Over the past few years, the entertainment industry has been plagued by several broadcasting issues such as exclusive content licensing agreements of sport events, and an outcry against local content eradication. On the 26th day of March, 2020, the Nigerian Broadcasting Commission (NBC) presented the latest amendments to the Broadcasting Code (the Code). The amendment made copious provisions aimed at resolving the recurrent problems. However, following the presentation, the amendments have been met with extreme reaction of varying positions. Stakeholders in different cadres of the sector have either applauded or condemned the amendments.
Analysis of the Relevant Provisions of the Amendment
The amendment updates the anti-competitive objectives of the Code. It asserts that the Code is geared toward promoting a fair and competitive market, preventing the misuse of monopoly where such exists and establishing effective codes of practice relating to content acquisition.
The provisions of the Code has been made applicable and enforceable against International broadcasters.
With regards to sporting events, the amendment provides (amongst other things) that:
- Rights owners to live foreign sport events shall offer the rights to broadcasters on different platforms, including satellite and cable for licensing. Disputes resulting from this provision will be determined by the commission through arbitration.
- Exclusivity of sporting rights is prohibited.
- Non-usage of acquired rights is prohibited.
- Prime foreign sports events shall not be transmitted unless the owner of the rights to transmit such in Nigeria has also acquired rights to a prime local sport event of the same category with at least 30% of the cost of acquiring the prime foreign sport event. This condition will not be satisfied by the carrying of a local channel by the broadcaster.
For the purpose of the Code, local content is one which it’s conceptualisation, production and target audience is in and for Nigeria; and satisfies the conditions that:
- the director and the authors must be Nigerian,
- the producer(s) is a Nigerian residing in Nigeria,
- at least 75% of the leading actors and supporting cast or presenters are Nigerians,
- at least 75% of the program and post-production expenses are for services provided Nigerians.
The importance of promoting local content is emphasised by the provision that in the case of a collaboration between a Nigerian broadcaster/company and a foreign entity, Nigerian production location, talents, skills set and others must form at least 75% of the entire production.
But this is hardly the end of it. The amendments mandate that broadcasters shall offer their programmes and/or channels in any genre to other broadcasters for retail on terms presented by the commission. These terms include carrying out the above duty upon reasonable request within a reasonable time on non-exclusive basis without discrimination and in accordance with the the Code and directives issued by the commission.
Raging Concerns with the Provisions of the Amendments
The Commission was not prepared for the backlash that came on the heels of these new provisions. Chief amongst the provisions that has made stakeholders and parties uncomfortable is the requirement that broadcasters shall licence their programs to other broadcasters if it commands wide viewership, and/or the programme is objectively necessary, and/or it will likely lead to the elimination of effective competition and/or will likely lead to consumer deprivation. The Commission independently sets the stipulated price at which the license must be given. Combine this with the incidental decrease in value of the programme from its proliferation in the media and the result may be a monumental loss in revenue and little reason to be a content creator. There will be no incentive to create if you can just as easily purchase available, valuable, relatively cheap content. On the other hand, broadcasters and content creators may aim to maintain quality of the content provided and invest in projects, but it is anticipated that this additional cost will subsequently be pushed down to the consumer.
Mr Godfrey Ohuabunwa, Chairman Association of Licensed STB Manufacturers of Nigeria, who is also the Vice Chairman of the Broadcasting Organisation of Nigeria (BON) maintained that the Code is not against investment and competition, that it merely discourages warehousing of contents and creates more businesses for both platform owner and the broadcasters. But, it has been noted that in a bid to give more broadcasters access to premium content, there will be less motivation to create premium content (since businesses and companies may as well buy ready-made content instead of investing unlimited resources in producing premium content capable of commanding wide audience). Less premium content would mean that there will be less attention and demand for content which translates to less decreased performance of the sector. In this light, the amendments may be contrary to public policy. Untowardly, the amendment has exceeded the boundary set by its antecedent, the Federal Competition and Consumer Protection Act 2019.
The problem, however, is not limited to visual entertainment in the form of movies and series. The requirement for owners of rights to transmit prime foreign sports events to invest 30% of the cost of such rights acquisition in prime local sport event in Nigeria of the same category imposes more financial burden on these broadcasters and defies the logic of demand and supply.
Moreover, there is the issue of incidental contradiction of the Copyright Act by the provisions of the amendment in question. Section 7 of the Copyright Act has given the copyright in a broadcast the exclusive right to control the recording, (re-)broadcast, communication and distribution for commercial purpose of such work. Therefore, the amendment is in contradiction with the Copyright Act by compelling licensees and copyright owners to allow for the transmission of their content against their will.
On the heels of the copyright issues that the amendment may engineer, there is the underlying and potential contradiction of existing government policies by the provisions of the amended Code. Nigeria in a bid to attract foreign investors, has overtime made a commitment to investors that their investments will be safe from nationalisation except for public policy and on the condition of payment of adequate compensation. It is ironical that provisions of the amended Code aim to compel business and companies to adopt policies antagonistic to international best practices.
Lastly, one may wonder how the Commission intends to enforce the groundbreaking provisions of the Code. Provisions such as those forbidding the warehousing of contents and requiring at least 75% participation of Nigerians in the production of a content for it to qualify as local content may require the Commission to go over every broadcaster’s portfolio regularly and vet each content to ascertain its adherence to the local content provision. On the other hand, enforcement of the Code on web broadcasters that operate outside Nigeria in the wake of technological whirlwind of our era is questionable.
The effect of the amendments can be far reaching. Meanwhile, companies and businesses in the sector should proactively consider the potential effect of the provisions of the amendment on current and future ventures. The impact of the amendment on a particular business is dependent on the position of the company in the sector and content creation capacity before the presentation of the amendment. For major PayTv businesses and content creators, it is important to review prior and future agreements in the light of the amendment to ascertain the rights and liabilities of each party. An assessment and updating of the businesses objectives and mode of operation will be necessary moving forward.
Given the provision of the law that if a subsidiary legislation (in this case, the amended Code) is in contradiction with a primary legislation (in this case, the Copyright Act), the primary legislation supersedes and the former is to the extent of the inconsistency, void. By encroaching on the exclusive right of a copyright owner to license his work, it has transcended the limits of its operation and hence ineffectual in that vein.
The amendment however remains magnanimous in its aim of safeguarding and improving Nigeria’s local content and protecting the interests of music artistes and advertisement stakeholders. Hopefully, the Commission will engage with stakeholders to smoothen over the rough edges of the amendment to produce regulations that will be fair and permissible in law.
Michael Chukwu is a tech, intellectual property and corporate law enthusiast and can be contacted via email@example.com