Many Pakistani TV Channels Face Financial Crisis | audiencescapes

KARACHI, Pakistan -- Brisk expansion in Pakistani satellite television over the past few years is likely to shift to rapid shakeout soon amid widespread financial strains, shrinking news source options for people in the country, industry insiders predict.

"Mushrooming growth of channels, devaluation of the rupee, and rising costs of fuel and equipment have thrown most of the channels into deep financial crisis," said Ilyas Shakir, CEO and founder of Dhoom, a Karachi-based Urdu channel.

A total of 83 licenses for satellite TV channels have been issued, including about 38 for news and current affairs channels (including regional new outlets). Around 65 channels are currently operating, up from only 16 in December 2005. ThePakistan Electronic Media Regulatory Authority (PEMRA) estimates that about US$3 billion was invested in electronic media (TV, radio and interactive media) from 2002 through 2009.

Shaukat Mahmood, general manager in Pakistan of advertising company MediaEdge (a unit of WPP), estimates that only about seven Pakistani satellite TV channels are actually turning a profit. MediaEdge, the largest advertising group in Pakistan, claims to have a 45 percent share of the electronic media,. It also monitors channel rankings, providing the group with insight on stations' financial health.

Total revenue in Pakistani electronic media reached Rs23 billion (US$273 million) in 2009, up from Rs20 billion (US$238 million) in 2008, Mahmood said. But he claimed that that just seven leading channels- Geo, Express, Dunya, Aaj, Samaa, ARY and Hum-command about 55 percent to 60 percent of electronic media revenues. Other channels divvy up the remainder.

He pointed out that the leading TV channels are charging up to Rs 0.30 million (US$3,571) for one minute of advertising during prime time, but the channels at the low end of viewer rankings command only Rs1,500 to Rs2,500 (US$17-35) per prime minute.

Shakir, who is also chief editor of "Qoumi Akhbar" the second largest Urdu-language newspaper in Karachi, explained that electronic media experienced a boom phase from 2003 to 2007, when the economy was doing well and the political situation was relatively stable. But the tide turned in 2008 amid political unrest and economic meltdown.

In the space of a few months in mid-2009, the rupee weakened to Rs85 to the dollar from Rs63 to the dollar, creating a large financial burden for already-challenged TV channels.

For example, a TV channel that was paying US$15,000 (Rs1 million) monthly to satellite operators saw that charge rise to Rs1.26 million in local currency, he explained. The devaluation had a similar effect on fuel and other costs.

Declining News Options

Azhar Abbas, managing director of Geo TV, said that any consolidation in Pakistani TV is likely to hit news channels hard. “News channels are capital intensive and [require] big investment. Quality programs and coverage are essential for their survival,” Abbas asserted.

The big news channels, backed by strong media houses, can survive for a long time, but the medium-scale channels may not be able to sustain themselves in the future, Abbas said. He was reluctant to name channels struggling for survival, saying that it would aggravate their problems. If some channels disappear because of financial constraints, it would not be a problem for the viewers, he argued, as the leading news channels would continue to provide information to the people in the country.

Imtiaz Khan Faran, president of the Karachi Press Club, said TV channels will continue to produce objective news content, shakeout or no. "Electronic media enjoys complete freedom of expression; there is no interference of the government in this sector," he declared. The previous and incumbent governments tried to curb the freedom of TV channels with restrictive codes of conduct, but the media rejected these moves, he said.

Nadeem Malik, an anchor of Aaj TV and a former bureau chief of CNBC in Islamabad, said the government is concerned about graphic coverage during bomb blasts. He said the channels have voluntarily stopped showing dead bodies and other offensive scenes. He said a group of three top TV news executives (Talat Hussain, director of news at Aaj; Azhar Abbas, managing director of Geo; and Fahd Hussain, director of news at Express) is negotiating a new code of conduct with the government aimed at reining in graphic coverage.

However, Malik said the channels would not accept any law or attempt by the government to curb the freedom of the media in Pakistan. In the past, the TV channels have strongly opposed curbs on media freedom and this spirit would be upheld in future, he added.