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Spotlight Stories

Pay-as-you-view: Startimes, Multichoice in a tussle for the Nigerian market

Both companies had, at the end of H1 2020, announced a new price plan for its bouquets,

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Pay-as-you-view: Startimes, Multichoice in a tussle for the Nigerian market

Before the mid-1990s in Nigeria, television entertainment was just about tuning in and watching any terrestrial channel you could reach, with whatever quality. But the launch of Multichoice’s DSTV in 1996 started a gradual change of the narrative.

While this service majorly served the need of the rich, the introduction of other PayTV options in the 2000s broke monopoly and allowed more Nigerians to benefit from this service.

Amid all the challenges which have plagued the entertainment industry in 2020, Nigerians recently started demanding a pay-as-you-use model which will allow them only pay for what they use, rather than paying a fixed rate for a package monthly irrespective of usage. The House of Representatives was at the forefront of this request.

READ ALSO: Chelsea FC posts N46.42 billion loss in 2019

MultiChoice refused to bend as it says that it does not have the capacity to operate PPV model, as it operates a prepaid pricing model across the 50 Sub-Saharan African countries where it operates.

While the South-African company was busy trying to explain how its model does not allow it to detect when a customer is enjoying the service or not, its competitor, StarTimes announced that it had already integrated a flexible subscription plan where customers do not have to pay for what they do not get.

The model, according to the PR Manager of StarTimes Nigeria, Lazarus Ibeabuchi, allows subscribers to choose daily, weekly, monthly or quarterly plans and enjoy all exciting content on their preferred package/bouquet valid for the period paid for.

Maybe this was not what Nigerians had in mind when they demanded the pay-as-you-go billing system, but it was a lot more than MultiChoice was offering in its DStv and GOtv bouquets. It still provided a viable alternative giving customers a feel of being in charge of what they pay, and what value they get in return.

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READ MORE: On Twitter, Nigerians are demanding pay per view subscription from DStv

With as little as N90 or 160 naira daily, subscribers can watch several exciting channels, both foreign and local entertainment channels.

Note that both companies had, at the end of H1 2020, announced a new price plan for its bouquets in response to the new Value Added Tax (VAT) rate of 7.5%.

In its public announcement, MultiChoice noted the company had absorbed the additional 2.5% tax for the first half of the year, in the hope that the federal government would revert to the old tax rate before the end of Q1 2020.

Even though this action attracted lots of criticisms, the company has insisted that it would not be able to continue absorbing the extra costs given the large market in Nigeria, as it was already telling on its finances.

Some of the critics of this action claimed that the company is exploiting Nigerians, making them pay more than they should, even when the epileptic power supply in the country does not allow customers to get maximum value for subscribed plans.

The sports bait

In July, MultiChoice Group announced a new partnership with Walt Disney Company Africa, a partnership that brought in two 24-hour ESPN channels to DStv customers in Africa allowing them to enjoy the very best of US sports.

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Note that some years back, ESPN withdrew from broadcasting in Africa and Europe. Meanwhile, Startimes had earlier in the year already incorporated the ESPN channels into its bouquet offerings. The move from Multichoice could be seen as a step to retain its customers and prevent them from sliding the other way.

MultiChoice was still basking in this euphoria when Startimes announced that it had acquired four-season transmission rights to the Spanish Laliga and the UEFA Nations League, to be broadcast from 2020/21 to 2024 season across sub-Saharan Africa.

Even before this latest acquisition, StarTimes was already making a statement in sports broadcasting. It had exclusive rights to the Europa League, Bundesliga, Coppa Italia and Copa Del Rey. The PayTV operator also airs the English Football League Championship (EFL), Major League Soccer (MLS), Belgian Pro League, Netherlands Eredivisie; and Basketball tourneys – NBA and The EuroLeague; Formula E, MMA and Major League Wrestling.

