Rising cost of cable TV in Nigeria

Nigeria’s economic landscape has been fraught with challenges over the past decade. In 2013, the inflation rate stood at 8.50%, but by December 2024, it had surged to 34.8% before slightly easing to 24.4% in January 2025—a reduction more due to a statistical recalibration than an actual improvement in economic conditions. This inflationary pressure, coupled with the volatility of the Naira, has made it increasingly difficult for businesses to maintain stable pricing. The cost of goods and services has risen across the board, from foodstuffs to fuel, with petrol prices skyrocketing from ₦175 to ₦1,030 per litre in just a few years. These economic realities have forced companies in various sectors, including Nigerian Breweries Plc and Netflix, to adjust their prices multiple times in 2024 alone.

Amidst this inflationary storm, the telecommunications sector has emerged as a rare source of relief for consumers. According to a report by SBM Intelligence, telecom operators have managed to keep their prices relatively stable despite the economic headwinds. This stability is largely due to the sector’s ability to absorb some of the rising costs through efficiency improvements and economies of scale. However, even this resilience has its limits, as operators face mounting pressures from rising energy costs, currency devaluation, and regulatory challenges. The report highlights that while telecoms have provided some respite, the broader economic environment remains dire, with businesses across other sectors, including entertainment, struggling to stay afloat.

The entertainment industry, particularly the pay-TV sector, has not been immune to these pressures. A leading player in the industry recently announced a tariff adjustment across its DStv and GOtv packages, sparking mixed reactions from subscribers and stakeholders. While price increases are rarely welcomed, this adjustment is framed as necessary to ensure the sustainability of its operations and its continued investment in Nigeria’s creative and entertainment ecosystem. However, critics argue that the company has been slow to innovate and improve its content offerings, which has led to dissatisfaction among subscribers who feel they are paying more for the same service.

The contrast between the telecoms sector and industries like pay TV underscores the unique challenges faced by businesses that rely heavily on foreign currency for content acquisition and operational expenses. For the pay-TV giant MultiChoice Nigeria, the volatility of the Naira has significantly increased the cost of acquiring international and local content and maintaining broadcast operations. This has necessitated the recent tariff adjustment, which, while unpopular, is critical for the company’s survival. As someone who runs a business, I can empathise with the pressures it is facing. Its situation is further compounded by the fact that other major players in the entertainment industry, such as Netflix and Prime Video, have scaled back their investments in local content, leaving it as one of the few remaining pillars supporting Nigeria’s creative ecosystem. Balancing rising costs with the need to deliver value to customers is a challenge I understand all too well, and it highlights the difficult decisions businesses must make in such a volatile economic environment.

However, critics argue that the company has not done enough to justify its price increases through innovation or improved content. Analysts, such as those cited in a recent Nairametrics report, question whether DStv can survive beyond the next five years if it fails to adapt to changing consumer demands and technological advancements. They claim that its reliance on traditional pay-TV models and its slow adoption of streaming and on-demand services has left it vulnerable to competition and subscriber dissatisfaction. While the price increase is necessary to cover rising costs, it must also be seen as an opportunity to reinvest in its product offerings, enhance content quality, and explore new technologies to remain competitive.

Between April and September 2024, the company lost 243,000 subscribers, a staggering number that reflects the broader economic strain on household budgets. Inflation and currency devaluation have left many Nigerians with less disposable income, forcing them to cut back on non-essential expenses, including entertainment. These subscriber losses, combined with a $190.5 million forex loss from its Nigerian operations in 2024, have put MultiChoice in an incredibly difficult position. A significant factor contributing to this financial pressure is the cost of sports content, which remains a cornerstone of cable TV offerings.

The English Premier League (EPL) is particularly popular in Nigeria, drawing millions of viewers and serving as a key driver of subscriptions. However, the broadcast rights for the EPL and other major sports events are priced in US dollars, and the value of these rights has continued to rise globally. At the same time, the Naira has significantly depreciated against the dollar, meaning the company is generating less revenue in real terms from its Nigerian customers while paying more in dollars for the same content. This double-edged sword has further strained its finances, making the recent price adjustment a necessary, albeit unpopular, measure to stabilise its operations. While the price increase may help offset some of these losses, it also risks alienating more subscribers.

It is important to talk briefly about knock-on effects. The pay-TV giant has been a cornerstone of Nigeria’s creative ecosystem, amplifying local voices, empowering talent, and showcasing Nigerian stories globally. Through initiatives like the MultiChoice Talent Factory, the Africa Magic Viewers’ Choice Awards (AMVCAs), and investments in local content production, the company has shaped careers and driven industry growth. These efforts have provided employment opportunities for actors, producers, and technicians and created a ripple effect across ancillary industries such as advertising, marketing, and event management. However, critics argue that these efforts, while commendable, are not enough to offset the perceived lack of innovation and value for money. The company must do more to address these concerns, particularly as competition from streaming platforms and other entertainment options continues to grow. Should the company falter under the weight of economic pressures, the impact on Nigeria’s unemployment rate could be significant. The creative industry, which has become a vital source of jobs for thousands of young Nigerians, would face a severe setback, exacerbating the country’s already high unemployment rate and leaving many skilled professionals without livelihoods. This underscores the broader societal implications of the company’s struggles, making its survival a business concern and a national one.

In the end, while adjusting its subscription prices is a pragmatic response to an increasingly challenging economic environment, it must also be seen as an opportunity for MultiChoice to innovate and improve its product offerings. If implemented, the price increase will put the business in a better position to reinvest in content and technology, but it must act swiftly to address subscriber concerns and remain competitive in a rapidly evolving market. By doing so, the company can ensure its long-term sustainability and continue to play a vital role in Nigeria’s creative and entertainment landscape. As I have argued before, its survival is not just about its bottom line but also about preserving a platform that has become integral to Nigeria’s cultural and economic fabric. However, as others have pointed out, businesses must also adapt to the realities of a changing world—or risk becoming relics of the past.

Nwanze is a partner at SBM Intelligence