The Nigerian media and broadcasting industry in the past couple of years has experienced rapid growth and quick expansion, especially with digital and online platforms. It has perhaps become expedient for the National Broadcasting Commission to review the Nigeria Broadcasting Code to ensure the continued production of Nigerian content and properly regulate the media and broadcasting industry, hence the amendment to the 6th edition of the Code.
The National Broadcasting Commission, the agency in Nigeria responsible for receiving and approving applications for the establishment, ownership or operation of radio and television stations including cable television service, direct satellite broadcast and any other medium of broadcasting announced on March 27, 2020 that it had made amendments to the Nigeria Broadcasting Code.
These amendments according to Acting Director General of the Commission, Armstrong Idachaba seek the “protection and promotion of the local broadcast industry from monopolistic and anti-competitive behaviour; the stimulation of advertising revenue into the Broadcast industry and by extension the local creative industry.”
According to Section 6.2.8 of the amended Code, a broadcaster is expressly forbidden from obtaining exclusive sporting rights in Nigeria, it provides that “in the broad national interest, exclusivity of sporting rights in Nigeria is prohibited. No broadcaster or licensee shall license or acquire foreign sporting rights in such a manner as to exclude persons, broadcasters or licensees in Nigeria from sub-licensing the same.”
Where a broadcaster has successfully obtained rights to sporting events in Nigeria, they are under an obligation to submit the rights to the Commission within two weeks, failure to do so will render the rights null and void and the event shall not be broadcast.
The amendment goes further to state that a broadcaster that has successfully obtained these sporting rights shall offer the rights to broadcasters on different platforms at commercially agreeable terms. And if the parties cannot come to a “commercially agreeable term”, the Commission shall arbitrate. The wordings of this provision seem to armstrong broadcasters that have acquired rights to sporting events into sub-licensing these rights to competitors.
The Commission then provides a blanket clause where it provides that if the parties are unable to come to an agreement, it will wade in and determine by itself what is an acceptable price. This creates a hostile environment for broadcasters who have invested considerable resources in acquiring rights to sporting events to recoup the profit from their investments, broadcasters stand the risk of running at a loss.
The NBC Code, prior to its amendment, did not make very broad provisions for matters bordering on online or digital broadcasting, however, Section 2.0.3 of the amended Code states that “all persons who wish to operate web/online broadcasting services in the Nigerian territory shall be registered by the Commission.”
Section 9 of the Code goes further to state that “no broadcaster shall enter into any form of broadcasting rights acquisition in such a manner as to exclude persons, broadcasters or licensees in Nigeria from sub-licensing same.”
What this means for broadcasting, streaming and Pay TV platforms like EbonyLife TV, Netflix, Channels, AIT, Silverbird, iROKOtv and others, is that the Code expressly forbids and makes illegal the acquisition of exclusive rights to their content.
Simon Kolawole of The Cable raises some valid questions about the amendment in an article he titled Killing The Broadcast industry Slowly, “Free market economies thrive on respect for intellectual property, product differentiation, innovation and the right to charge a fair price. Why should I go the extra mile to invest in acquiring rights to top-class contents when I can just fold my arms and wait for you to do all the hard work and then you will be forced by the NBC to share with me? Why should I pay you a fair price when I know the NBC will determine that by its own fiat?”
Irrespective of the human and material resources that may have been expended by a broadcaster in acquiring content, they are required by the Code to sublicense to other broadcasters. The amendment doesn’t stop there, it provides that the cost of sub licensing will be at a price stipulated by the Commission itself. Not only is this an infringement of their intellectual property rights, it does nothing but kill innovation and creativity.
In a bid to protect the interest of local broadcasters, the Commission will kill competition and oversaturate the airways with similar content thereby capping the value to be placed on the content. This will be counterproductive and defeat the initial intentions of the Commission.
Stakeholders in the media and broadcasting industry have spoken out against the likely negative effects of this amendment.
Jason Njoku, CEO of video-on-demand movie platform iROKOtv, in a passionate tweet expressed his concerns about the amendments.
“Nigeria Broadcasting Commission (NBC) In making exclusivity illegal, compelling sub-licensing of content & regulating price, are effectively turning private enterprise into state property.. Interference Distorts Markets. If implemented this 100% destroys PayTV in Nigeria,” says Jason.
