We’re halfway through June and halfway in the Year.
Remember, It’s better to do less than you hoped than nothing at all.
Now to the stories of the week
C’mon, Let’s have some too
The Nigerian Broadcasting Commission (NBC) is saying ‘no’ to monopolised contents from PayTV and Video-On-Demand platforms in the country.
What this means: Video-on-demand and PayTV platforms like Netflix, Dstv, IrokoTV other independent firms that provide visual services, are mandated to share their exclusive contents to other local broadcasters like NTA, for a fee which will be decided by NBC.
Why this: The regulation is compelling PayTv networks to sub-license their in-house produced contents to other players at a price that the commission would regulate. The Nigerian government thinks this move will give room for healthy competition in the broadcasting industry.
What else does it say:
For a programme to qualify as local content, the producers, writers and directors must be Nigeria. A minimum of 75% of cast and production expenses are provided by Nigerians or Nigerian companies.
The code also requires that all online broadcasters are registered with the broadcasting commission and also seeks that these private companies allocate a minimum of 20% of their weekly broadcast hours to air public service programs in case of emergencies and such programmes are expected to not be less than 120 minutes per transmission day.
DSTV’s new deal with Netflix and Amazon
Multichoice signed a major deal that Netflix and Amazon will be operational on DSTV. This means that Netflix and Amazon will offer their streaming services through the Dstv decoder but just for customers under the explorer product.
But with this new regulation...
This deal was supposed to be a mega step to retaining customers whom Dstv has lost to the streaming giants but with the emergence and perhaps, enforcement of this new code, investing in exclusive contents from Netflix will be totally pointless for multichoice.
What this means for other private businesses
This is an interference, which in the long term, will deform the Nigerian market. For Netflix that just launched in Nigeria a few months ago and had already started working on exclusive products, with this code, it will be illegal for Netflix to have sole rights to their contents in Nigeria and are required to give out their content against their will.
Also, anyone who goes against this provision will risk paying a fine of ₦10 million ($25,773).
Kenya’s efforts to Increase Tax Revenue
Governments across the world are struggling with generating revenue through taxes because of the effect of the pandemic on business operations. A shift in consumer behaviour to online presents a great opportunity for the government to make money.
Digital taxation. France, Italy, UK, India, Indonesia, Mexico, Thailand, Nigeria and Kenya have all drafted some rules regarding the taxation of companies operating online amidst concern that some companies generate revenue in some countries while avoiding tax.
On 1st June 2020, The Kenya Revenue Authority put together a draft policy document that proposes taxing music, e-commerce, cloud storage to transport hailing platforms. It is due to take effect in 2021. This is quite similar to calls for change in tax legislation in Europe, where countries such as France are pushing to make large tech companies doing business over the internet pay tax where they sell their services, rather than in tax havens deliberately chosen.
The Kenyan government is well within its right to tax companies generating revenue within the confines of its country online or offline but the effects of these taxes may cause a spike in the price of goods which are passed onto consumers and citizens. It could also hurt SMEs building their businesses. For the government, it can be an easy way to collect taxes cheaply because it limits physical audits and visits to taxpayers.
On the flip side, while there are questions about the effectiveness of the move, the only way to test its effectiveness is to implement these rules first.
On the bright side, it is good to see leaders being proactive to solve challenges of the modern era. The Kenyan government has also launched a Virtual Safari Livestream campaign to showcase game safaris in some parks and reserves across the country, because of the limitation of travel that affected Kenya’s international tourism business which recorded earnings of $1.61 Billion in 2019.
How Multichoice performed in 2020
Multichoice, The South African company that operates a major satellite TV service (DSTV) in Sub-Saharan Africa has released its financial report for 2020 ( period ended March 2020) and has plans for 2021.
Total subscribers: 19.5m up 5%
Revenue: ~$3b up 3%
Profit: ~$475m up 14%
Breakdown: It added about 900,000 subscribers within the last year, but a closer look at the figure shows that half (546k) came from South Africa while the rest (~400k) came from the rest of Africa. Also, this increase is slightly less than the 1.1M it grew by in its prior fiscal year.
Pricing decisions: Over the course of the last year, there have been different price changes. Flat prices in South Africa & Nigeria, price reductions in East Africa and price increases in Angola, Zambia and Ghana.
Subscriber growth in major countries: South Africa +16%, Nigeria +8%, Kenya 0%, Zambia -11%, Angola -2% , Zimbabwe -41% (lost ~92k subscribers). It is obvious Multichoice is reliant on South Africa & Nigeria for its growth.
Multichoice should see a spike in subscribers with football leagues returning and the effects of the lockdown wane off.
As it heads into its new financial year, we’d be looking out for what It’s deal with Netflix & Amazon prime, would look like and what it would mean for it, in terms of growth in subscribers and revenue.
Also, What would happen to its own Video On Demand service — Showmax?
Worth Reading 📚
“Until the lion learns how to write, every story will glorify the hunter.”
― J. Nozipo Maraire
Thank you for reading this week’s edition 💙