The Nigerian House of Representatives has approved a new plan to slash the price of cable TV services in the country in favour of a pay-as-you-go model. This comes after a House Committee report revealed that there was an increase in subscription fees by broadcasting digital satellite providers.
The House says that the plan would ensure that there is healthy competition in the entertainment industry of the country, citing a lack of visible competitors amidst a monopoly in the sector.
This means that leading operators like DStv, GoTV, and StarTimes will now face the possibility of being forced to reduce prices and implement a pay-as-you-go model that may not work in the country.
What is the Pay-As-You-Go model?
The billing model, also known as PAYG or PAYW (pay-as-you-watch), only charges subscribers when they are actively consuming television content. The difference is, unlike in present subscription offerings where you pay a monthly fee for access to an entire bouquet, the PAYG model will see users basically paying for certain programs to view.
This Pay-Per-View (PPV) payment system is usually reserved for certain sporting events, or films and has been popularised by professional wrestling. Users buy a certain program, usually a few hours long, and then watch it at their leisure.
Why the model is not applicable in Nigeria
There is an argument that the model in question is falsely compared with how it has worked in the mobile and telecom sectors. With TV, the content to watch has been created and what you are paying for is access. How you use the access is entirely up to you. Whereas, for mobile and telecoms, the material to consume is created upon your interest in it.
In 2020, MultiChoice Nigeria CEO, John Ugbe, explained that the model for PAYG requires two-way communication between the device at the subscriber’s home and the headend of the pay-tv service provider. This enables the provider to determine when a subscriber is connected or not.
Thereafter, a billing system could be designed to take into cognizance the subscriber’s behaviour. Unfortunately, MultiChoice doesn’t have access to this in its existing infrastructure.
That aside, StarTimes has implemented a highly flexible subscription plan in Nigeria, where customers only pay for what they get. The company provides monthly, weekly, and even daily subscription offers. While it is not a Pay-As-You-Go model, this gives customers more control.