He goes on to express his concerns at the fact that stakeholders in the industry (iROKOtv, Netflix, SceneOne, Silverbird, Africa Magic and others) were not consulted before the amendments were put in place. He says, “In the last 5 years, iROKOtv has commissioned, acquired & produced more than $25m in content. Only 20% of our revenues come from Nigeria, mind you. So think about that for a second. Less than 20% of our revenues come from Nigeria but 90% of that $24m was spent in Nigeria.”
Njoku’s particular grouse was at the seeming insensitivity of the Commission to the plight of media and broadcasting platforms in Nigeria. The provisions of the Code already make it an uphill battle to set up a broadcasting platform in Nigeria given the strict policies in place. The licensing fee to set up a national TV station in Nigeria today, is N500 million. And that is merely the beginning of the process.
In spite of these difficult conditions, organizations and companies have successfully created an industry that is now attractive to investors.
Netflix in March 2020 with its Netflix Naija Twitter account, announced its collaboration with Nigerian media and entertainment stakeholders to produce original Nigerian stories and content. The effect of the amended Code on Netflix is that it will be forced to sublicense its rights to these exclusive content to competitors at a price determined by the Commission. That can’t be an attractive proposition to any investor. The effect of the amendment will ultimately be to nationalize foreign owned broadcasting platforms.
The Nigerian media and entertainment revenue is expected to grow to a value of 10.8 billion US dollars in 2023, rising from 5.55 billion dollars in 2019 according to data released by Statista in 2019. PricewaterHouse (PwC) in a report published in 2019, provides that Nigeria with a 12.1% CAGR will be the world’s fastest-growing E&M market over the coming five years.
The projected growth of the industry may be truncated by the overly strict provisions of the amendment, making investors wary of committing huge investments if their interests are not protected.
According to Chris Ihidero filmmaker and CEO of PinPoint Media, “Holding exclusive rights to content, no matter how lucrative that content looks from the outside, is not the be all of the content production, distribution and broadcast game…holding rights, even exclusive rights, to premium content is only the beginning of the work that needs to be done and all the cards are stacked against us all, especially in a debilitating Nigerian media space.”
In a truly laissez faire society, broadcasters will be able to sub-license their rights to the highest bidder according to the market rules of demand and supply. The involvement of the Commission in price fixing will lead to nothing but arbitrariness and stunting of the emerging growth of the industry.
In spite of the Commission’s lofty aspirations, industry stakeholders worry that all the amendments will successfully accomplish is stifle the growth of the media and broadcasting industry in Nigeria, and send investors running in an opposite direction with its strict prohibition of exclusive broadcasting rights.
Organizers of NECLive, Nigeria’s largest annual gathering of entertainment and creative industry professionals beseeched the Commission to reconsider its decision in a statement released on June 23,2020, “We hereby call on the National Broadcasting Commission and the Federal Government to reconsider, and reverse this decision. The focus at this time should be on creating policies that will empower as well as encourage the entertainment and media industry to exponentially thrive, thereby creating a favourable environment for the kind of economic growth that Nigeria desperately seeks.”
The Board of the Commission in a notice issued on Friday June 26 2020, invited concerned industry stakeholders to submit papers containing their observations and concerns on the amended code latest by July 9.
The Notice reads, “The Board of the National Broadcasting Commission sat to review the various positions and resolved that fresh invitations be extended to all stakeholders in the industry especially those with genuine observations aimed at improving the quality of Broadcasting in Nigeria.”
In an apparent contradictory notice signed by Prof. Armstrong Idachaba, Acting Director-General of the Commission released on Monday June 29, 2020, the Acting DG refuted the earlier publication, claiming that “the amendment to the 6th Edition of the Code, we must reiterate, is consequent to the presidential approval for the reform of the National Broadcasting Commission. The amendment, as released, is therefore final. Any group wishing to make further inputs will exercise such views at the next Review of the Code.”
It is unclear what the contradictory messages from the Board, (headed by Ikra Bilbis, Chairman of the Board) of which the Acting DG, Armstrong Idachaba is a member and the office of the Director General of the National Broadcasting Commission mean for the media and broadcasting industry as a whole.
When the Nigeria Broadcasting Code was initially released in 1993, the intention was to enable broadcast operators to self-regulate and ensure the highest level of professionalism. Today with the amendments, the Commission has removed autonomy and incentive for anyone that deals in the media and broadcasting space.
While the intention of the Commission might be noble to encourage local content production with “increased advertising revenue for local broadcast stations and content producers” no amendments to the Nigeria Broadcasting Code can be said to be whole and effective without the consultation of stakeholders within the industry to ensure and protect the sustained growth of the media and broadcasting industry in Nigeria.
