Pay-TV Market Content War: DStv vs HiTV

Pay-TV business is a deep pocket business. But the extremely expensive core rights that will make a success of the business have to be fought for. For so long, DStv held on to the most relevant rights in sub-Saharan Africa and beyond. HiTV struggled and wrestled a chunk of the rights from DStv albeit at a staggering sum which experts considered somewhat ludicrous. But at the moment, it seems the end is justifying the means. While other players like DAARSAT are edging on, DStv is not about to give up. And so the content war rages on. Ralph Tathagata writes.

Introduction
Nigeria’s fundamental position in sub-Saharan Africa and the entire African continent, given her bulging population and huge market size, unarguably underlines her as a dominant force in the pay-TV market. This enormous market size, analysts reason, is what attracted some pay-TV players, prominent among them being the South Africa-based Multichoice and its DSTV service, into the country. After a consistent acquisition and persistent hold on premiership rights and other commercially rewarding channels by DSTV, HiTV and recently Daarsat among other pay-tv players came into the scene with some promises to loosen the market.
Competition
On the same hand, the competitive nature of the service providers makes the Nigerian pay-TV market a thought-provoking one. The leading players, namely DStv, HiTV and the latest DaarSat have not in any way masqueraded their purpose to struggle for market leadership in their desperate bid for the lion share of consumers’/subscribers’ minds and pockets.
Consequently, this desperation to outdo one another in the drive for premium content/property acquisition in order to remain relevant in the market has obviously subdued the will of other smaller players like FSTV among others who displayed initial interest to partake in the market share. The burgeoning number of Nigerians who are passionate lovers of sports, especially football, has also swelled the customer base of pay-TV models in the country.
While DSTV invested significantly in rights and was charging relatively high monthly rates for access to its services, HiTV chose to adopt a two-pronged strategy: firstly, to provide subscribers (especially in the mass market segment) with lower rates and secondly, to acquire compelling content (football to be precise) to drive that process. Experts have described sports rights as the battering ram of successful pay-TV business.
Analysts believed that if HiTV or any serious competition could kick down the front door of DSTV and get more subscribers by acquiring premiership rights, it will sufficiently persuade them (subscribers) to switch from the incumbent. Evidently, HiTV has made significant progress in that direction. But the development of deeper bouquet outside football is yet to be seen.
In the event, DSTV after its initial shock and anger, fought back, and is still fighting back, with a range of tactics including low-cost bouquets like the compact and family. But if the competition was good for subscribers, it has been hectic between DSTV and HiTV as the battle has turned into something more like trench warfare.
Viewership
For so long, DStv bestrode the Nigeria’s premier pay-TV terrain almost like a colossus, priding itself with state-of-the-art technology and contents. In response to that, HiTV came to the market scene with an intent to rival by quickly identifying ‘football’ as the key content that could conveniently put it in contention for a considerable share of the Nigerian pay-TV market. One of its key marketing strategies was to take away the EPL, the UEFA Champions league, the La Liga, Serie A – all of which had been the exclusive preserve of DStv. To a large extent, HiTV achieved its aim, coughing out $28 million (N4.5 billion) to acquire the EPL rights for three seasons spanning 2007 to 2010. At the moment, it is angling to have it extended to 2013.
Like its predecessor, HiTV also prided itself at the end of 2008 season (second quarter of 2009) for having acquired almost 80 per cent rights to the rewarding UEFA Champions League season that began last month (August 2009), added to the EPL and La Liga rights it already had. Dramatically, in March, 2009, DSTV re-emerged with a media buzz that it has won back the La Liga rights. Meanwhile, analysts questioned the benefit and positive impact of this frantic scramble for foreign leagues on the Nigerian local league market like the Globacom Premier League among others.
However, observers commended DStv for investing in sport development in Nigeria. The commendation reportedly came as a result of its creation of an exclusive channel to broadcast Nigerian local league, the Globacom Premier League, which exposes local talents to international market opportunities and encourages transparency by reducing fraudulent practices like match-fixing among others.
