The Chief Executive Officer, MultiChoice Nigeria, Mr. John Ugbe, has described the Pay-As-You-Go (PAYG) billing model as technically and commercially impossible to implement in the pay television industry.
Engr Ugbe made this known in Abuja on Monday when he apqared before the House of Representatives Ad Hoc Committee investigating the non-implementation of Pay-As-You-Go subscription model by satellite television service operators.
The MultiChoice boss also explained that the company enjoys the prerogative to decide the review of tariffs on its bouquets, as he noted that the Pay-Per-View (PPV) should not be confused with PAYG.
He explained that “the PAYG model used in the telecommunications sector, is not the right fit for pay television”.
According to him, “PAYG in telecommunications is a metered service that ensures consumers are billed only for the service they consume and not for a fixed period”.
According to him, “PAYG is possible in telecommunications, because it relies on
a two-way communication system, which enables operators to determine
when a consumer is connected, the service consumed and duration of connection”.
He said “Satellite broadcasters, unlike telecommunications firms, said Ugbe, cannot offer pay television services the same way because satellite broadcasting is a one-way system and does not enable broadcasters to determine when a subscriber is connected and/or watching or what channel is being viewed.
“It is only in instances where there is a two-way communication between the device
at the subscriber’s home and the headend of the pay-tv service provider, which will
enable the provider to determine when a subscriber is connected or not, that a
billing system could be designed to take into cognizance the subscriber’s behaviour,”.
He however said “For PAYG to be feasible, a total and global remodelling of the
satellite broadcasting technical and billing architecture will have to be done”.
He added that “the result will be that consumers will have to much higher tariffs to access the service.
“The economies of scale model employed by broadcasters mean that subscribers
pay less. We are yet to see a pay TV business anywhere ein the world that does
PAYG in the sense intended here. We do not believe the model is
technically or commercially feasible,”.
Pay-Per-View, he told the House, is different from PAYG and more expensive, as, according to him, “it requires
a broadcaster transmitting a single event at the same time to its
subscribers who have paid to watch the event.
“A subscriber who wants to watch an event on PPV is required to pay an additional fee besides his subscription. A typical example would be the Mayweather and Pacquiao, and Wilder and Fury II boxing bouts which were retailed on PPV in the United States for $100 and $79.99 respectively. The Mayweather/Pacquiao bout, which was shown on DStv premium bouquet, would cost N38,000, which would far exceed the cost of any of the DStv bouquets. The bouquet or bundling model is an effective and efficient means of providing a large but still manageable variety of choice to satisfy consumer demand for entertainment, at the lowest possible cost to consumers,”.
Ugbe denied that MultiChoice adjusted tariffs on 1 June, noting that “what it did was to implement the new rate of the Value Added Tax (VAT), as required by law. He stated that the company takes into account many factors like inflation, increasing costs of input costs and technical upgrades, impact on subscribers as well as exchange rate fluctuations to arrive at tariffs”.
He said “Due to the current adverse economic situation, some of these factors
have over the years negatively impacted our cost of doing
business and have put us under very challenging conditions,”.
Earlier, the House Ad hoc Committee Chairman, Rep. Idem Unyime (PDP-Akwa Ibom), stressed that “There is a clarion call by Nigerians and stakeholders within the broadcast industry for a change in the price regime of all Digital Terrestrial Transmission (DTl’)
and Direct»To—Home (DTH) providers from the present one bundle system to pay-
as-you—go/pay-per-view/pay-per-watch. i.e. daily, weekly or monthly model.
” It is in this vein that we have to listen to the plight of Nigerians by living up to
our constitutional responsibilities as stipulated in the 1999 constitution of the Federal
Republic of Nigeria as amended for the full implementation of Pay-As-You-Go model
across Nigeria by satellite TV operators”.
The lawmakers in concluding the session, directed MultiChoice, to provide details on how they arrived on their new tariffs in the next two weeks.
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