By OMODELE ADIGUN

In the past 10 years, MultiChoice has spent N1.5 billion in acquiring local contents in NIgeria. According to its Managing Director in Nigeria, Mr John Ugbe, the company has played its part in developing local con tents in the country.

He added: “When the Nigerian economy was rebased and became the largest economy in Africa,it gives us cause for celebration that the entertain ment industry was recognized. I think we can beat our chest on that. We were here when we have to put VHS cassette in an envelope, put them in flights just to ensure that Nigerian music video is on Channel O. I am proud when I fly into African coun tries, in some airports, they would call you oga. People speak Ibo or Yoruba to you, it is shocking to me sometimes.”

On thise clamouring for cheaper prices and pay-as-you-view,he said that the price has progreesively come down over the years,while the company will continue to look at how it can introduce lower prices.

Excerpts:

Competition

If you go back to the defini tion of the word, I think I would talk for a whole day. Using that definition actually proves it wrong that MultiChoice is stifling and killing competitors. This is an industry where there is competi tion. Not only is there competi­tion, we play in the market where the users have a choice to buy. Also, we are not public firm like power company in a zone where everybody has to buy from one company. So everybody is there, so you can buy from me or from that guy.

We operate in an industry where there is competition from the perspective of different people being able to freely make a choice as to whom to buy from. There are also a lot of channels avail able to each of the competitors to buy put together to offer a service. I think we have to look at it from a positive angle. I think our competition is not how we can compete with anyone to buy. This is more of a company that believes in creating and in creating, you have to invest not just your time but also money. In creating, you also perform a dual role of developing. Yes, we still go out there in the music industry, in Nollywood, in the entertain ment industry; you have all kinds of people we touch at some points in their careers. I think it is very positive for us to be in competi tion. We don’t see it (competition) like that (in negative light). Even if we are seen as very active in every part of the industry, it is because we believe in investing time, money and energy in build ing the market. I think the simple answer to that would be no; defi nitely we are not a monopoly.

We haven’t been a monopoly at any point. At every point in our development, there has always been competition. I think the subscribers, the users or the customers always have a way to identify whom they want to buy from. Even our name in itself, MultiChoice, actually dwells on the fact that you have multiple choices. And I think the other thing we are trying to do is to provide many choices from which you can buy.

Bill to break MultiChoice monopoly

I think the first question is how do you break monopoly which does not exist. If I want to compare it, it is like if I put a bill before the House (of Representa tives) now to break the monopoly of Coca Cola in the industry. Virtually, every village you go today, there is access to Coca Cola. So, maybe due to the reach of Coca Cola, you can almost begin to feel like it is a monopoly. But in every village you also have some alternatives too. Some of them just a local brew even by the person selling Coca Cola. That itself is a choice. We have always been saying there is competition in Nigeria. And in every mar ket where we operate, we have always been making impacts on the talents in the industry. I think maybe the challenge is that we haven’t been able to tell enough about how we invest.

People often ask about how we buy movies and other contents. We always explain the very simple thing that happened which, at times, gives us joy. If we compare it to a (football) club, maybe in the premiership, buying a player for £50 million. We all rejoice when our club goes out to make such investment. At times, I have wondered that this money has to come from somewhere. A lot of the money comes from TV rights. If you look at the balance sheet of the clubs in the UK, for example, you will see that a lot of the revenue actually comes from TV rights, which, proportionally, has been going up. So, for us, we give what the bill is trying to achieve and also trying to give a deeper understanding of the industry to the general populace, to our numerous stakeholders. We believe in engaging, we try to explain the nature of the industry to our regulators. It is a very well regulated industry. The Broad cast Act is very clear on how we compete in the market.

Pricing

I believe the pricing of the product is proportional to the size of the market. So as a business, we are always looking into how more efficiently we can serve the market, the best price we can sell the product because we want to grow. If you look at the competition in the business over the last 20 to 21 years, you will see where the business is coming from: when there is only one subscription, right down to today when at N1,500, you have access to over 40 channels. Even with GoTV product, that is even lower than that. With N1,000, you have access to many chan nels. So, we have continuously reduced our price over time and it is something the business will come to do; to look at every way to do that. However, we are a responsible business, we have shareholders, different stakehold ers.Even the communities around us are some of our stakeholders.

