Showing posts with label television. Show all posts
Showing posts with label television. Show all posts

Wednesday, August 22, 2012

How One Channel Could Shake Up Pakistan's Media Scene

We don't usually write about entertainment channels of the sitcom / soaps / serials variety (as opposed to entertainment channels of the news / current affairs variety) but there's a new channel airing across Pakistan for about the last two months causing all sorts of waves that is interesting to us for a number of reasons.

 Urdu1's advertising blitz can be seen in magazines and on billboards

For one, Urdu1, as the channel is named, seems to have hooked a substantial number of viewers, which seems to be giving its big-name rivals in the television entertainment business all sorts of palpitations. No doubt a major part of the reason for its sudden popularity is the fact that it is broadcasting some of the most popular Indian soaps, whose ratings on the illegally (but widely) broadcast Indian entertainment channels such as Star Plus and Colors, put to shame ratings of all other Pakistani channels. It is technically able to do this because it is actually not a Pakistani channel (which are subject to far more restrictions regarding Indian content) but a 'foreign channel', based out of Dubai and only having 'landing rights' in Pakistan.

But it is also benefiting from the fact that it still broadcasts most of its programming without the massive commercial breaks that have become the characteristic of Pakistani entertainment channels and which have become the bane of viewers. Unlike Pakistani entertainment channels which offer up their programming in blocks of, often, seven minutes or less, and where an hour of programming can include 22 minutes or more of commercials (also violative of the terms of their licenses, which stipulate no more than three minutes of advertising after every 15 minutes of programming - this stipulation has been challenged by the Pakistan Broadcasters Association in the Sindh High Court where the case is pending), Urdu1 so far has been getting by with running ads mostly at the beginning and end of their content. Viewers, fed up with the extended and excessive commercial breaks on Pakistani channels, seem to have given their approval.

By far the most fascinating part of the programming on this new channel from a sociological point of view, however, is the inclusion of - and unexpected popularity of - some of its dubbed offerings. Urdu1 is also offering Latin American and Turkish soaps which, despite the fact that they contain non-desi actors whose voices have obviously been dubbed into Urdu, seem to have found wide acceptance among the usual female population that comprises the bulk of the viewers of such programming. So far, Pakistani channels have rarely ventured into the dubbing territory (although Geo Entertainment has shown a couple of dubbed films in the past) because it was generally believed that audiences did not like watching such dubs and could not identify with non-desi actors and that the viewership could not justify the costs of dubbing. It would be interesting to see when rival channels also begin to add similar programming. And we can bet it won't be long.


 'Forbidden Love': Turkish soap seems to be doing well with viewers


But Urdu1 is also making waves for other reasons. A conglomerate of its rivals, including Hum TV, Geo Entertainment, ARY Digital and Express Entertainment have filed a case in the Lahore High Court against the granting of 'landing rights' to the new channel (which basically allow it to be distributed legally within Pakistan), which was launched in Pakistan only in the second week of June. They have challenged the Pakistan Electronic Media Regulatory Authority (PEMRA) to justify the grant of the license, which they claim is against PEMRA's own criteria for such licenses.

For one, these rivals argue that any foreign satellite channel must have been operative for at least three years before it can be considered for a 'landing rights' license , and that Urdu1 did not fulfill this criteria, having been launched (even by its own admission) "in the Middle East" only in June 2010. They also claim that foreign channels are, allegedly, not allowed to have more than 10-15% of their programming in Pakistani languages under PEMRA rules and thus Urdu1 falls afoul of this criteria as well. Urdu1's rivals may be technically right (we tried but could not locate these stipulations on the PEMRA site) but it should be fairly obvious from this petition that the big Pakistani entertainment channels are very apprehensive of what Urdu1's popularity could mean for their revenues. And let's be clear about one thing: their loud cries about 'foreign cultural content' and 'subversion of Pakistani culture' are only smokescreens for the real issue of revenue and profits.

