The Managing Director of MultiChoice Nigeria, Mr. John Ugbe has said that his group has all it takes to sustain the geometric growth in Nollywood industry or kill it.
In an interview with some Nigerian journalists in South Africa recently, Ugbe said “What we’ve done is to continue to support the growth of the entertainment industry. I think it is one of the last few industries that are holding us on and I am so scared that if that industry went down, we would really be in big trouble in Nigeria”.
He said if anyone goes to speak to the guy in Nollywood, they’d tell you that MultiChoice is commissioning and buying content, and keeping the relationship going.
But in clear terms, Ugbe noted that “We can’t just take a decision not to buy because if you look at the effect MultiChoice has on the economy – the entire Nollywood supply chain – a decision not to buy content would kill the industry. We remain the backbone of that industry”.
On the rumour making the rounds that MultiChoice, operators of DSTv and GOTv are likely to hike their monthly tariffs, Ugbe said “As a company, we always give notice before any price increase and I think we are one of the few companies that send out a notice to say that from “x” date, we are going to increase prices”.
“I also think people are aware of the present state of the economy. I have spoken to a few people who have asked when we are going to increase prices and I said to them that we are trying to hold-out. Some people are not going to be happy, but as much as possible we will put the information out there to ensure that people understand. We will appeal to everyone to look at the situation objectively.
On how the National Assembly and the Consumer Protection Council (CPC) will see any price hike, the managing director said “We have an open-door policy with the National Assembly and the Consumer Protection Council and we explain to them. I think a lot of people fail to understand our business. We are a company that should make profits and we do not take excessive profits. We have to stay alive; we cannot wake up one day and announce to be public that we are gone. The reality of the pay-TV industry is that you sign three to five- year contracts with content suppliers. You have to assure these suppliers that you can buy the content to create a product you can sell.
“Unfortunately, you cannot go to the US and tell Time Warner that you want to pay for the content in naira. They will have a good laugh. It’s as simple as that. You cannot subscribe to a news agency abroad right now without remitting their payments in dollars. You don’t have a choice, otherwise they will cut your news feed. That’s the reality. We will as much as possible appeal to the media and everyone and explain the reason for a price increase (if it happens), and I believe people will show us some empathy. It’s business.
Continuing, Ugbe noted that “We recognize that the customers in Nigeria are under pressure and we are doing everything that we can to try and absorb as much costs as we can before we put any price increase into the market. I think that it will become inevitable for us to put in place some price increases but in the meantime, we are trying as much as we can in the business to take costs south.
“We are going back to our suppliers to renegotiate the cost of content down, where we can. But in many instances we are tied into long-term contracts. For example, with the EPL, you are signed on for about three seasons and you are locked-in with those prices.
“We are trying to do whatever we can to first reduce the impact as much as we can ourselves, and then only will we look to potentially put in some prices into the market. It is a big concern and John raised a point. What worries us in the short term is not that the currency has been devalued by as much as it has, but that the parallel market is trading significantly worse and that there is still no dollar liquidity. And as John said, MultiChoice Africa is effectively funding the Nigerian business while we hope that things start to stabilize. But again, we have been in this situation before.
