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Report: Nigeria to lead Africa’s pay-TV with 11m subscribers

Despite recent challenges leading to a hike in the cost of subscriptions by pay- TV operators, Nigeria has been projected to be the largest pay- TV market with 11 million subscribers by 2026. According to the latest forecast by Digital TV Research, the country will be driving rapid growth in the African pay-TV market, which is projected to have 51 million subscribers in the next five years. According to the report, South Africa will be second in Africa with nine million subscribers.

The African market which had 34 million subscribers at the end of 2020 is projected to add almost 17 million pay-TV subscribers between 2021 and 2026 to hit the 51 million mark. Speaking on the report, Principal Analyst at Digital TV Research, Simon Murray, said: “Multichoice had 15.51 million subs across satellite TV platform DStv and DTT platform GOtv by end- 2020. This total will grow to 19.67 million by 2026, with a marked slowdown of satellite TV growth.”

“China-based StarTimes/ StarSat will enjoy the most impressive growth: from 10.11 million subscriptions at the end of 2020 to 16.86 million by 2026. France’s Vivendi had 5.41 million subscriptions to its Canal Plus satellite TV platform and Easy TV by end- 2020, which will climb to 7.90 million by 2026. The growth projection for Nigeria is coming amidst challenges that stakeholders said have been posing a serious threat to the pay-TV market.

As the government through the Central Bank of Nigeria (CBN) devalued the naira, for the second consecutive time in 2020, it became more difficult for pay-TV service providers to fulfil their foreign content obligations which are purchased in dollars, as they needed more money in naira to purchase the same content.

As a result of this inflation, the pay-TV providers had to increase their subscription costs. The country’s most patronised pay-TV operator, MultiChoice Nigeria (owner of DStv and GOtv) raised the subscription cost of some of its DStv packages by 13 per cent in September. A similar upward review of subscription cost was also implemented by the country’s second-biggest pay-TV service provider, Startimes, which raised subscription cost by an average of 22 per cent in August.

Startimes attributed their price increase to the new VAT increase from five per cent to 7.5 per cent and the foreign exchange/Naira depreciation which has impacted its cost of operation, while Multichoice cited inflation and its operational cost for the price increase. Also, industry stakeholders said the 6th Nigerian Broadcasting Code that was released in August 2020, appears to mean more harm than good for the pay-TV industry in Nigeria.

The revised code, which makes content exclusivity illegal, compels content re-selling and sub-licensing and also aims to regulate the prices at which content is sub-licensed. As a result of this, content streaming service providers such as Netflix and Amazon as well as pay-TV channels like iROKOTv and Africa Magic are considering halting further investment in the Nigerian content industry. The Nigerian Broadcasting Corporation (NBC) claims to be doing this to promote “effective competition in the broadcast industry in Nigeria.”

However, these industry players are convinced that this policy banning content exclusivity is a huge threat to their investments. The fact that this policy also compels content producers to sell or sub-license content to other broadcasters, including direct competitors, disincentivises content production

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