Since Wednesday, there has been a big discussion on social media after Multichoice Kenya raised the price of its packages by 15%. The premium package which has all football action will cost Sh9,400 up from Sh8,200.
DSTV are the only Pay TV provider in Kenya who have rights to air the insanely popular English Premier League, and have used that advantage to make as much money as possible. That’s why last month they moved all major action from Supersport 3, which was available on Compact Plus for under five thousand, to Supersport 5 only available on the premium package.
A few year ago, GTV came into the country and completely shaked the market. They too had premier league rights and were charging a fraction of what DSTV was charging. Furthermore, they made it possible for existing DSTV customers to continue using their old dish, only requiring them to buy a new decoder.
There was mass migration from DSTV to GTV and thousands of Kenyans became first time Pay TV customers. A few year later, GTV went under and DSTV was left to keep on the monopoly. That’s how we find ourselves here today.
So, how much does it cost to get the Premier League rights?
The Premier League awards rights on a 3 year basis, and the current cycle starting 2016/17 to 2018/19, was awarded last month to SuperSport. The South Africans will be the exclusive broadcasters of English football in Sub-Saharan Africa until 2019; So if you were hoping for another company to bring in the competition, you can stop holding your breath until mid 2019 when the next bidding will be done.
The Premier League do not reveal the figures, but Daily Mail and the BBC managed to get the numbers.
Domestically in England, the rights were split between two rivals SKY and BT Sports. They both paid a total of £5.136bn for a 3 season period. That’s Sh820 billion or roughly Sh273 billion a year.
With less than 150 games to be broadcast live, the average cost per game is £10.2m or roughly Sh1.6 billion for the UK audience only.
For the US rights, NBC sports won the bidding which has been reported to be a measly $1bn over 3 years, or roughly $333 million (Sh35 billion) per year. This is due to the lack of popularity of the sport in the United States. Compare that to the nearly Sh500 billion per year broadcasters pay for NFL rights.
In Africa, DSTV had paid $300 million (Sh31 billion) for the previous block of 3 seasons ending this season. For the next block that will end in 2019, the figures are hard to come by, but there’s speculation there was a 50% improvement.
All in all, the cost of acquiring Premier league rights for Sub Saharan Africa (with the exception of Nigeria), does not exceed KSh 15 billion per year.
It’s interesting to note that the only reason Supersport is awarded the rights for virtually the entire continent is because they don’t have competitors in individual countries. In Nigeria, though they got the rights, they had to outbid a rival company.
DSTV operates in 50 African countries. They don’t provide their subscriber numbers, but we can give Kenya a generous 10% of the figures. Theoretically, that would mean it sets them back Sh1.5 billion per year to broadcast the Premier League in Kenya.
DSTV also has to pay for other content, eg Spanish La Liga, IAAF, Tennis, MotoGP, Golf, Kenyan Premier League, Telemundo, CNN, Fox, National Geographic etc… but these are usually a small fraction of the Premier League cost. Most news and entertainment channels cost next to nothing considering they’re not exclusive to DSTV, but also offered to Zuku and Startimes.
For the Kenyan Premier League, DSTV pays about Sh200 million per year.
If they provided subscriber numbers, it would be easy to estimate whether the South Africans are ripping us off with their ever increasing prices, or they are genuinely operating with thin profits.
But perhaps it’s easier if they changed their business model to target the masses by increasing subscriber numbers significantly through reducing cost. All in all, a competitor with a favourable pricing structure will emerge down the line and I’m pretty sure Multichoice will not be the only one bidding for EPL rights in London. I don’t know when, but it sure as hell will happen.