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 ‘Court Cannot Determine DStv Tariff’

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PostSubject: ‘Court Cannot Determine DStv Tariff’   2015-04-12, 01:21

Early last week, I joined a social media discussion on the ruling of a Federal High Court in Lagos on the subscription fee increment announced by MultiChoice Nigeria Limited. The suit was filed two lawyers challenging what they consider as arbitrary increment in subscription rates imposed by MultiChoice Nigeria, operators of DStv and GOtv pay-TV platforms, on their subscribers.
MultiChoice, on 3 March, had announced a 20 per cent hike in its subscriptions fees for all its bouquets with effect from 1 April.
The lawyers got their wish (or a part of it), when the judge, Justice C.J. Aneke, gave an interim order that MultiChoice should revert to its old subscription rates pending the determination of the suit on the legality of its new tariffs.
The lawyers, who sued for themselves and on behalf of all DStv subscribers in the country, had asked for an order compelling the National Broadcasting Commission to enforce the pay-per-view scheme, whereby subscribers would only pay for programmes watched, as is allegedly being done in other parts of the world.
They also asked for an order of the court restraining any other individual or corporate entity from filing any other action on the subject matter to avoid multiplicity of the lawsuit.
The judge adjourned the case till April 16, 2015.
Many people on the thread on which I joined the discussion (and other places where I have heard the issue discussed) whooped with joy. Friends, with whom I discussed the matter, cast it as a triumph of good over evil. I admit that I also got infected, fleetingly, with the sweeping feeling of triumph.
But when I snapped out of it, I told myself that it is not yet time to party.
In fact, I do not see subscribers partying when the suit is determined. As much I want (I suspect like everybody else), to be able to determine what prices are paid for goods and services, I know that it cannot happen. Customers do not prescribe the prices of goods and services in a free market system. Neither do courts nor governments. It is exactly why I am surprised at the order granted by the court.
Prices, my little knowledge of economics tells me, are determined by the market situation. The market situation, as currently shaped by the value of naira to the dollar and the cut-throat world of television economics in which top-end content attracts a king’s ransom, is one in which businesses cannot survive without appropriate pricing.
I have wondered how MultiChoice should have responded to naira’s increasingly negative performance against the US dollar, the currency with which it buys content, including the Nigerian movies we love to watch. Yes, Nigerian movies. MultiChoice’s content purchase process in centrally controlled from its South African headquarters.
This ensures that content, including that produced in Nigeria, is paid for in dollars.
Given that it will require naira in greater amounts than it used to, the money has to come from somewhere: subscribers. That is what every business does without attracting litigation, at least where there is no regulation prescribing a price ceiling.
Automobile prices have gone up since the naira lost its value; newspaper cover prices are about going up, with the argument that such was compelled by prevailing economic situations. Yet, auto dealers and newspaper companies are not about to be taken to court. When cement prices went up, there was no court action against cement manufacturers.
The truth is that the cost of commodities and services soar when the market demands such and no court ever rules that sellers of such commodities and providers of such services must keep offering them to customers at rates injurious to their operations. Rents go up and no court fixes how much landlords should charge as rent. Even the lawyers who went to court are not likely to be charging what they did two years ago. How has DStv erred?
The lawyers came up with a proposal for pay-per-view model, which they want MultiChoice to adopt as they believe it is done in other countries. I have to say at this point that the lawyers, with due respect, do not understand what the pay-per-view model is. The model is not the same as a la carte. The model is actually more expensive. It is used in the broadcast of high-ticket events for which subscribers have to pay huge sums to watch in addition to paying their regular pay-TV subscription.
Those events are usually live broadcast of sporting and entertainment content and are one-off. Watching the forthcoming Floyd Mayweather/ Manny Pacquiao fight will cost almost $100 on pay-per-view in the US. That amount is in excess of what is paid for a premium bouquet on DStv, which will show the fight.
Watching the Grammy Awards on pay-per-view is similarly expensive. Pay-per-view is not for regular broadcast.
As for a la carte, we already have that being offered by the various bouquets on the DStv platform. A subscriber is invited to choose the bouquet that fits his/her TV taste and wallet. No one is compelled to go for the premium bouquet, which features the most compelling content.
However we may want to slice it, watching pay-TV, like owning a top-end auto or drinking choice wines, is not an inalienable human right. It is a privilege enjoyed by paying the going subscription. In a free market system, that is how it goes.
Falade, a policy analyst, writes from Magodo, Lagos
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PostSubject: Re: ‘Court Cannot Determine DStv Tariff’   2015-04-12, 06:09

hmmm e ka bo! Gbagann!
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