Market watchers were also of the opinion that whether the rights are concentrated in the custody of one operator or shared among the big players, there will always be a higher price to be paid by sports-loving Nigerians who would rather starve than miss the matches. Hence, the enthusiasm by football aficionados to acquire different satellite TV decoders to ensure that the matches are screened live directly to their living rooms at any given hour of the day. But beyond this consumer enthusiasm, players like HiTV and Daarsat are still faced with the challenge of how to wrest the market from the firm grips of DStv which already had won the hearts of thousands of subscribers with manifold bouquets that apparently hold viewers glued to the screen apart from football.
Analysts had equally identified the presence of some premium soccer contents (English Premiership and the European Champions League) and the broadcast rights conferred on HiTV as a marketing clout in the pay-tv market that has drawn a mass appeal.
On the consumer side, David Omini, a DSTV/HiTV subscriber, believes HiTV has been able to snatch a chunk from DSTV because of the premiership rights.
“As a matter of fact, I have been a subscriber of DSTV for a long time but because of the premiership I had to subscribe to HiTV in the second quarter of 2008. I am not the only person; almost everybody in my neighbourhood has hitv,” he says.
He also reinforces the generally held view that Nigerians are manic football lovers attributing it to the increase in HiTV subscription.
“You know we Nigerians are crazy about football. I suppose that is the key reason why even people who subscribe to DSTV are also going for HiTV even though the signals are still poor for now,” he adds.
But M2’s recent survey reveals that in spite of the torrents of complaints of poor reception of HiTV signal and poor picture quality among subscribers, they (customers) still inundate its offices to purchase its decoders. It is however left to be seen whether this influx will remain after the season.
After Premiership, What Next?
Apart from soccer, these pay-TV content providers are also using a variety of other offerings to woo subscribers, in a bid to sustain or retain their loyalty and patronage during and after the soccer seasons.
“Aside football, we have numerous bouquets that cater for the viewing needs of our subscribers,” said Segun Fayose, HOD, Corporate Communications, Multichoice Nigeria.
On what some of these bouquets are, Fayose disclosed that DSTV has more than 60 offerings which engage the viewing public aside from premiership and other sporting activities.
“Football rights alone is not enough to get DStv/Multichoice customers to peel off quickly enough. We have 60 video channels and 40 audio channels. Subscribers might want the premiership matches but other family members would still miss content on our competitors’ bouquets that only pride on premiership,” he added.
However, efforts made by M2 to get Tony Subair, MD, HiTV, to comment on the present state of marketing and the alternative contents that HiTV is bringing on board to support the ongoing premiership in terms of consumer satisfaction failed. A precise text message sent to his phone was not responded to; neither did he pick several calls made to his cell phone.
Content War
In recent times, it has been dollars for dollars, content for content and technology for technology since players like HiTV and Daarsat joined the Nigerian pay-TV market. HiTV, against the previous experience of viewers who witnessed the rise and fall of the likes of FSTV, TITV and others, appears bent on providing contents that can march with what the incumbent DStv is providing to the to the homes of thousands of Nigerians.
Some of the hot and sizzling channels on DStv are being assertively contested by HiTV in order to drag more market shares. Apart from the current premiership rights, channels like CNN has been marched with Jazreel; African Magic with hiNolly; Super Sport with hiSoccer; Big Brother Africa with Koko Mansion and Channel O with Nigezie among others.
However, the possibility of HiTV succeeding brilliantly at these other channels on DStv is yet to be seen.
Future Growth Patterns
The growth potential for pay-TV services in Nigeria, as well as the influence of current market conditions, new licensing regulations, and new technologies cannot be overemphasized.
A recent report from Pyramid Research, a research company based in the UK, predicts that Nigeria’s pay-TV subscription levels will increase at a CAGR of 13% while total regional pay TV revenue will almost double 2008 levels by year-end 2013.
