Room for More TV Channels?
Today, the face of Pakistani media is different from what it was a decade ago. Till 2001, media in the country comprised a single state-owned TV channel and a few newspapers. There was also a state-owned AM radio channel, Radio Pakistan, until 1998 when FM licences were given to nonstate operators. There has been a significant growth in both print and electronic media over the years, with kinvestment seeking a piece of the pie in terms of ownership.
The viewer, listener and reader is being beckoned in different directions owing to varying policies followed by each medium. Things have particularly changed with the influx of private television and radio channels. Keeping the public has become a business that helps organizations rake in huge profits by selling airtime to advertisers. With more than a hundred news and entertainment television networks, channel surfing now is almost akin to drowning. You turn on the television and desperately search for clarity. Breaking news is the prime minister breathing. Talk show analyses smack of doomsday conspiracies. But we also realize that Pakistan is no ordinary country with its coups and carnage. We watch helplessly as the 7.00 to 9.00 pm news cycle is steamrolled by events unfolding at 9pm – or after. There are countless TV channels to choose from so why does it seem like nothing is on? Has the market for the television channels in Pakistan finally become saturated?
Let’s look at the facts: Between 2002 and 2005, the number of satellite and cable TV channels in Pakistan tripled. Advertising spending on them increased 17 fold (from Rs200 million to Rs3.5 billion). Suddenly there was nothing except television. Between 2002 and 2012, television viewership went from 40 million to 124 million. Since 2008, the economy has been in a slump. Advertising has shrunk too. That did not, however, stop new channels from opening.
Today, the Pakistan television industry’s revenues are more than a whopping Rs30 billion annually. Some 90-95 per cent of that comes from advertising while the rest comes from syndication or programs sent abroad. Unlike their foreign counterparts, Pakistani TV channels make absolutely no money from subscriptions. Meanwhile, revenue from subscriptions in foreign markets makes up the largest share of their income.
For advertisers, television is one of the most effective media as it has a large-scale outreach and to attract advertisers, ratings play a vital role. These ratings are measured through a ‘People Meter System’ with hundreds of meters installed in people’s homes in up to eight cities. The windfall from the advertising industry, in case of the top 32 channels, is at best Rs592 million. On an average, every channel earns roughly Rs1.7 million per month from advertising.
In comparison, a top-tier channel will spend roughly Rs100m a month on content but the arrival of foreign, dubbed plays has brought the bill down drastically. That explains why media groups have expanded to include entertainment channels and why there has been a scramble for Turkish dubbed plays, but that has yet to translate into profits. Why? Since all channels are available free on cable, there is only one source of revenue: advertising.
Unfortunately, that pie has not kept up with the new channels. On the face of it, advertising is growing 20 per cent per year but the number of channels is increasing even faster, say experts. There is fierce competition and almost all news channels are being subsidized by other businesses because of which more than 90 per cent of news channels are running in the red.
Meanwhile, upcoming new entrants believe they will not only be able to survive but also transform the media landscape. Existing players, however, are less than enthusiastic because they feel the market is saturated. “We may be headed for a period of continued launches, because people who have made money are entering the media, but also a period when many players are pushed to the brink to cut costs or exit or be unable to compete,” explains media analyst Gulraiz Khan. Some media conglomerates, however, continue to buck the trend. Geo, a subsidiary of Independent Media Corporation, went ahead and launched another news channel, Geo Tez, and an entertainment channel, Geo Kahani. Hum Network Limited, the only publicly listed media group, has also launched a third channel, Hum2.
Somewhere in distant future there may be business closures and some form of consolidation in the media. Until then, it seems, the bubble will continue to grow, and float.