Does cross-border broadcast of foreign football change the demand pattern of domestic recreation?

Author:Abiodun S. Bankole
Position:Department of Economics, University of Ibadan, Ibadan, Nigeria

Purpose – The purpose of this paper is to estimate Nigeria's audiovisual services import demand using foreign football transmitted through digital satellite television (DSTV) as a case study. The major focus is on whether such imports effectively replace local recreation in watching domestic football. Design/methodology/approach – The authors examined descriptive statistics. The... (see full summary)

1 Introduction

Trade in electronically delivered products, in which more and more developing countries are beginning to participate and which offers an increasingly viable alternative to the movement of individuals, is today largely free of explicit barriers ( Matoo and Stern, 2008 ). As a result, audiovisual services have been playing a crucial and formative role in the society. These services are closely linked to the preservation of cultural identity and social value. It also plays a major role in shaping public opinion, safe guarding democratic system and developing creative potential. Audiovisual services are closely related to other services such as tourism, software, recreational, cultural and sporting services. The growing wave of globalization appears to be deepening the rapidly rising import of audiovisual services such as television, movies and the music entertainment through satellite transmission. While this services trade has increased the variety of entertainment or recreational choice available to the global consumers, many Nigerians now also prefer to watch foreign sports via digital satellite television (DSTV). In recent times, the pattern of demand for recreational activities such as football has changed, as more Nigerians have been observed preferring to watch foreign football games via the satellite either at home or at pay-per-view TV viewing centers. Partly as a result of this changing demand patterns, the local football industry both as a source of entertainment to Nigerians and in terms of institutional intervention from government is neglected. It is also observed that foreign clubs namely Chelsea, Manchester United and Arsenal, among others have more fans in Nigeria than the local clubs.

In effect, this increased demand for foreign football entertainment constitutes an import of audio visual services supplied mainly through the DSTV at the expense of the patronage of the local football as a recreational activity. According to Guest (2009) , in Kenya and Uganda, the DSTV had a dominant control in the premier league broadcasting. Guest (2009) reported that in Dandora, Nairobi, Kenya, many DSTV pay-TV centers have established viewing centers in several locations as businesses for viewing the European premier league. In Uganda, English premiership logo is seen everywhere, in rural huts, and mini-buses indicating the wide spread of passion for European football exploded with the increasing availability of television and satellite broadcast. One policy concern of this demand pattern is the degree of openness of this industry to international trade and whether government can raise import taxes on this type of imports as it does on imported goods on which import duties are levied.

Encyclopedia (2010) defined audiovisual as works with both a sound and a visual component. Traditionally, audiovisual services sector covers the production and distribution of audiovisual contents such as motion pictures, radio and television programs and sound recordings ( Mukharjee, 2000 ). According to Pasadilla and Lantin Jr (2005) and United Nations (2002) :

[…] the audiovisual services industry is composed of several subsectors as classified by the WTO service sectoral classification list (MN.GNS/W/120) based on the United Nations provisional central product classifications (CPC). These are motion pictures and videotape production and distribution services categorized as (CPC 9611), Motion pictures and projection services (CPC 9612), Radio and television services (CPC 9613), Radio and television transmission services (CPC 7524), Sound recording (CPC not applicable) and others.

The main concern should be preventing the introduction of new barriers, which the dramatic expansion of exports is showing signs of provoking.

It is noteworthy that Nigeria is engaged in both the import and export of audiovisual services, the latter an offshoot of a booming film industry christened Nollywood that has been found to worth about $5billion annually. Nonetheless, the import of audiovisual services appears to exceed the exports with critical implication for the balance of payments if we considered the fact that Nigeria posts services deficit. In addition, the growth of demand for football entertainment via DSTV in Nigeria relative to the rest of the world and the possibility that this demand can replace sources of domestic recreation and growth, in particular, the domestic premier league, justifies an examination of the subject matter.