So, we have responsibility to our shareholders too. We are not going to send our prices down to where the business will no longer be viable, and the business folds up because, at the end of the day, our shareholders expect some form of profitability. Don’t forget, if we take our prices to a point where the business goes out of existence, we will defi nitely send over 20,000 Nigerian families into the streets. They are one of our key stakeholders. Those people that really work for us directly and those who are involved in our business.We have very small businesses involved in doing business with us. We have businesses which started with us as small and medium enter­prises. These are people that stood outside our office here and later go to their own businesses.

And by the share volume of their busi ness today, they can no longer be called small businesses again go ing by the World Bank definition of small business, which must be under $10 million. They now have something bigger than that. So we have always been looking at how to make our services more affordable. Before MultiChoice came to the market, there was no cable TV in the market. We have reduced the entry price of satellite pay TV in Nigeria. Progressively, we have also reduced the cost of the product while developing better quality programming. And I am proud to say, homegrown programming. By this we have reminded ourselves what it is to be a Nigerian in Africa today.

Pay-per-view

I think, maybe, one of the chal lenges is that people haven’t really explained what pay-per-view really means. I give you one example: If Manny Paquiano or Flloyd Mayweather is going to have a big boxing match in US, it will be available on pay-per-view. So, if you are in US, you will be paying your monthly subscription, which could be anything, $50, $100, whatever it may be. The managed fight would be on pay-per-view for $70. Boxing match will last for two hours. That fight alone would cost you that much on pay-per-view. So, that is pay-per-view. Your subscription, which you pay monthly, would not give you that match. Guess what we do? We give you that fight as part of your subscription in Nigeria.So the pay-per-view manual in the US indicates that you pay for that one match.

I think people are complain ing about the power (problem) in Nigeria. It is something we have to collectively work on. However, I don’t have the technology to know when you are not watch ing. I can’t tell when you are not watching. There is nothing tech nologically available for me to stop that kind of billing when you are not watching because your decorder doesn’t talk back to me that you are not watching. That is on one hand. On the other hand, the model of our pricing shows that it is aggregated price.

The business model of pay TV can’t be compared with the telecoms where you have the pay-per-second billing system. I will give you an example: when you go to a cinema, how much do you pay to watch a film? Something like N2,000. That is one movie.So, imagine if we charge that much. How much do you think you will pay at the end of the month if we sold the contents strictly based on what you want? I would also explain to you: if you buy a ticket and you walk into a cinema and midway into the movie, you get bored and walked out, would you get part of your money? Or if you walk into a stadium and buy a ticket to watch a football match and at half time, you say, you guys are not playing well at all. You know some of these games can be quite boring, and you are wondering what is happening, you have better things to do at home.

You stand up and leave. Would you get a refund? So by the nature of entertainment, I can’t also go to the guys I buy the movies from and tell them, ‘know what? This movie I purchased from you the day the guys were watching it, after five minutes everybody stopped watching and said they were not interested in your movie. They all switched off their decoders. So I need you to refund me.’ So we have to ag gregate contents and put a pricing model we can sell to users. That is different from telecoms. In telecoms, they don’t buy some thing and sell to you. They have a spectrum, you too occupy the spectrum and it is finite. Maybe there are 200 channels for only 200 people. So if there are 2,000 people there, there will be con gestion. So everybody is charged. For 2,000 people, they will all be charged appropriately. For us, it is more of the aggregate of contents we put together that we are able to offer, that is, the contents.

Selling contents to competi tors

Like I have said, I think our efforts have been in developing contents. And in de veloping these contents and what contents you bid to buy. There are even some contents available on different platforms, depending on whatever the owners of the con tents want to do with them, how they want to exploit the contents. So, if you put in a bid, something you want to explore in a different way from what the owner says, I would have a deal with the per son; maybe I put on more value on my content. So there is differ ence for everything you do. Even for people that do movies, somebody may say I just want to put it on DVD from day one. I just want to sell as many DVDs as I want. Some may say, no, let me go to the Cinema first. And they own the contents. So you have to respect the content owners’ wish.

