Pay-television: Insights from consumers

There are a number of indicators that underscore the rising profile of television in Nigeria. For instance, last year, 1,115,985 flat panel television sets were sold across the six geopolitical zones. Also, in the first seven months of this year some 547,000 units have been sold already (based on data provided by GFK Nigeria).

What is even more interesting is that most of the television sets sold are of the 24, 32, and 42/43 inches range; confirming that the crop of Nigerians buying them have a preference for larger screens.

These days, the average Nigerian home has at least two television sets. There seems to even be a push to go beyond the second television set in most homes. (The trend is that when a flat panel TV set is acquired, it is placed in the living room. The cathode ray tube TV set which used to be in the living room is then moved to another room within the house.)

In the midst of this expansion in the number of television sets in use, there is evidence that more Nigerians subscribe to pay television services now than five years ago. Also, there are more pay TV service providers operating in the country now than half a decade ago.

The expansion in number of subscribers and clientele has also engendered an expansion in programming options and higher spending on pay television.

Our research leads us to the conclusion that on average, the Nigerian household spends between N3,100-3,600 monthly on pay television, while the rest of the population of subscribers is skewed heavily towards more expensive bouquets.

We also discovered that the correlation coefficient between personal income and expenditure on pay television is weak and that the demand for pay television is price inelasticity (especially among those who already use a particular service provider).

This is because of the pride of place which television occupies in many homes. These days, most families spend between 1-6 hours daily watching television.  On weekends much more hours are devoted to television.

There is a general air of satisfaction with the quality of cable services in the country, albeit, there are a number of grey areas which consumers believe should be addressed.

A greater number of respondents have a high opinion of the quality of sound and pictures beamed across the cable networks. (Although a cross tabulation across networks shows that some service providers are clearly in the red compared to others in terms of both picture and sound quality.)

However, taken as a group, there are more respondents who rated the networks as “very good,””average” and “good” than those that rated them as “bad” or “poor.” (See Chart 10).

Same goes for their perception of the quality of customer care service that they have received from service providers. Half of respondents rated the customer care experience “average,” 35% rated it as “good” while 4% rated it as “very good.” Only 4% and 7% rated the customer service as “very poor” and “poor” respectively (See Chart 11).

The market still has a lot of room for expansion and we believe that pricing and a promise of superior quality of service in terms if channels on offer and sound and picture quality still remain the most potent tool to recruiting new customers.

More than three-quarter of those we randomly surveyed say they subscribe to the Multichoice network, with regular DSTV accounting for 70% of consumers. The Multi Choice Go-TV network commands a decent 23% of the market while StarTimes accounts for 28% (based on surveyed responses). Other players seem to still be operating in the fringes (see Chart 2).

A very small segment of respondents say they use more than one service provider at a time. Thus the prospect of consumers patronizing more than one service provider at a time is low. Based on our survey and focus group discussions, it can be concluded that the market is less dynamic than most. As long as customers feel satisfied with the services they are getting, they are less likely to migrate to other service providers.

Of those surveyed, 93% have not changed service providers in the last 12 months, while only 20% say they use two providers simultaneously.

 Apart from the fact that pricing is not significantly different across service providers, the additional cost of switching to a new service provider may be responsible for high customer loyalty. We acknowledge that quality of service and innovation may also have engendered some level of loyalty among consumers.

(Experimental) Selling models which have subsidized cable equipment for new consumers are apt, but if these models are not backed by the right programming, quality of service and innovation, the results of such endevours will hardly last.

We note that most respondents would prefer to have access to different cable stations on different TV sets at the same time; they are however constrained to watch the same station across all their TV sets. Except on occasions where this option is prearranged with the service provider.

Analysis of the open ended questions we posed to respondents shows that the Nigerian pay-TV consumer is interested in other possibilities that are available from service providers. Respondents are willing to even pay for other services if they are made available.

More than half of them would like to get internet access through their cable service providers if it is possible. Seventeen percent welcome telephone services, while 13% will be glad if cable service providers can offer them home automation/ security systems services.

According to Wikipedia, “beginning in 2004 in the United States, the traditional cable television providers and traditional telecommunication companies began to increasingly compete in providing voice, video and data services to residences. The combination of television, telephone and Internet access is commonly called “triple play”, regardless of whether CATV or telcos offer it.”

Apart from this, there seems to be a pattern of desire for programming in particular areas. More than half of respondents, 67%, expressed their desire to have channels and programming which are educational in nature. Thirty-eight percent of respondents expressed their desire for programming which focuses on the activities of government (government meetings), we believe that this is beyond the scope of cable service providers (See Chart 3).

Respondents expressed a desire to have the pricing model of cable services changed. “Let’s have a pay-as-you-use model, like what the telecoms companies have. Most times there is no power supply to watch television so you end up paying subscription which you hardly use” most respondents said, in response to questions bothering on what they would like to see change among the cable service providers.  Other equally important responses to the open questions include:

·         Give us more educations programmes and more documentaries

·         Let’s have more free to air stations and programmes

·         Why is it that with a subscription of just N1,800 you can access the African Magic Youruba and Hausa channels on DSTV while you must cough out N5,000 before you can access the African Magic Igbo? Is there an assumption that Igbos are rich and can pay?

·         Not all stations on the cable networks have the same quality of pictures can this not be worked on?

·         When it rains for days, signal quality diminishes, is there no way to stop this

·         Give us more content

·         I will like the service providers to extend unused time

·         More channels for Go-TV please!

·         StarTimes should work on its signals

·        I will like my cable TV service provider to work on its signal strength

·         The cost is astronomically high

·         There is too much repetition on these entertainment programmes

·         These service providers only call when you have not paid your subscription, is that the only time they care for their customers?

·         There should be an attempt to reduce prices

·         Service is poor some of the time

 The information provided above is based on analysis of data gotten from distributed questionnaires and focus group discussions. The research process was completed between September 31 and October 14, 2015.

A random sample of adult male and female respondents (all above 18 years of age) who are customers of various pay television service providers took the survey and participated in focus group discussions.

Several factors were put into consideration in selecting individuals who took the survey but the aim was to get a panel that cuts across the population. Care was taken to minimize sampling bias by making the selection process as random as possible. Analysis was done using SPSS and Microsoft Excel for windows.

Questionnaire distribution and analysis was undertaken by researchers at BRIU, which is a consultancy within the BusinessDay Group. BRIU conducts several forms of marketing research for clients, conducts surveys, hosts focus group discussions, and writes business plans for clients. We can be reached on research@s19080.p615.sites.pressdns.com/en.