The story of DSTV and its rise to continental dominance began well over two decades ago when the brand was launched as the brainchild of a Joint Venture between Multichoice Africa and a Nigerian entrepreneur called Adewunmi Ogunsanya. Starting as the first Pay TV operator in Nigeria, it has spread to 48 other countries across Africa, rivalling the best Pay TV operators in America while providing an irresistible mix of local content and renowned channels.
In recent years, DSTV has been enveloped in controversies ranging from criticism of inefficiency in its service provision, customer exploitation, and arbitrary increases in subscription fees. Underlying all these is a strong claim of anticompetitive behaviour.
Dataxis, in a recent publication, reported that South Africa leads the continent by the degree of dominance in the Pay TV market with 35.8%, followed by Nigeria with 14.5%, while also stating that DSTV was by far the dominant firm in Africa's Pay TV market. In Nigeria, DSTV can count on over 1.2 million subscribers, more than half the total estimated Pay TV audience in the country.
These statistics point to DSTV’s dominance without definitely answering the key question of DSTV's monopoly power. Market dominance suggests a firm possesses a large portion of market share whilst the concept of monopoly is more technical and refers to "any firm that is a sole seller of a product with no close substitute”. This is of little relevance. What matters is whether DSTV has abused its obvious market power to a degree that could be deemed exploitative or reproachful.
For this, anecdotal evidence forms the basis of the case, in the absence of documented legal or regulatory breaches. But there is some basis to the vitriol directed at the media giant. Certain quarters have blamed the current lack of competition in the Pay TV market on DSTV’s anti-competitive activities, pointing to its refusal to sublease some of its most valuable rights to other players, with the lucrative English Premier League package a prime example.
In a sense, such action is consistent with intellectual property protection and the preservation of a unique selling point. Moreover, blame for stagnation in the sector cannot lie entirely with DSTV. Since its entrance in 1995, many other operators have entered the Pay TV market – usually without success, leaving DSTV to operate for years without lasting competition. At a point, Toyin Subair's HITV seemed to have finally come to stay after holding the rights to broadcast the English Premier League for some years, but it too eventually fell short of the expectations of many Nigerians who had hoped it would be the much-needed rival to DSTV.
Even with all the brouhaha surrounding DSTV in recent years, both the courts and regulators have kept their hands off. This may be partly due to the lack of a proper competition act which would have equipped regulators to be able to respond to a wider range of activities.
Fortunately, the government has taken some steps in this direction. In 2016, a bill aimed at competition regulatory reform was passed, seeking to "promote efficiency and expand opportunities for Nigerian’s participation in the world market”. Should this bill take force, it will be a valuable tool in the hands of industry regulators to check unfair practices between firms and customers. This bill would not be the first – a number have stalled in the House of Representatives in the last decade alone, possibly as a result of limited awareness about the importance of such bills or lobbying by incumbent firms seeking to preserve their status.
The consequence of this is far-reaching as corruption and patronage breeds within industries, with colluding firms (and at times, policy makers) able to design policy interventions like waivers and import barriers that create inefficient and inequitable outcomes. The result: minimal competition, limited consumer choice, exploitative prices, and low-quality products.
Despite its faults, the Telecommunications industry offers an attainable model of competition. Following deregulation in 1999, licenses were granted to several firms. Over time, competitive pressures, the entrance of new players, and technological advances have contributed to significantly lower prices, wider coverage, and better quality (though it is sometimes hard to believe).
It is hard to dispute that the existence of multiple large firms was central to the initial success of the sector, unlike the status quo in the Pay TV industry. Moreover, progressive regulation was vital to the phenomenal growth of the sector, once again emphasising the need for clearer regulatory direction in the Pay TV market. The Telecommunications industry is not perfect but it offers some transferable lessons and in some ways, succeeded where Pay TV failed.
However, one marked difference is in the monopoly nature of certain products. Premium content such as English Premier League live games are effective monopolies that subscribers are unwilling to switch away from. This indirect "brand loyalty" makes the Pay TV market more of a natural monopoly.
Cynics would smirk at complaints about firms being exploitative. To some, this is par for the course. Once again, the onus is on regulation to foster the necessary incentives. Firms will always act in the interests of consumers if these align with their own interests. In the case of DSTV, if there has been a breach, it is the role of competition law to address it. The specifics of this are still up for debate but should include all stakeholders. Most especially, long-suffering consumers.
17th January 2017: A previous version of this article incorrectly stated the name of the HITV boss as Tony Subair. This has now been changed.