes, Daarsat, Consaat, Kwese TV and the new entrant TSTV. Prior to the coming of TSTV, the industry has enjoyed maximum monopoly which has lasted for more than 2 decades . DSTV commands the largest market share in Africa with 10.4 million subscribers and 1.5 million subscriber base in Nigeria. This represents 60% of the Pay TV industry in Nigeria.

Operators in the industry seek to create value for their customers by adding channels that appeal to various market segments. Program contents include News Channels, Entertainment, Sports, Education and Kiddies channels. Market Drivers are:



  1. Program Content: Findings have shown that there is an increase in the number of active subscribers during European Football seasons like the English Premiership, Spanish La Liga, and Champions League competitions. Nigerians follow top teams in Europe religiously and will do anything to watch their favorite teams play. HITV now defunct lost the rights to air European matches to another competitor and this apparently lead to their exit from the industry. The right to air these matches has further boosted the dominance of DSTV and GOTV in the market. Sports and majorly football is a big driver in this industry.
  2. Pricing: Having created the value for its customers, operators are entitled to capture a portion of it through pricing. To remain viable, the firm must sustain this process of creating and capturing value over time. Most pricing systems are unfair to most customers especially the Working class segment who spent few hours in a day at home. However, the good news is that new entrants into the market have introduced the Pay-per-View pricing system. This will enable subscribers to pay depending on the the number of days and also there is provision to pause their subscription. Recently, Startimes a Chinese digital operator with a 29% market share came-up with its pay-per-day pricing model. Also Kwese Tv has also launched its daily subscription plan. The Consumer Protection Council (CPC) had in February 2016 issued a directive to MultiChoice Nigeria, owners of DStv, on the need to be flexible on its dealings with subscribers after investigations by CPC confirmed the allegations of violations of consumers’ rights leveled against MultiChoice Nigeria in the delivery of its service. However, after the order, subscribers to DStv service were still agitating for the better service experience.

                        Analyzing the Industry using Porter’s five Forces.

  1. Threat of new entrants in the sector is medium:

This is because the cost of startup especially as an investor is high. The machines and equipments needed to start up is expensive and sourced abroad. Also with the ease of doing-business Policy in Nigeria getting licensed to operate in the industry is simpler and more efficient. Low switching cost for subscribers most subscribers can easily switch from one Pay TV Operator to another. The cost of purchasing a decoder is relatively cheap. Depending on Program content, customers are not loyal to any operator.

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Standard chartered
  1. Threat of substitutes is high

The advent of Internet TV and Video Streaming Services  pose a great threat to the Pay TV Industry. New Entrant TSTV has a Data bundle package to enable its customers stream videos and programs online.  Low switching cost to these substitutes.

  1. Bargaining Power of Suppliers is High

The Satellite technology are sourced from specialized vendors and equipment manufacturers, hence, setting up such an infrastructure require expertise which are not readily available in the country. The investors have to rely heavily on foreign sourced professionals to handle the core of their operations.

  1. Bargaining Power of Customers is low.

Most subscribers are price sensitive but are left with no other option than to subscribe to offers that best suits their pockets. The regulatory agency (National Broadcasting Commission) plays little or no role in price determination.

  1. Rivalry among competitors is high.

There is an intense rivalry among operators in the industry for expansion and market share. This has led to a Price-battle among operators. Also poaching of staff by new entrants into the industry will force other operators to improve on welfare packages for staff. The expertise in this industry is non-readily available.


Industry experts are of the opinion that the new entrants into the market will spur efficiency and also make prices pocket-friendly. Most people are of the opinion that for any operator to survive in this Industry, attention must be paid to the drivers of the industry which are Pricing and Content. Operators can then leverage one the growing population in the country to gain market and also revenue.



Fikayo Owoeye writes for Nairametrics

Nairametrics frequently publishes articles from experts such as financial analysts, economists, researchers and investors. We also feature articles from guest writers and bloggers who wish to push their views and opinions through our platform. To get your articles on Nairametrics, kindly send an email to info@nairametrics.com and we will publish it within 24 hours of approval by our editorial team.


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