Kenya’s inflation hit a 61-month high in July on soaring food and fuel prices as well as the cost of home equipment and appliances, highly eroding the purchasing power of households but pay-TV firm MultiChoice just increased the cost of its bouquets in the market.
With such high inflation — which breaches the government’s upper limit target for the first time since August 2017 — many would question the decision by MultiChoice to raise charges on luxury services amid such economic duress.
MultiChoice Kenya last week increased its DStv and GOtv charges by up to 8.61 percent due to what it termed in response to rising operational costs.
“DStv has over the past year absorbed increased content costs and foreign exchange impacts, due to the weakening Kenya shilling,” said MultiChoice Kenya managing director Nancy Matimu in a statement.
The higher charges for its various bouquets, which will become effective from September 1, will see adjustments of between five percent and 8.61 percent for both DStv and GOtv customers. Some GOtv bouquets will remain unaffected.
The move, however, coincides with renewed market confidence for the pay-TV firm, which barely two months ago won a major fight against telcos that it accused of abetting piracy of its content through illegal sports sites hosted on their platforms.
High Court judge Wilfrida Okwany in June directed the Internet service providers to permanently block the sites —handing a major relief to MultiChoice that had been weighed down by piracy and stiff competition by online streaming services such as Netflix and YouTube.
The shutdown of piracy sites meant that customers have no option but to buy bouquets from MultiChoice — a development that explains the bold move by the company to raise prices in the middle of a tough economy.
However, the price increase has drawn criticism.
“The move by MultiChoice is a strange one because I haven’t seen fundamental change in cost drivers. May be they are banking on blocking piracy sites but that again may not hold because there are still many streaming sites that are cheaper” said George Bodo, a financial analyst.
The 2022/23 season of the popular English Premier League just kicked off at the weekend and thousands of Kenyans will be flocking before TV screens to catch glimpse of their favourite teams. Previously, most Kenyans logged into piracy sites to watch their favourite teams and MultiChoice avoided price raises because that would have meant losing subscriptions by financially strained households.
The court-backed purge on piracy means MultiChoice has room to wriggle and improve its revenue through inflation adjustments to its product prices.
In the changes, customers on the DStv Premium tariff plan will pay Sh8,900 per month from the previous Sh8,400 in the new rates. Subscribers to the Compact Plus tariff plan will pay Sh5,500 from Sh5,100.
“Africa’s most-loved storyteller has considered the rate of consumer inflation and current economic pressures facing Kenyans when considering its annual price adjustments,” said Ms Matimu.
Viewers on the Compact tariff plan will pay Sh3,000 from Sh2,800 while those on the DStv access package will pay Sh1,150 from Sh1,050. GOtv Supa customers will have to pay an extra Sh100 to access their channels. Currently, they pay Sh1,499 monthly. Those on the GOtv Max bouquet will pay Sh1,249 from Sh1,150.
The fight against piracy sites has dragged on the court for years amid growing frustration by the pay-TV firm.
The company first issued the takedown notices for the 141 sites in October 2019 to the two telcos but they were ignored over claims that the notification did not describe in detail, the copyrighted work that was infringed and that they were unable to locate the specific infringing sites within the domains. The failure to comply forced the pay-TV firm to move to court.
The court heard that Jamii Telecom and Safaricom have been allowing the sites to re-broadcast and replicate exclusive content without its authorisation.
The firm argued that the continuous streaming was occasioning huge losses to MultiChoice as its protected content is accessed freely by pirating sites or domains.
And after hearing the case, Justice Okwany directed the Internet service providers to permanently block the sites upon being served with the court order.
The judge said the takedown notices were lawfully issued to the two ISPs, and they ought to have complied as they did not give a lawful excuse for the failure to obey.
“An order of permanent injunction is hereby issued to the first and second respondents to impede the use of its service to access a service, website place, domains or facilities situate in or outside Kenya that is used to infringe the applicant’s copyright as contained in the takedown notice,” the judge ruled.
Ms Matimu immediately hailed the decision saying the Kenyan law has sent a clear message that the right of content creators to earn a living from their work, must be respected.
Safaricom complied with the order but Jamii Telecom Ltd (JTL) did not, forcing MultiChoice to head back to court and seek orders, citing Jamii chief executive Joshua Chepkwony for contempt of court.
In the latest application, MultiChoice said it has been monitoring the compliance of the ISP to confirm whether they had blocked the pirating sites as directed.
“I can confirm that they have not done so as pirate sites are accessible on their network occasioning huge losses to the applicant,” said Fredrick Saramba, the anti-piracy and security manager at MultiChoice.
JTL’s defence is that MultiChoice has failed to supply it with the “server path to the specific location of the offending content”.