We are facing very tough times and we hope they do not last. MultiChoice offers a lot of international content denominated in dollars which we have to continue offering our subscribers.
The naira has been devalued officially by close to 70% – from N200 to N320 – but we all know the reality of the parallel market – the naira doesn’t exchange at N320 to a dollar. We haven’t done any price increase this year since the devaluation of the naira.
We have been absorbing the costs on behalf of our subscribers. The naira required to pay for the content we buy in dollars has suddenly become so insufficient. Additionally, we can’t even get the dollars to remit. We are lucky that we have a big shareholder, who believes in our business. We haven’t been able to pay our bills for about a year now and have been supported by MultiChoice Africa. Bear in mind that our business is about 24 years old.
That’s a mature business and not the kind of business that shareholders should be putting money into. That is where the economic downturn has left us. However, we are all very hopeful, as with every Nigerian, that there will be some recovery in the price of oil, so that our economic indices can change quickly, and enable our business recover.
We all know for instance that as soon as the naira was devalued, the prices of cars changed the next day based on something called a “restocking value”. We have held-off on price increases and subscribers are appreciative that we have held-out to ensure that they can still afford our services. Billing is something we continuously look at.
We are at the middle of a project where we are trying to make changes internally to our entire billing structure and software. It might not be the right time but it’s all about continuous improvement for us. We have also recently introduced GOtv Lite with a N400 monthly subscription that has made our service even more affordable. Who would have believed that there would a subscription package for N400? Our message to our subscribers is, “rather than let your TV go black completely, we have an affordable option for you. The pocket has shrunk but there’s something for you.”
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.
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’s holding us on and I am so scared that if that industry went down, we would really be in big trouble in Nigeria.
If you go and speak to the guy in Nollywood, they’d tell you that MultiChoice is commissioning and buying content, and keeping the relationship going. 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. Read full interview here
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