The outlook, it says, is encouraging. Growth will accelerate significantly as regulatory changes and rising incomes enable new pay-TV entrants like HiTV and Daarsat to begin tapping the region’s very under-penetrated pay-TV market.
According to sources close to HiTV, from a mere 10,000 subscribers, the figure rose to 100,000, and as at March 2009 HiTV was on the verge of hitting the 200,000 subscriber mark, courtesy of the EPL addition. But the real gains showed up in Subair’s account books because, with an average subscription of 100 000 and subscription fee of N4 000, not less than N9.6billion has hit the company’s account within the two years the subscription has lasted. But, for sure, the figure is more.
However, a survey has shown that TV penetration of the Nigerian market is quite high for Africa, with nearly a third of households possessing televisions. It is therefore unsurprising that Nigeria is reportedly the biggest market for pay-TV content at least in Sub-Saharan Africa. At the end of 2008, it was announced that Nigerians, in excess of 450,000 households took some form of paid-for TV content.
But pay-TV subscription in Nigeria is still a far cry from what supposedly obtains in some countries like South Africa, with a subscription base of over 10 million out of a population of 47 million. Whether the current content war between the major contenders will bring the desired expectations of consumers is yet to be seen.

In the event, DSTV after its initial shock and anger, fought back, and is still fighting back, with a range of tactics including low-cost bouquets like the compact and family. But if the competition was good for subscribers, it has been hectic between DSTV and HiTV as the battle has turned into something more like trench warfare.
Viewership
For so long, DStv bestrode the Nigeria’s premier pay-TV terrain almost like a colossus, priding itself with state-of-the-art technology and contents. In response to that, HiTV came to the market scene with an intent to rival by quickly identifying ‘football’ as the key content that could conveniently put it in contention for a considerable share of the Nigerian pay-TV market. One of its key marketing strategies was to take away the EPL, the UEFA Champions league, the La Liga, Serie A – all of which had been the exclusive preserve of DStv. To a large extent, HiTV achieved its aim, coughing out $28 million (N4.5 billion) to acquire the EPL rights for three seasons spanning 2007 to 2010. At the moment, it is angling to have it extended to 2013.
Like its predecessor, HiTV also prided itself at the end of 2008 season (second quarter of 2009) for having acquired almost 80 per cent rights to the rewarding UEFA Champions League season that began last month (August 2009), added to the EPL and La Liga rights it already had. Dramatically, in March, 2009, DSTV re-emerged with a media buzz that it has won back the La Liga rights. Meanwhile, analysts questioned the benefit and positive impact of this frantic scramble for foreign leagues on the Nigerian local league market like the Globacom Premier League among others.
However, observers commended DStv for investing in sport development in Nigeria. The commendation reportedly came as a result of its creation of an exclusive channel to broadcast Nigerian local league, the Globacom Premier League, which exposes local talents to international market opportunities and encourages transparency by reducing fraudulent practices like match-fixing among others.
Market watchers were also of the opinion that whether the rights are concentrated in the custody of one operator or shared among the big players, there will always be a higher price to be paid by sports-loving Nigerians who would rather starve than miss the matches. Hence, the enthusiasm by football aficionados to acquire different satellite TV decoders to ensure that the matches are screened live directly to their living rooms at any given hour of the day. But beyond this consumer enthusiasm, players like HiTV and Daarsat are still faced with the challenge of how to wrest the market from the firm grips of DStv which already had won the hearts of thousands of subscribers with manifold bouquets that apparently hold viewers glued to the screen apart from football.
Analysts had equally identified the presence of some premium soccer contents (English Premiership and the European Champions League) and the broadcast rights conferred on HiTV as a marketing clout in the pay-tv market that has drawn a mass appeal.
On the consumer side, David Omini, a DSTV/HiTV subscriber, believes HiTV has been able to snatch a chunk from DSTV because of the premiership rights.
“As a matter of fact, I have been a subscriber of DSTV for a long time but because of the premiership I had to subscribe to HiTV in the second quarter of 2008. I am not the only person; almost everybody in my neighbourhood has hitv,” he says.