There are a few points to consider here. A) I am no fan of the mind-numbing histrionics of Indian soaps, but is the "trade protection" being sought by Pakistani channels against Indian television content legitimate, especially when one considers that all of these same channels vie to run - and go out of their way to promote - Indian content such as awards shows and films when they can? B) Is Indian content the only issue? It was considered the main issue because of the supposed easy identification of Pakistani viewers with Indian storylines and actors, and the reason that nobody bothered that much about Western content, assuming it catered only to a small niche of viewers. How will that point-of-view fare with the popularity of dubbed non-Indian content as shown by Urdu1? To take the point further, is isolationism something to aspire towards? C) One can make legitimate arguments about the need for smaller trade / production entities to have benefits that level the playing field somewhat against larger entities that have the advantage of scale. But does that argument really hold for 'cultural products' in an increasingly globalized world where technology makes the cultural products of other nations easily accessible? After all, the 'protection' offered to the Pakistani film industry for over 40 years did not really help it to survive or become better did it? D) There is a fundamental issue at stake also about who benefits from such protection: does it actually benefit people it claims to serve or just a few corporates such as television channels, some big local production companies and their owners and investors? After all, all viewership surveys in Pakistan attest to the continuing popularity of Indian soaps despite their official prohibition and despite the rantings of the moral brigade. If viewers insist on watching shoddy melodramas and continue to find ways to do it, is it the job of government to deny them legitimate avenues to do so?

Finally, there is another significant aspect to Urdu1 which has piqued our interest. Its Pakistan license holder is a company called Horizon Media (Pvt) Ltd. which is fairly untraceable on the web. For a channel that supposedly launched "in the Middle East" (out of Dubai) in 2010, Urdu1 also has no website that we can locate. Its CEO is a man called Faraz Ansari, who used to be the former General Manager of Ten Sports and apparently worked for other media companies earlier as well.

However, we have learnt from very reliable sources that the real people behind the channel are three "heavyweight" legislators of the ruling Pakistan Peoples Party. In fact, we have been able to identify one of them: Ms Shazia Marri, now elected as a member of the National Assembly and former/ current minister for Information and Electric Power in Sindh province. Another may be current Sindh minorities minister Dr Mohan Lal, whose brother Mr Jai Prakash, a Shikarpur-based trader, is alleged to be the main financier of the venture.

 Shazia Marri: new media mogul?

What makes the whole venture more curious is that, according to our sources, Ms Marri has also been in long-running talks to buy an FM channel called Josh 99FM which operates out of Karachi, Lahore and Hyderabad and is "affiliated" with three other unnamed FM stations, claiming a total "potential" listenership of over 60 million people. Josh FM99's Chief Executive is Mr Sarmad Palijo, the younger brother of the sitting Sindh Culture and Tourism Minister Ms Sassui Palijo. Adding to the intrigue is the fact that those in the know claim the purchase negotiations have dragged on because of the involvement of Ms Faryal Talpur, another sitting PPP MNA and the sister of President Asif Zardari. Our sources claim they do not know what Ms Talpur's stakes are in the matter but that on more than one occasion, she intervened once the price had been tentatively agreed, to ask the parties to reconsider the price. According to our sources, one intervention was to urge a lowering of the price, another was to raise it, which may indicate that Ms Talpur had been requested to intervene by both sides at various times.

Is there a new media empire in the offing?



Thursday, December 16, 2010

So You Want To Be A Pakistani Talk Show Host?

So, taking the cue from that previous video I posted and the pointing out by a reader that, in fact, one could make one's own videos on that site, here is my tentative first offering... Basically just fooling around and testing the software, so to speak. It took me a grand total of less than an hour to get this out. Next time, will work more on the script.


Sunday, September 19, 2010

The Economics of Pakistan's Electronic Media

Here at Cafe Pyala we have often debated the concept of the "electronic media bubble" and put forward our own opinion that the economics of the media boom in Pakistan over the last decade just did not seem to make sense. Wanted to share the following article with readers from the recent reincarnation of Viewpoint (the leftist magazine edited by Mazhar Ali Khan that died along with the collapse of the Soviet Union) as an e-zine. It is written by Riaz ul Hassan, a former lecturer at Government College, Lahore, who is currently studying in Sweden and plans to do a PhD, we are told, in Social Media studies.


(Graphic: Viewpoint)

I am not 100 per cent sure of the facts and figures contained here (in particular, I am not convinced about some of the assumptions of operating costs) but it certainly represents the first serious attempt to look at the economics of an industry that has largely escaped financial scrutiny. And it certainly argues its case well. I am reproducing the article here in full in the hope that some of our readers, particularly from the business end of the media, might themselves provide insight or even corrections to the financial assumptions made in the article.

Look forward to the input.



