THE CALL FOR PAY-AS-YOU-GO (PAYG) SUBSCRIPTION MODEL FOR PAY-TV IN NIGERIA
Protocol
Please permit me to thank you, Honourable Chairman, for inviting me, as a critical stakeholder, for a discussion and presentation of a position paper to the Ad-hoc Committee to investigate the non-implementation of Pay-As-You-Go (PAYG) plan by broadcast satellite service providers.
BACKGROUND
The clamor for the abolition of the monthly billing system or the introduction of a Pay-As-You-Go (PAYG) plan has been directed at Pay TV operators in the past by Nigerian subscribers due to reasons such as epileptic power supply or engagements that take them from one location to the other on a daily basis, thus hindering the viewer satisfaction and access to the services provided.
Furthermore, the present channel bundling model, where subscribers are provided with little choice but to watch a bundle of channels irrespective of their particular preference, has been another reason for the call for the Pay-As-You-Go model. While platforms such as DSTV allows its subscribers, who travel out of their locations, to suspend their subscription three times in a year for a period between seven and 14 days, this has been regarded as grossly inadequate to address the demand and satisfaction of their subscribers.
PAY-AS-YOU-GO EXAMPLES FROM AROUND THE WORLD
Against the backdrop, the question then arises whether other players in the content subscription industry have introduced and operated the PAYG model, and whether such can be replicated in the Nigerian market. While the PAYG model is now the norm in the telecoms sector after MTN had initially indicated that such model was impossible in the industry, it has also been argued that the PAYG cannot be introduced in the media industry. However, a careful research of the operations of other players reveals that the PAYG model is in operation in some jurisdictions, as indicated below:
a. Sky Sports. Sky Sports operates a PAYG plan via its Sky Internet TV service, called NOW TV. For a single payment, viewers can get unlimited 24-hour access to all six Sky Sports channels. NOW TV customers gain access to matches and events, including live Barclays Premier League matches, Formula 1 and Ashes test matches. NOW TV is available for connected devices, including computers, tablets, smartphones and Xbox 360, and subscribers only pay for the days they want to watch with a Sky Sports Day, Week or Month pass, from just £9.99. This was introduced in March 2013.
b. Orby TV. Orby TV, a new US PAYG pay DTH (Direct-To-Home) satellite service announced on October 16, 2019 that the platform would offer a high-quality and affordable prepaid, PAYG satellite pay TV service directly to consumers at a low cost, with no contract and no Internet service required. This indicated that subscribers would not be forced to pay for a bundled service inclusive of internet data and would not be mandated to sign a contract for any duration.
c. Comcast. On July 21st 2016, Comcast Corp. announced it would be rolling out a new PAYG program that allows consumers to sign up for television and internet services for seven or 30 days at a time, a blueprint used by the wireless industry to attract low-income households. Under the plan, called Xfinity Prepaid Services, customers will pay a one-time equipment setup fee and can “refill” their service without limitations on the number of times they can renew, Comcast said. The service doesn’t require a credit check or contract.
d. Foxtel. Australian Pay-TV operator Foxtel has unveiled a new over-the-top (OTT) TV service called ‘Foxtel Play’, which promises no lock-in contracts and access across a range of devices when it launches. At launch, the service will offer PAYG online TV service of over 40 channels and more than 2,000 video-on-demand titles, including programming from some of the country’s most popular channel brands across movies and premium drama, documentaries, entertainment, kids and live sports. Customers will be able to build their own genre-based channels packages and access the service on PCs, Macs, games consoles, connected TVs, smartphones and tablets.
e. readytv. Chris Dehring, readytv CEO, (a Jamaican broadcaster) announced in May 2017 that the company is offering a PAYG type service by allowing customers the option of one day, seven days or 30 days prepaid packages starting at $100.
f. DISH Programming. Dish TV, a US-based platform, offers a PAYG for RV (Recreational Vehicle) owners, tailgaters, truckers, campers, and outdoor enthusiasts. With DISH Pay-As-You-Go Flex Pack model, subscribers only pay for the months of service they use, create their own TV Package and can add or drop channels at any time.
ARGUMENTS AGAINST THE INTRODUCTION OF PAYG PAY TV IN NIGERIA
The question often asked is, why can’t we have a PAYG model for Pay-TV as we have in telecommunications, where subscribers pay for what they use? The answer has always been that both industries operate differently. Those opposed to the PAYG plan argue that telecoms service providers do not buy content like Pay TV providers do, because they are not in the business of providing entertainment content. What they buy is spectrum, for which they make a one-off payment. Entertainment content is not bought on one-off basis.
However, I disagree with that position. While the present monthly subscription model was negotiated and established as a norm in the industry, so also can a piecemeal model such as a weekly, bi-monthly or other fragmental period be negotiated to accommodate frequently mobile subscribers. Indeed, this initiative would grow an untapped low-income subscriber base and such a new, more flexible option may even create some goodwill for a Pay TV brand. The current monthly subscription model in the industry most certainly does not preclude progressive initiatives on alternative payment models as have been proven by the platforms mentioned above.
It should be noted that the PAYG model could be an offering for:
a) a daily, weekly, bi-monthly or such other limited duration, or
b) a package that allows the subscriber to choose on an a la carte (piecemeal) basis, for channels or content priced either individually or on a small themed bouquet such as a sports package, or
c) based on subscriber viewing at any point in time.
In Nigeria, the existing platforms such as Multichoice and StarTimes can easily introduce any of the listed options without a complete overhaul of its broadcast architecture. Moreover, its existing billing model can exist side-by-side with the PAYG model.
STARTIMES PAY PER DAY POLICY
Talking about Startimes, I can inform you, Honourable Chairman, that this Pay TV provider is already operating a PAYG plan on both its DTT (Digital Terrestrial Television) and DTH (Direct-To-Home) platforms in Nigeria. As a matter of fact, Startimes launched the PAYG model as far back as November 2017, and this plan enables its customers to enjoy Pay Per Day, Pay Per Week or Pay Per Month.
Pay Per Day is StarTimes’s flexible daily & weekly subscription plan for subscribers. This policy was targeted at existing, dormant and new customers.
Startimes says the rationale behind the StarTimes Pay Per Day policy is as follows:
• To provide flexible and convenient payment options for subscribers
• To increase customer satisfaction
• To increase customer retention
Below are the tariffs for the Startimes PAYG Plan:
PAYG SUBSCRIPTION PLAN
Summary
In summary, Honourable Chairman, it is my considered opinion that the PAYG model is achievable in Nigeria. As I have stated above, it is not just achievable, a PAY TV provider, Startimes, is already offering it, thus puncturing the fallacy that it is not possible.
All that is required is that the existing content redistribution contracts should be taken back to the drawing board to accommodate the PAYG options that I have listed above. The PAYG proposal provides an innovative approach to grow even untapped low-income subscriber base and is likely to create some goodwill for any brand.
I thank you for your kind attention.
