Early last week, I joined a social media discussion on the ruling of a
Federal High Court in Lagos on the subscription fee increment
announced by MultiChoice Nigeria Limited. The suit was filed two
lawyers challenging what they consider as arbitrary increment in
subscription rates imposed by MultiChoice Nigeria, operators of DStv
and GOtv pay-TV platforms, on their subscribers.
MultiChoice, on 3 March, had announced a 20 per cent hike in its
subscriptions fees for all its bouquets with effect from 1 April.
The lawyers got their wish (or a part of it), when the judge, Justice
C.J. Aneke, gave an interim order that MultiChoice should revert to
its old subscription rates pending the determination of the suit on
the legality of its new tariffs.
The lawyers, who sued for themselves and on behalf of all DStv
subscribers in the country, had asked for an order compelling the
National Broadcasting Commission to enforce the pay-per-view scheme,
whereby subscribers would only pay for programmes watched, as is
allegedly being done in other parts of the world.
They also asked for an order of the court restraining any other
individual or corporate entity from filing any other action on the
subject matter to avoid multiplicity of the lawsuit.
The judge adjourned the case till April 16, 2015.
Many people on the thread on which I joined the discussion (and other
places where I have heard the issue discussed) whooped with joy.
Friends, with whom I discussed the matter, cast it as a triumph of
good over evil. I admit that I also got infected, fleetingly, with the
sweeping feeling of triumph.
But when I snapped out of it, I told myself that it is not yet time to party.
In fact, I do not see subscribers partying when the suit is
determined. As much I want (I suspect like everybody else), to be able
to determine what prices are paid for goods and services, I know that
it cannot happen. Customers do not prescribe the prices of goods and
services in a free market system. Neither do courts nor governments.
It is exactly why I am surprised at the order granted by the court.
Prices, my little knowledge of economics tells me, are determined by
the market situation. The market situation, as currently shaped by the
value of naira to the dollar and the cut-throat world of television
economics in which top-end content attracts a king's ransom, is one in
which businesses cannot survive without appropriate pricing.
I have wondered how MultiChoice should have responded to naira's
increasingly negative performance against the US dollar, the currency
with which it buys content, including the Nigerian movies we love to
watch. Yes, Nigerian movies. MultiChoice's content purchase process in
centrally controlled from its South African headquarters.
This ensures that content, including that produced in Nigeria, is paid
for in dollars.
Given that it will require naira in greater amounts than it used to,
the money has to come from somewhere: subscribers. That is what every
business does without attracting litigation, at least where there is
no regulation prescribing a price ceiling.
Automobile prices have gone up since the naira lost its value;
newspaper cover prices are about going up, with the argument that such
was compelled by prevailing economic situations. Yet, auto dealers and
newspaper companies are not about to be taken to court. When cement
prices went up, there was no court action against cement
manufacturers.
The truth is that the cost of commodities and services soar when the
market demands such and no court ever rules that sellers of such
commodities and providers of such services must keep offering them to
customers at rates injurious to their operations. Rents go up and no
court fixes how much landlords should charge as rent. Even the lawyers
who went to court are not likely to be charging what they did two
years ago. How has DStv erred?
The lawyers came up with a proposal for pay-per-view model, which they
want MultiChoice to adopt as they believe it is done in other
countries. I have to say at this point that the lawyers, with due
respect, do not understand what the pay-per-view model is. The model
is not the same as a la carte. The model is actually more expensive.
It is used in the broadcast of high-ticket events for which
subscribers have to pay huge sums to watch in addition to paying their
regular pay-TV subscription.
Those events are usually live broadcast of sporting and entertainment
content and are one-off. Watching the forthcoming Floyd Mayweather/
Manny Pacquiao fight will cost almost $100 on pay-per-view in the US.
That amount is in excess of what is paid for a premium bouquet on
DStv, which will show the fight.
Read more at Vanguard:
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