The objective of this paper is to identify the pattern of demand for audiovisual service imports as a recreational activity and examine the determinants of same using a case study of the demand for foreign football broadcast via the DSTV. The paper also seeks to examine the replacement tendency of domestic football as a means of local recreation with foreign football broadcast. The paper's focus is television broadcast of foreign football out of the three types of audiovisual services mentioned above. The rest of the paper is organized as follows. A brief background of audiovisual and football industries are provided in Section 2 while Section 3 reviews the conceptual and methodological as well as empirical literature. Section 4 models the demand for foreign football broadcast service and presented the adopted methodology. The focus of Section 5 is on the descriptive analysis and the econometrics results of the derived empirical equation. Section 6 concludes.

2 Background: evolution of Nigeria's audiovisual and football industry

Football match-viewing is one of the traditional recreational activities of Nigerians, whose tastes for football entertainment cut across culture, social class, age and religion in terms of participation or consumption. It has also been observed that football entertainment consumption has become a great unifying factor in Nigeria because fans of the same clubs speak the same language irrespective of their religion, tribe, social class and ethnic differences. Historically, Nigerian domestic soccer players were highly revered and admired by the Nigerian soccer fans that have been described as vociferous and die-hard supporters of their clubs and Nigeria national team ( Oluko, 2004 ). The introduction of satellite television, one of the tools of globalization, made it easy for the rank and file of the society to have access to viewing world class events, football matches inclusive. Since the, 1990s, Nigerians have been exposed to increasing international football premiership matches making it possible for Nigerian soccer fans to compare the quality of play, or performance of foreign clubs and equipment with those of the domestic clubs. In Lagos and other cities, youths organize their own championship tournaments using the names of the teams in Europe ( Abati, 2007 ), particularly those of such clubs as Manchester united, Barcelona, Chelsea, Arsenal, Real Madrid, AC Milan and others. Results of matches also now permeate Nigerian cultures to the extent that Nigerian fans have organized fan clubs with chairmen and secretaries which arrange lavish parties to celebrate the victory of foreign clubs. These indicate that the interest of Nigerian football fans have shifted from the domestic national clubs to the foreign clubs perhaps due to “love for quality” and standard of play ( Abati, 2007 ).

The European premier league broadcast attracts millions of viewers around the world. In Africa, Multichoice which operates as DSTV was given an exclusive sport right to broadcast the English premier league soccer through a close tender process or through auctioning on a three year basis in 2004 ( Samuel and Guchu, 2009 ). This broadcast right makes the company the dominant pay TV company in sub Sahara Africa with about 700,000 subscribers in the region ( Christ, 2009 ). However, the exclusive right for the English premiership broadcast no longer rest with Multichoice in all the African countries. In Nigeria, HiTV an indigenous company acquired the English premiership right between 2007 and 2010. In Kenya, the gateway television (GTV) acquired 80 percent broadcast right of the premiership league while Multichoice was given 20 percent right. In Zimbabwe, Multichoice remains the dominant pay TV industry. Screen Digest estimates MultiChoice's subs at 205,000 in Nigeria. This is from a population of 149.5 million and just over six million TV percent households ( C21Media, 2009 ). Christ (2009) reported that Nigeria's pay TV subscription level will increase at a annual average of 13 percent while total regional pay TV revenue will almost double 2008 levels by the year 2013.

The increased broadcast of English premiership through DSTV has coincided with the relative demise of the domestic premiership all over Africa, this due to rise in the popularization of European soccer by DSTV and other pay TV networks to the detriment of Africa's domestic soccer. However, this phenomenon appears to be a double-edged sword. On the one hand, it appears very profitable to cross-border satellite TV transmission companies as well as small-scale enterprises which operate viewing centers. For example, television viewing centers with DSTV subscription are located in many parts of Nigeria cities and villages. In Karu, a satellite town of Abuja, Nigeria's capital city, the popularity of football viewing centers are attested to by the numerous advertising bill boards which...

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