Why Multichoice faces pressure to change its subscription model in Nigeria

South African pay TV company Multichoice is facing pressure in Nigeria to change its subscription model, from offering fixed monthly prices to pay-as-you-view options.

This comes about after Multichoice raised the prices of its two satellite services in Nigeria by up to 14% earlier this year, drawing the ire of legislators who immediately demanded a downward review. Nigeria’s Senate asked Multichoice to switch to pay-as-you-view so that consumers can “match their TV consumption to subscription as it is the case with electricity metering and mobile telephony.”

With an estimated 20 million subscribers, Multichoice is the leading African provider of satellite TV with two options DStv and GOtv dominating Nigeria and South Africa due to its package of exclusive European soccer games and international TV stations.

The company also owns Showmax, a streaming video-on-demand service and producer of original content that is arguably Africa’s main rival to Netflix, Amazon Prime Video and other services from Hollywood.

What is at stake for Multichoice in Nigeria?

This week, a three-member tribunal in Nigeria ordered Nigeria’s Federal Competition and Consumer Protection Commission to establish whether Multichoice already adopts pay-as-you-view in South Africa and other countries. If yes, the commission is to make sure Multichoice does the same in Nigeria.

The result of the inquiry could determine the future of the continent’s biggest entertainment company in one of its largest markets, potentially affecting the availability of massively-watched shows like Big Brother Naija currently airing its seventh season.

Multichoice has repeatedly said in the past that it cannot offer a pay-as-you-view model, citing technical and commercial considerations while insisting that its services are not expensive.

“We are yet to see a pay-TV business anywhere in the world that does PAYG in the sense intended here. We do not believe the model is technically or commercially feasible,” John Ugbe, CEO for the company’s Nigeria operations, said in 2020.