We’re optimistic about Nigeria’s economic recovery –Ugbe, MultiChoice boss
By Chinenye Anuforo
Even as the current economic downturn in Nigeria lingers with more companies feeling its effects, the Chief Executive Officer of MultiChoice Nigeria, Mr. John Ugbe, is very optimistic about the country’s economic recovery.
In this interview with journalists in Lagos, Ugbe acknowledged the price of forex last year hit the company’s business because of its exposure to foreign content providers who are paid in dollars. “But we have tried as much as possible to absorb it to provide excellent services. It has not stopped us from adding content and investing because we believe in the long run the economy would be fixed,” he said.
As with every business, definitely there are challenges and as an African country, it means we have different people in different locations and we have some Nigerians that don’t work for MultiChoice Nigeria but other MultiChoice subsidiaries around the continent. Nigeria is a very dynamic country, so I guess being a Nigerian is very helpful but I think the principles of business are the same everywhere. So you have to adapt to the environment and provide the very best service.
I think it has been an exciting time learning the in-trades, changes from the economy, to adapt to the economy and being able to stay alive and continue to provide the service. It is no secret that in the business of media entertainment content, every company says it is king and with content, we have also found out that the cost of content continues to rise and the fact that a lot of content we have on our platform is international, it means that we get to pay a lot. It is no secret that the movement of the naira against the dollar in the last few years has more than doubled and unofficially, even more, and this means that cost of business in some cases has doubled over one-two years period and for any company to automatically have its cost doubled over one year period could do a lot of damage.
A lot of us also identified the realities on ground. The fact that the exchange rate has doubled doesn’t mean people are earning double more than what they were earning as you will see us refusing to do price increases when we first had the currencies corrected for a year. Just understanding that there are big challenges locally and understanding how the market works properly. We have tried to continue to provide the best services despite the inflation rate hitting 17 per cent in the past few years and also tried to keep in touch with what is happening in the market.
If you look in the past, we don’t add channels and increase prices, for that has never been the model of the business. It is an aggregate service so at any point we want to give very compelling content, we want people to enjoy watching TV not just some different channels. We believe in our movies, sports locally and we believe that is a model for the business going into the future. We pioneered putting the African Magic channels and it is very popular not just in Nigeria but in Africa as people know that brand around the world. We also believe in our stories. MNET always pioneered telling the African story. We need to be able to tell our own story and we believe there is a lot of creativity and big opportunities. We all saw what investment and belief in local content did to the growth of entertainment and the GDP as a percentage to Nigeria from not just being recognisable and up to 13 per cent. However, it takes nurturing, collective investment, lots of capacity building, training, equipment and studios as we have been to lots of studios locally. The law of economics holds that firstly there has to be a market in place – willing buyers and willing sellers. Few years ago, when we introduced African Magic, there were question marks centered on how we buy movies but gradually it became a 24-hour channel, so what has happened? You have a lot of people investing, making the market to be developed.
Digital is a very popular word for us. We have pioneered digital television very early and we have been at it for more than 20 years. It would interest you to know that Africa was the second continent and we were the second operator in the world to launch digital television. For us, we have believed in contributing our quota in digital on satellite and introduced digital on terrestrial with the GOtv offering on DTT and we have continued to pioneer. In fact, even before that, we had the mobile offering which is also digital TV with the mobile handheld until that technology was phased out and moved to DDT. So we have been pioneers of digitalTV; there is digital TV in Nigeria so the government will make statements on progression on how much coverage that exists.
Advantage over competitors
It is not in our place to say what we are doing and what others are lacking. We believe in the local market thus we are not shy to invest in the market. Before the Nigerian content, it took a lot, from one channel to seven channels; for everyone of those channels, we put in money. Like I said, our business is not short-term, it is long-term and involves a lot of capacity building so a lot of these things are not done on short-term. You have to look at the long-term plan and understand your local environment. When we started, we had one bouquet. We have consistently introduced new bouquets, which showed that we are not catering for specific class but for any type of household with different offerings. We consistently moved what people see as premium content. A while back, we moved some popular football to even lower bouquet and we made our services much more affordable and it is down to a lot of planning from outside, trying to do things that will excite the market.