A little something extra – Startimes was being very generous in offering non-subscribers an opportunity to watch live sports, other sought-after TV channels and over 2000 video-on-demand content, for as low as N400 weekly, with an option to subscribe with their MTN airtime.

Talk about a product that seeks to serve all market sections.

Children and family entertainment

Away from sports, the competitors have taken their game to the children and family entertainment space.

Just recently, StarTimes partnered with the NBCUniversal International Networks’ (NBCUIN) to bring the DreamWorks family entertainment channel on the StarTimes pay TV platform across sub-Saharan African.

According to Lily Meng, head of StarTimes’ media division, the addition of the channel with its range of animated TV series is a timely deal coming at a time when “most kids and parents are staying home.”

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On a similar note, MultiChoice had announced moves to integrate Netflix and Amazon Prime Video services into its Explora decoder as part of an agreement. According to the statement, the agreement is a proof of its aggregator model which provides choice and convenience for customers.

“As our industry evolves, we believe that we are well-positioned to benefit from both worlds – a large, growing pay-TV market in Africa, as well as an emerging over-the-top opportunity, where our own OTT services and aggregation capabilities can drive success,” CEO Calvo Mawela stated.

The company also said that it has commenced field trials for its own DStv streaming products, to be launched later in the year. This will be added to the streaming offering currently offered on Explora, the Showmax.

Observers opine that MultiChoice recent decisions are part of a larger strategy to remain the leading pay-TV channel and content aggregators.

The heated competition continues across all channels, especially on social media where both operators try to actively engage their customers with trailers and snippets from their content. During the Sallah celebration, StarTimes sent gift packages to some randomly selected customers as contributions to a bountiful celebration.

There is also the ongoing promo where StarTimes customers stand a chance to win smartphones, bulbs and other gifts, when they do two-months subscription.

This is clearly a competition that is not ending anytime soon, but interestingly, it would appear that the customers are the final beneficiaries of the tussle as each PayTV operator tries to outdo the other.

Ruth Okwumbu has a MSc. and BSc. in Mass Communication from the University of Nigeria, Nsukka, and Delta state university respectively. Prior to her role as analyst at Nairametrics, she had a progressive six year writing career.As a Business Analyst with Narametrics, she focuses on profiles of top business executives, founders, startups and the drama surrounding their successes and challenges. You may contact her via [email protected]

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    Economy & Politics

    FG places high profile Nigerians under security watch for terrorism financing

    The FG has said that it is currently profiling a large number of high profile Nigerians who have been alleged to have reasonable links to terrorism financing.

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    FG to establish a new anti-corruption agency, P&ID, FG, malami, $9bn fine is a scam - Federal Government , UPDATED: P&ID operations shut down, assets forfeited by court order

    The Federal Government has said that it is currently profiling a large number of high profile Nigerians who have been alleged to have reasonable links to terrorism financing.

    This follows the arrest of an undisclosed number of suspects recently after the convictions of some Nigerians on terrorism financing in the United Arab Emirates (UAE).

    This disclosure was made by the Attorney General of the Federation and Minister of Justice, Abubakar Malami, during a chat with the press at the Presidential Villa, Abuja on Friday.

    What the Attorney General of the Federation is saying

    The Minister said that the convictions of Nigerians in the UAE has given rise to wider and far-reaching investigations in Nigeria.

    Malami in his statement said, “As you will actually know, sometimes back, there were certain convictions of Nigerians allegedly involved in terrorism financing in the United Arab Emirates (UAE).

    That gave rise to a wider and far-reaching investigation in Nigeria and I’m happy to report that arising from the wider coverage investigation that has been conducted in Nigeria, a number of people, both institutional and otherwise, were found to be culpable, I mean reasonable grounds for suspicion of terrorism financing have been established, or perhaps has been proven to be in existence in respect of the transactions of certain high-profile individuals and businessmen across the country.

    I’m happy to report that investigation has been ongoing for long and it has reached an advanced stage. Arriving from the investigation, there exists, certainly, reasonable grounds for suspicion that a lot of Nigerians, high-profile, institutional and otherwise, are involved in terrorism financing and they are being profiled for prosecution.