Pakistan media’s mysterious financing
By  Riaz ul Hassan
Pakistani media’s financial shortfall is compensated either by mysterious sources or the electronic-media bubble is heading for a big burst
It takes Rs. 40 million per month, for a privately-run, news channel in Pakistan. Apparently, advertising is the only source generating income for privately owned TV channels. The windfall from advertising industry, in case of top 32 channels, is at best Rs. 592 million.   At average, every channel earns Rs. 1.7 million per month from advertising.  Either the shortfall is compensated by mysterious sources or the electronic-media bubble is heading for a big burst.
In fact, Pakistan cannot be considered a sound Media market because there is not enough growth in advertising to sustain it. The ratio of advertising expenditure to GDP is about 0.19% - the total advertising expenditures in fiscal year 2008-2009 were Rs. 26.96 billion according to a Gallup survey and the total GDP was around Rs. 14,156 billion according to Economic Survey report for the same fiscal year. In the neighboring India, the same ratio for year 2008-2009 was 0.47%. 70 percent of goods and services purchasing power in Pakistan is constituted in small and medium cities which are nearly 80 percent of total television audience. The remaining 30 percent purchasing power is exerted by the 20 percent of television audience in metropolitan and big cities [1].  Last few years were quite promising and positive for the media industry especially for electronic media though annual advertisement growth is far less (8% in 2008-2009) as compared to annual growth of total media industry which is 120 percent approximately. Global economic recession and the alarming law and order situation in Pakistan have resulted in lowest increase in advertising expenditures in the last five years [2].
In the year 2008-2009, the television industry got the lion’s share of 55 percent of the total advertising expenditure, while print media followed with 26 percent. According to research organization Aurora’s (owned by DAWN media group) annual report 2009, the total media advertisement revenue was Rs. 24.63 billion. Aurora’s figures differ from Gallup’s who reports that there was only 1 percent increase in total ad-spend in 2008-2009 as compared to last year (from Rs. 24.36 to 24.63 billion). The total ad-spend increased by 31 percent in financial year 2006-2007, and 18 percent in 2007-2008. According to Aurora’s figures, print media still holds 37 percent share in total advertising budget while the TV is on top with 54 percent [3].
As mentioned in the beginning, in fiscal year 2008-2009, TV ad-spend increased by 24% to reach Rs. 14.807 billion as compared to previous FY according to Gallup survey report. Aurora did not provide any details about break up of TV ad spend in response of our request but according to another renowned firm MediaBank, TV advertising revenue remained Rs. 13.374 billion with 14% increase from last FY. Since there is not much difference between these two figures, we will graphically show break-up of TV ad-spend per channel here for Rs. 13.374 billion:
This graph reveals very important factors. 96 percent of TV ad revenue was taken by 32 channels. The remaining channels which are around 50% of total number of channels functional in Pakistan got only 4 percent. Another notable fact is that PTV Home and PTV News are owned directly by federal government and are terrestrial channels along with ATV; previously owned by government and now by a private company. Terrestrial channels claim some 16 percent of revenue. Consequently, more than 80 private channels are contesting for 88% of total TV ad-spend revenue. Moreover, satellite channels’ ad revenue increased by 23% and terrestrial channels’ decreased by 18% as compared to previous fiscal year 2007-2008. On the other hand, Gallup claims that satellite channels accounted for 74 percent from total revenue with an annual increase of 36% while terrestrial channels accounted for 26% with annual increase of only 0.1%.
All in all, total television ad-spend remained around RS. 14.807 billion in fiscal year 2008-2009 [4]. In the same fiscal year PEMRA awarded 46 new FM radio licenses, 16 TV channel licenses, 232 cable distributorships and two landing rights for TV channels [5]. Five TV channels started broadcasting that year, compared with 15 in 2007-2008 [6]. Currently, PEMRA charges around Rs. 2.5 million for issuing a TV license excluding Rs. 20,000 as initial charges [7]. Moreover, it costs 70 million to 1 billion rupees to establish one TV channel in the country as per estimates based on interviews with industry officials.
The total TV ad-spend of Rs. 14.807 bn is distributed among almost 60 private fully functional TV channels and two major state-run channels at the moment [8]. State-run PTV Home and PTV News get 8% and 4% from this total revenue respectively which leaves Rs. 13.03016 billion for 60 private TV channels. Meanwhile, 96% of the ad-spend goes to 32 major channels while the other 28 channels get only 4 percent from this pie (Rs. 592.28 million). Among these 28 channels, seven are news channels and remaining 21 are general entertainment channels.