Poor signals during adverse weather conditions
As with every satellite communication, be it sea band (sea band is when we had the very big dishes) or Ku-band (small dish which has much more precise and direct signal), the signal can be interrupted. Few factors that include where you are on the continent, if you are on the equator, you are very close to us more like 90 degrees.
Obviously, there is a misunderstanding that it only happens here, it happens everywhere in the world even in Europe during rain and snow. Ku-band will always get some form of interruption. I have been in New York in a hotel and the signal goes, definitely you get those signal interruptions everywhere. However, there is something we are pushing and trying to communicate for a while. You know how you take your car for a service once in a while, people often forget that our own service needs to be serviced.
If you are in Lagos, for instance, where the winds are very strong, there is a tendency for the dish to go off. However, it will continue to work; just go to your decoder to check the signal strength. Sometimes we talk to people 40-50 per cent signal strength so that you will continue to watch but when the weather changes, you then get interrupted. What interrupts the signal is thick cloud. A lot of times you get the interruption when it is about to rain.
There is Ka-band as well as Ku-band; we will therefore improve as time goes on to launch stronger satellites. Then as regards manpower, we continue to train people. We want to increase capacity so that they can do a better job and we are communicating with clients trying to tell them that signal quality is quite high.
Business is not built on one property. For us, it is a popular product and we will continue to try to bring the best content for as long as we can afford to do so. There are lots of positives to learn from people doing things in a right way and over time we have had a partnership with professional football league. We brought the Nigerian league back to TV and everyone has agreed that the league has improved over the last few years. It is important that we don’t also look at only footballers. At times there is too much concentration on football in Nigeria. We partnered and have sponsored the Basketball federation and the league by putting the league on TV. We have recently identified boxing as one sport that was completely dead and have moved our focus to that and we now have boxers known again in Nigeria; the current world champion is a Nigerian. Another boxing night will take place very soon, in the next two months and probably even bigger as you go back to the drawing board to plan something much more bigger.
Partnership with Nollywood
We engage with a lot of Nigerian producers in the Nollywood industry and there is a lot of capacity building in form of training. We have the biggest movie award in Africa, the AMVCA, because with everything, if you provide reward with excellence, people tend to work harder so you have to create a market and there is an opportunity to acquire and opportunity for excellence. In that way, you will have people trying to work harder to produce better movies and series to earn recognition.
Talking about giving back, we have our corporate social responsibility (CSR) initiatives. We have a good partnership with the sickle cell foundation. In the last two months, we had an outreach in Lagos where we went out with the foundation and did a lot of tests. We are quite passionate about giving back to the society. Nigeria happens to be one of the countries that you don’t hear about sickle cell cases. We have school initiatives, which we call the MultiChoice Resource Centres in the sense that we train teachers to use videos to teach, we also provide decoders and other learning tools. Last year, we gave the opportunity to Deloitte to check the level of our impact in the Nigerian economy and they came up with an independent report.
In the next two years, we will continue to invest and it is important to let you know that most times people look at it as investment, take profit kind of thing. But for us it is not that way as we hope that in the long run things will get better. For instance, in the case of boxing, we know it will get better and that brand will attract viewership and investment. We are not fixed on one thing, especially with the number of channels we have. We plan to show the WWE just like we have been showing international boxing and when we acquire rights for international content it gives us more room to think on what next we should do. We are excited and can’t wait to show live and raw wrestling matches as they happen in the US. We are also watching to see proper boxing take off.
We have been showing the champions league, europa league, la liga, in addition to other sporting events. As we move up, we will continue to grow more content to bring the very best entertainment to the Nigerian audience.