Why Pay TV subscribers should know about the amended NBC Code

I have taken a close look at the amendments and while I willingly admit that there may be a genuine reason for concern, it is a case of whose ox is gored.

For full disclosure, I have taken the selfish road and viewed this as a subscriber to PayTV first and as a Nigerian, second.

The recent outcry against the NBC amendments does not seem to consider subscribers like me. I find this selfish as most key players and entrepreneurs have been at loggerheads in various conversations in the media.

However, do subscribers and mass consumers of content benefit from maintaining the status quo?

For the avoidance of doubt, I consider the main players in two broad categories:

Those currently dominating the market by possessing licenses to exclusive content and or large capital bases that let them fund the acquisition of content whilst setting prices for the same in other words intending monopolies;
Underdogs and/or new entrants that have over the years been prevented from accessing premium acquired content necessary to create a level playing field in the market.

With the recent media coverage favouring viewpoints that are against the amendments to the NBC code, it has been really difficult to find any major players that speak to the impact that exclusivity has had on the ability of everyday TV viewers to pay for premium content packages. Is it because they do not exist?

At the time the amendments were released, the initial reaction was perceived as NBC exerting control on broadcasting even at the expense of the opportunities that are guaranteed by a free market system. In all these, the benefits to a regular consumer of content like myself were ignored.

A recent article by Punch Mobile puts paid to this apparent falsehood, citing Spain, Italy and the United Kingdom as countries where the anti-exclusivity clauses operate. Add Germany, Denmark and Australia to this list and it becomes clear that there is a notable shift in the treatment of exclusive content agreements in Pay-TV markets by competition authorities towards a view that access to content is imperative for entrants to be able to compete with incumbents. In Europe, rights sharing remedies have been applied and conditions have been placed on the duration and scope of exclusivity.

Again, I ask, what is NBC trying to prevent?

Monopoly and anti-competitive practices usually kill innovation and stifle competition. Throughout the history of innovation, large corporations have done the latter and have fallen to the former because they were comfortable or tried to maintain the status quo.

Instead of fostering innovation, the right to distribute premium contents over own platforms and related rights to exclude others from doing the same through alternative platforms had the result of sharply raising rivals’ costs, creating barriers to entry, and leading to a market inefficient outcome.

It is worthy of note that in the Nigerian PayTV market, a certain media conglomerate that already dominates the Direct to Home (DTH) broadcasting market, took its monopolistic tendencies further by entering the Digital Terrestrial Technology market (DTT).

Considering that little has been said about how this certain broadcaster determined to attract the Nigerian consumers and kill off competition in both segments by offering exclusive sports and news content desired by many Nigerian television subscribers.

Meanwhile, it begs the question, how has the decision to enter the Digital Terrestrial Market whilst offering a portion of the contents found on the more expensive Direct to Home platform affected this media conglomerate? The obvious answer will be positively, else they would have ceased operating in the DTT market.

From the foregoing, it is obvious that if a media conglomerate can successfully offer the same content (albeit exclusively) via different broadcast technologies and nomenclature in a Nigerian market, the provisions of the NBC amendment seeking to prohibit exclusivity of contents for the sake of a competitive market is no threat to business.

How will broadcasters compete if the code removed exclusivity?

Would it be on reduced rates for subscriptions, quality content or innovative product offerings that increase value?

It seems to me that these are the main things that motivate the choices of subscribers like myself when we are not subtly coerced into paying exorbitant subscription fees simply because we have no choice. As the holder of the rights stands to gain more profits by increasing the number of potential viewers, Pay-TV operators have to pay higher prices for the exclusivity of the premium content to make up for the reduced profits the rights holder gets by selling to only one Pay-TV operator.

Are the exclusivity clauses really a death blow to PayTV or are they the beginning of a new era of innovative products and quality content at affordable prices?

I urge NBC to ensure that the interest of subscribers is placed above all others at all times.

Another major issue is the concern raised over the sub-licensing of content to other broadcasters, which has been touted as denying the investing broadcaster the discretion on return on their investment.

Let’s ask ourselves: are the sub-licenses issued for free?

It is worthy of note that Broadcasters will not be offering their exclusive content to sublicensees for free because the code provides that recipients of such retail service are to charge their subscribers for access to redistributed content.

What this also means is that subscribers of a sublicensee platform will pay a fee for the retail service proportional to what subscribers of the original broadcasters would pay for such content, for instance.

Given the above, what motive does exclusive content really serve in the Nigerian scenario except as a tool to control the industry and stifle local competition and innovation?

Perhaps, the intention of the NBC code to ensure a competitive and fair environment for all, allows broadcasters of high-demand exclusive contents to recoup their investments by not only fixing the sublicensing price at a rate affordable to subscribers of other PayTV platforms but also permit them to determine the terms and conditions of any agreement with a sublicensee. Both broadcasters would determine the fee to be charged except when a dispute arises, upon which the NBC would step in to arbitrate.

On the other end of the ladder, it sets up a conducive environment for smaller broadcasters to compete, which in turn fuels innovation, lower prices and quality content.

Finally ask yourself, as a subscriber to PayTV, what’s in it for me?

As a subscriber, competition equals availability of a variety of platforms offering premium contents at an affordable price.

In conclusion, the non-exclusivity clause would encourage competition based on the quality of service offered, pricing, packaging strategies and technological advances, which all have consumer welfare benefits and consequently result in happy subscribers.

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