He also reinforces the generally held view that Nigerians are manic football lovers attributing it to the increase in HiTV subscription.
“You know we Nigerians are crazy about football. I suppose that is the key reason why even people who subscribe to DSTV are also going for HiTV even though the signals are still poor for now,” he adds.
But M2’s recent survey reveals that in spite of the torrents of complaints of poor reception of HiTV signal and poor picture quality among subscribers, they (customers) still inundate its offices to purchase its decoders. It is however left to be seen whether this influx will remain after the season.
After Premiership, What Next?
Apart from soccer, these pay-TV content providers are also using a variety of other offerings to woo subscribers, in a bid to sustain or retain their loyalty and patronage during and after the soccer seasons.
“Aside football, we have numerous bouquets that cater for the viewing needs of our subscribers,” said Segun Fayose, HOD, Corporate Communications, Multichoice Nigeria.
On what some of these bouquets are, Fayose disclosed that DSTV has more than 60 offerings which engage the viewing public aside from premiership and other sporting activities.
“Football rights alone is not enough to get DStv/Multichoice customers to peel off quickly enough. We have 60 video channels and 40 audio channels. Subscribers might want the premiership matches but other family members would still miss content on our competitors’ bouquets that only pride on premiership,” he added.
However, efforts made by M2 to get Tony Subair, MD, HiTV, to comment on the present state of marketing and the alternative contents that HiTV is bringing on board to support the ongoing premiership in terms of consumer satisfaction failed. A precise text message sent to his phone was not responded to; neither did he pick several calls made to his cell phone.
Content War
In recent times, it has been dollars for dollars, content for content and technology for technology since players like HiTV and Daarsat joined the Nigerian pay-TV market. HiTV, against the previous experience of viewers who witnessed the rise and fall of the likes of FSTV, TITV and others, appears bent on providing contents that can march with what the incumbent DStv is providing to the to the homes of thousands of Nigerians.
Some of the hot and sizzling channels on DStv are being assertively contested by HiTV in order to drag more market shares. Apart from the current premiership rights, channels like CNN has been marched with Jazreel; African Magic with hiNolly; Super Sport with hiSoccer; Big Brother Africa with Koko Mansion and Channel O with Nigezie among others.
However, the possibility of HiTV succeeding brilliantly at these other channels on DStv is yet to be seen.
Future Growth Patterns
The growth potential for pay-TV services in Nigeria, as well as the influence of current market conditions, new licensing regulations, and new technologies cannot be overemphasized.
A recent report from Pyramid Research, a research company based in the UK, predicts that Nigeria’s pay-TV subscription levels will increase at a CAGR of 13% while total regional pay TV revenue will almost double 2008 levels by year-end 2013.
The outlook, it says, is encouraging. Growth will accelerate significantly as regulatory changes and rising incomes enable new pay-TV entrants like HiTV and Daarsat to begin tapping the region’s very under-penetrated pay-TV market.
According to sources close to HiTV, from a mere 10,000 subscribers, the figure rose to 100,000, and as at March 2009 HiTV was on the verge of hitting the 200,000 subscriber mark, courtesy of the EPL addition. But the real gains showed up in Subair’s account books because, with an average subscription of 100 000 and subscription fee of N4 000, not less than N9.6billion has hit the company’s account within the two years the subscription has lasted. But, for sure, the figure is more.
However, a survey has shown that TV penetration of the Nigerian market is quite high for Africa, with nearly a third of households possessing televisions. It is therefore unsurprising that Nigeria is reportedly the biggest market for pay-TV content at least in Sub-Saharan Africa. At the end of 2008, it was announced that Nigerians, in excess of 450,000 households took some form of paid-for TV content.
But pay-TV subscription in Nigeria is still a far cry from what supposedly obtains in some countries like South Africa, with a subscription base of over 10 million out of a population of 47 million. Whether the current content war between the major contenders will bring the desired expectations of consumers is yet to be seen.