    In essence, it is indeed true that the government is prosecuting and it’s indeed initiating processes of prosecuting those high-profile individuals that are found to be financing terrorism. It is indeed true.

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    However, Malami did not give the number of such suspects as he maintained that investigation was still ongoing until a conclusion is arrived at.

    “As to the number, the investigation is ongoing and it has to be conclusive before one can arrive at a certain number, but one thing I can tell you is it is a large number and they are being profiled for prosecution.

    It is indeed a large number and I’m not in a position to give you the precise number as at now because the profiling and investigation are ongoing.”

    Malami warned that government will not hesitate to invoke the full wrath of the law on anyone found culpable in sponsoring terrorism in the country as nobody found culpable in terrorism financing will be spared.

    What you should know

    It can be recalled that in March 2021, the Association of Bureau De Change Operators of Nigeria (ABCON) confirmed the arrest of some of its members by security operatives over the investigation of some of their transactions which border on money laundering, terrorism financing and Know Your Customer status.

    ABCON in its statement said that it considers these as serious allegations especially given the security challenges facing the country. It appealed to the authorities to expedite action to ensure that innocent people who have been caught up in this investigation can be released and so that they can return to their anxious families and resume their lives.

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    Macro-Economic News

    Nigeria’s VAT collection surges to N496.4 billion in Q1 2021

    Nigeria’s VAT collection surged by 52.93% (year-on-year) to stand at N496.4 billion in Q1 2021.

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    VAT

    Nigeria generated a sum of N496.39 billion revenue from Value Added Tax (VAT) in the first quarter of 2021, a surge of 52.93% year-on-year compared to N324.58 billion recorded in the corresponding period of 2020.

    This is contained in the sectoral distribution of value added tax report, recently released by the National Bureau of Statistics (NBS).

    According to the report, VAT collections in the period represents a 52.93% increase as against N324.58 billion recorded in Q1 2020; and a 9.17% increase compared to N454.7 billion recorded in the previous quarter.

    The increase in VAT collections could be attributed to increased economic activity in the country, compared to the previous year, where most economic activities were put on hold as a result of the covid-19 pandemic.

    Highlights

    • Highlights of the report showed that the manufacturing sector generated the highest amount of VAT with N49.41 billion generated, closely followed by Professional Services, having generated N42.50 billion, and State Ministries & Parastatals, which generated N26.96 billion.
    • Mining generated the least, closely followed by Pioneering, Textile & Garment Industry with N48.36 million, N77.01 million, and N289.41 million generated respectively.
    • Also, out of the total amount generated in Q1 2021, N224.85 billion was generated as Non-Import VAT locally while N171.66 billion was generated as Non-Import VAT for foreign.
    • The balance of N99.88 billion was generated as NCS-Import VAT.

    Manufacturing sector topples professional services

    The manufacturing sector toppled the professional services sector to lead the list of sectors with the highest VAT remittances in the first quarter of 2021. A total of N49.41 billion was collected as Value Added Tax from the manufacturing sector.

    • Professional services followed closely, having remitted N42.5 billion in VAT to the government, State ministries and parastatals stood in third position with N26.96 billion VAT.
    • Others on the list include; Commercial and trading sector with N22.8 billion, oil-producing (N15.8 billion), Transportation and haulage services (N14.9 billion), Breweries, bottling, and beverages (N11.9 billion).
    • Federal ministries and parastatals (N8.8 billion), banks and financial institutions (N3.3 billion), and oil-marketing (N3 billion).

    Why this matters

    • The increase in VAT collection is a development in the right direction, especially given the recent positive growth recorded in global crude oil prices, indicating an increase in government revenue.
    • However, the government needs to intensify its effort in creating innovative ways of increasing revenue given growing overheads and statutory spending, coupled with increasing debt profile.

    Continue Reading

      





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