For us is to the regula tions covering every thing in the industry. We are independent company. So we will set our prices, which is reality in our market. It is like someone telling you the cost of coat in UK and how much they are selling it here. Why is your coat costlier here than there? The cost of my doing business here is different from the cost of doing business there. I fix my price, but I always welcome it when people do those comparisons, the real comparison. One, they should look at the real amount, then, two, take consideration of the fact that we are independent company, a part of global company but we have independent operations. So, if you are going to compare my price with other people, particu larly my counterpart who doesn’t use a generator to do business, you have to think of how I fill the generator as part of cost.

Capital flights

In the past 10 years, Multi Choice has spent N1.5 billion in acquiring local contents in Nigeria. When the Nigerian econ omy was rebased and became the largest economy in Africa, it gives us joy and celebration. The enter tainment industry was recognised. I think we can beat our chest on that. We were here when we had to put VHS cassettes in an enve lope, put them in flights just to ensure that Nigerian music video is on Channel O. I am proud when I fly into African countries, in some airports, they would call you oga. People speak Igbo or Yo ruba to you; it is shocking to me sometimes. So, they expect that you must have mastered all the languages in any way. I think the rest of Africa now know Yoruba. They can say a few words and ask about you. It is daunting if you look at that, how we invest; we just completed a new studio. We lost our studio to a big fire. We are looking forward to building a bigger studio; it is a bigger project which we will announce soon. For us, we constantly investing in sports. If I tell you how much we invest in the Nigerian League, you will be amazed how much we spend to put the league game on air. We don’t believe in one camera doing the recording of the Nigerian League match, we do it at the highest quality.

Digital migration

I think we’ve made a big sup port for the issue of digital migration in Nigeria with our very strong products – GoTV- pri­vately being used to support the migration process. For now, we are working with the regulator. At the launch in Jos, where the issues of terrestrial TV were inaugu rated, we have network that was able to show clearly the massive investment in rolling out the network. In terms of support for digital migration, we own digital TV, we’ve been giving Nigerians that experience. So we have come with a lot of digital broadcast that are mobile and we’ve been help ing with our long experience.

Listing on NSE

One, in term of assisting Nollywood, we have always done that. Let’s not shy away from our responsibility. We are always for development in terms of contents. That is what we have been doing for the industry. We have also trained some of our people. In terms of listing on the Nigerian Stock Exchange (NSE), there is a different reason for companies to list. I think that decision is for our shareholders. From time to time, we’ve looked at what we are doing. I think we have a short memory in this coun try. That is why we easily forget things. MNet, our sister company, was listed on the NSE. It was the first foreign company to be listed on the Exchange. It made a very huge investment on the Exchange then. So we have once been listed. And right now, for our business, the decision to list is for our shareholders to take.

Job creation

The approach we always take has always been that of the adage of teaching people how to fish, rather than giving people fish. We directly employ people, but that’s critical to the business. I mentioned earlier the smaller businesses; we have 6,000 of them engaged. If you want to talk about people, our products, they are over 10,000 at the database, we are training people and we continue to build the relationship to ensure that they are in busi ness. If you look at the ecosystem, indirectly, we have been touching about 10,000 households, if you think of the number of households doing business with us. When you buy a movie, you will be touching actors, producers, script writers, directors, customers, the carpen ters who made the beds. That is the strength of the entertainment industry. That is why we feel connected with the government and everyone in the entertainment industry. If you talk of a man who makes one movie, think of many movies he would churn out. The appetite is there, not only in Nigeria. And that is how our gov ernment can earn more money. So we have touched people directly and indirectly, we would continue to do it and continue to export our entertainment.
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oga dey enjoy ur loot until Nigerians wise up(politicians ) nd wen we hv a better alternative