If we assume that this amount of Rs. 592.28 million is equally divided among 28 channels then every channel will get Rs. 21,152,857 per year, hence Rs. 1,762,738 per month. Factually it is not possible by any means that one TV channel can be run with money as low as Rs. 1,762,738 per month ($20,935). There is no other legal source of income for TV channels in media market as the market does not generate any subscription revenue [9]. A senior official of Dawn TV informed Viewpoint on condition of anonymity that total monthly expenses to run a news channel are around Rs. 40 million. Another senior official from ARY network further verified these numbers and informed that its costs around Rs. 20 to 30 million per month to run an entertainment channel. Keeping in view these all facts, it is not possible for Pakistani media market to thrive for long period and we can predict that bubble will burst soon and many channels will have to shut down their services. According to the break-even point theory, any firm needs to meet its fixed costs in order to keep its operations running.  Below break-even point, a firm will need either to obtain additional financing or to liquidate some of its assets to meet its fixed costs [10]. In above mentioned case, most of media firms are not even able to meet their fixed costs and sooner or later will have to leave the market.
In order to inspect the claims made by both ARY and DAWN news officials, let us examine the only financial data available from a media house: Hum TV. Hum TV (Eye Television Network) is a semi-public corporation and according to the financial report of 2008-2009 [11] its total expenses for the fiscal year were Rs. 78,397,045 with Net Revenue of Rs. 1.117 billion approximately. Eye Television Network is one of major media corporations in country and secure almost 9% from total ad spend with its four channels. In the beginning of year 2008-2009, it owned two channels. The third channel (Style360) started operations in August 2008 while the fourth one (OYE) was launched at the end of this fiscal year. So we can safely claim that during the whole period of 2008-2009, three channels were in operation. This fact leaves us with calculations that total expenses per channel per month for Eye TV Networks are about Rs. 22 million, keeping in view the expenses mentioned above. In the meantime, remember that all four channels share higher management, technical facilities and distribution resources. These calculations substantiate the claims made by officials from DAWN and ARY TV.
Most of the Pakistani media industry is owned and controlled by private firms and individuals, so it is not possible to access any financial information on scientific grounds, but with some exceptions. Revenue sources, expenditures and financial values of these media houses are an inaccessible secret which is nothing but another ‘ugly secret’ of our society. Everyone knows something, but no one dares talk. It is evident that a few channels are being financed by mysterious sources else if any economic rule is applied, some of the channels must have been closed down by now.
Notes:
1. Cyber Letter Gallup Pakistan [online]. 2009 June; Available from: URL: http://www.gallup.com.pk/newslist.php?id=MEDIA 
2. Gallup Pakistan's Annual Advertising Expenditure Data [online]. 2009; Available from: URL: http://www.gallup.com.pk/GallupPakistanAdSpend.php
3. Gallup Pakistan's Annual Advertising Expenditure Data [online]. 2009; Available from: URL: http://www.gallup.com.pk/GallupPakistanAdSpend.php
4. MediaBank. Annual Subscription based Report. http://www.mediabankpakistan.com/ 
5.  CSF Achievements. Ministry of finance Government of Pakistan [online]. Available from: URL: http://www.competitiveness.org.pk/subpage.php?pageid=55 
6. Annual Financial Report 2008-2009. Available from: URL: http://www.eyetv.com.pk/financial/2008-2009/Financia_Report_2009.pdf  
7. For further details: http://www.pemra.gov.pk/satellite_tv.html 
8. Annual Report Eye TV 2007-2008. Available from: URL:http://www.eyetv.com.pk/financial/2007-2008/ANNUAL/2007-2008-annual.pdf 
9. Crampton T. Salman Iqbal on ARY and TV in Pakistan [online]. 2007 Oct. 02; Available from: URL: http://www.thomascrampton.com/media/salman-iqbal-on-ary-and-tv-in-pakistan/ Asia subscription TV figures higher than ROW combined . Available from: URL: http://www.digitaltvnews.net/content/?p=11224
10. William JN, Haka SF, Bettner MS. Financial and managerial accounting. 13th ed. Chicago: Irwin Professional Publishing; 2001. p. 844-845
11. Annual Financial Report 2008-2009. Available from: URL:  http://www.eyetv.com.pk/financial/2008-2009/Financia_Report_2009.pdf

Saturday, January 30, 2010

How To Report The News

Oh this is effing brilliant! A must watch for all television reporters. The Guardian's Charlie Brooker, take it away...