TStv: Odds Against Wholly–Nigerian-Owned Satellite TVs

Financing, content/programming and technical know-how are some of the odds that TStv (Telcom Satellite TV), the new satellite TV provider would need to contend with if it must become a successful Nigerian multi-platform entertainment technology juggernaut, investment analysts have said.
On October 1, 2017, TStv (Telcom Satellite TV), a new satellite TV provider positioning as a ‘wholly-Nigerian-owned’ was launched into the pay TV market in Nigeria with a promise of commercial roll out on November 1,same year.
Before the launch and after, the news was the buzz on both offline and online media as Nigerians across board were excited at the prospect of a player that is not only ‘Nigerian’ in outlook and ownership but would offer them what they have yearned for years but which erstwhile pay TV service providers have refused to offer them- ‘pay as-you-go’ subscription.
The new kid- on- the- block also promises Direct to Home (DTH), Cable TV distribution (CATV), Cellular Backhaul, VSAT and Internet Backbone services and over 70 channels; local and international including Hausa, Igbo and Yoruba channels alongside notable news and sports channels.
However, TStv is not the first Nigerian venture in the pay TV entertainment business to offer eye-popping goodies at outset. There have been a number of Nigerian players who did but did not deliver the goods.
The forerunners
As at the last count, about three Nigerian pay TV have died or are sleep-walking. They include HiTV, Infinity TV and Comsat. The most popular of them, Hitv(High Television) was launched in 2007 and folded up in 2011. Infinity Television was launched in March 2010 as a “100% Nigeria’ pay TV, offering a collection of both foreign and local content programming including a full Hausa, Igbo and Yoruba channels, as a full pidgin channel. It soon ended a flash in the pan. CONSAT(Continental Satellite Limited ) was launched in 2014 amidst pomp and media blitz but had soon after the initial excitement tapered into inertia which it has not been able to snap out of despite a rebranding effort in 2016.
Why they failed
Lack of understanding of the market, lean financial muscles, dearth of content/poor programming, poor management and lack of technical know-how were some of the odds that investment and industry analysts believe midwife the failure of locally-owned pay TV service providers in Nigeria. Many of them struggled with content/progamme development and were not able to produce or procure content that paid entertainment consumers would find worth their while to sustain viewership especially in a market that is already being well-served by foreign competition with deep pockets such as Multichoice’s DStv. Some took loans from banks, they could not service due to financial difficulties.
An investment expert and the CEO, Highcap Securities limited, David Adonri, blamed the failures on absence of feasibility study, poor funding, and lack of technical capacity to handle pay-TV operations.
”A lot of Nigerian enterprises who went into pay TV did not succeed because they did not undertake good feasibility studies. Most of these programmes are foreign and they(Nigerian pay TV owners) were not able to forge bilateral relationships to get them because they did not have the financial capacity.
“HiTV, for instance was banking on the English Premiership League but did not have the financial capacity to compete with DStv and so lost the rights. It also took loans from banks,” Adonri concluded.
A brand analyst and Lead Director,Relik Media Ltd, Ikem Okuhu, shared Adonri’s views. His words: “Many businesses start in Nigeria with very poor market assessment and bloated projections. The reality is that with such poor research, shut-down is only a short-while down the road. Another issue is that television broadcasting and cable broadcasting require long term projections backed by a strong content and marketing budget. In between the time, the company must have to have the budget to wait for me and sustain its pitch.
“But you have a situation where in Nigeria, people initiate businesses based merely on a few weaknesses they see in competition without measuring what the strengths are.”
Content is king
Besides owning a deep pocket, content is key to successful pay TV entertainment. That is where creativity in programming comes to play. Okuhu believed that to win in the market, any new player should be ready for the long haul.
“You don’t expect to gain market share immediately after take off especially when there is competition already, he said, adding, “People are reluctant to change. For them to do so, there must be compelling reason and motivation. It is not usually cost-related, as TSTV is doing now. So for a company to ensure I drop my current service provider to another, there must be a compelling reason that will first meet with my resistance.”
Between 2008 and 2009 when HiTV enjoyed exclusive rights to EPL, Dstv was able to develop wholly local Nigerian content such as Jara and soaps like Tinsel, Shuga, Housemate etc which sustain audience interest until it was able to win back he broadcasting right to EPL..
The magic wand HiTV mismanaged
HiTV, Nigeria’s poster boy of pay tv entertainment service at the beginning, made the DStv weak at the beginning in terms of its popularity. It, however, missed a golden opportunity to break into the game with sport the way UK’s Sky TV did to win over the UK pay TV market by mismanaging its fortune of having the license to the popular EPL during the 2008/2009 football season.
While industry observers blamed the brand failure on debts, mismanagement of corporate funds and ‘mono-content’ as the platform was unable to develop own content besides the EPL, its unique selling point at the time, the HiTV CEO, Toyin Subair would rather blamed it on certain provisions in the shareholders’ agreement that put a ceiling on how the company raises fresh capital.
“HiTV collapsed essentially because of a clause in our original Shareholders Agreement, which allowed a group of founding shareholders to block the company raising money or selling off a subsidiary. This right was exercised to block our capital raise because it was believed to be a possible ploy by another group to take control of the company. We the management were caught in the middle and it took us another 8 months to pursue the alternative that was acceptable to the shareholders but by that time the equity market had gone bust, leaving us grovelling all over for debt,” he was quoted as saying in an interview with an online platform. He, though, admitted that the company was coughing out an average of 1.1billion Naira approximately in interests and guarantee charges annually for over 5 years.
National Business Extra believes that beyond whipping up nationalist feelings, except Tstv tightens its belt against these odds which weighed and eventually drowned its forebears, the newly launched TStv, may end up a castle in the air.