Lifestyle Change

Lifestyle Change Drives Satellite Channel Growth

A number of satellite-based television channels have emerged in Ethiopia in recent months, some of which have enjoyed widespread popularity. Experts say this is a positive trend, as these channels increase economic development through advertising and creating new markets. Still, some argue that these networks may have a negative impact on developing countries, especially since many programmes come from foreign countries and don’t take into account the local cultural context. EBR’s Tamirat Astatkie spoke with key stakeholders to learn more about the driving force behind television network development in Ethiopia and the potential economic and societal changes it may bring about.

Until recently, Ethiopia had just a few television channels, almost all of which were controlled by the government. Thanks to the significant technological and structural changes taking place in the television and broadcasting sector, as well as changes that are transforming traditional broadcasting systems, an increasing number of television channels are emerging.
Due to the emergence of a free-to-air satellite TV and radio broadcasting system, which allows any person with the appropriate equipment to view or listen to channels without a subscription and other related costs, Ethiopians have more options to consume media. However, most of these networks are stationed abroad, as the government has only recently begun the process of issuing licenses to the local private sector to create and broadcast television channels in Ethiopia.
Some of these satellite channels have amassed a large number of viewers in just a few months. Nahoo TV, which started its test broadcast on the Egyptian Satellite Company (NileSat) after it was inaugurated in January 2016, is among the recently launched channels.
Nahoo, a channel broadcasting from Mombasa, Kenya and owned by Ethiopians and people of Ethiopian origin, operates through TUBA Media, an entity located in Ethiopia and responsible for production and sales. The word ‘nahoo’ is derived from Ge’ez – the ancient Ethiopian language – and means ‘now is the time’, which also serves as the network’s motto.
Currently, Nahoo screens 34 programmes produced in-house by TUBA Media and outsourced to other content production companies. The network’s programming includes movies, scripted comedies and dramas, entertainment news, medical talk shows, construction and architecture programmes, and a psychology talk show, among others. Music videos also comprise a large portion of the network’s airtime.
“The hosts of all programmes are professionals in the specific [show’s] topic and 99Pct of [our] content is locally produced,” says Melaku Ali, Acting CEO and Marketing Director of Nahoo. It has a total of roughly one hundred employees, including journalists, technical staff and marketing personnel, 45 of whom work on a full-time basis.
Kana is another channel that has gained popularity among Ethiopians. Elias Schulz, Nazrawi Gebreselassie, Addis Alemayhou and Zeresenay Berhane Mehari formed the network, which is especially noted for broadcasting foreign drama series dubbed in Amharic. The network is headquartered in Dubai and has a commercial representative office in Addis Ababa and collaborates closely with BeMedia, an entity based in Ethiopia and responsible for production and sales.
From the outset, Kana was established as a satellite entertainment channel. Its managers say that before they launched the network, they consulted IPSOS, a renowned French company that conducts market research, to understand the television viewing habits of Ethiopians. “The research shows that of the total satellite TV viewers in the country, half of them already watch foreign content in its entirety, in a language that is foreign, exposing them to unfiltered content,” says Hailu Teklehaimanot, External Communications Head of Kana. “Thus, based on this research, the founders came up with a plan that would address the gap in the market.”
Located off Africa Avenue in Addis Ababa, Kana occupies four floors in the Cinan Commercial Building. There are 135 employees and 80Pct are recent university graduates that have been trained in-house.
Hailu says that cultivating young talent is an intentional effort at Kana: “We are truly invested in this and these young professionals are the ones writing, producing, directing, acting and editing all the original shows we are developing and they will be contributing to the industry beyond Kana in the future.”
Along with Nahoo and Kana, networks like EBS, JTV, Walta and the Ethiopian News Network are broadcast on Nilesat in addition to the nine local, free-to-air TV channels owned by the federal government and regional states.
The non-government owned channels are based outside of Ethiopia, meaning that local television networks are comparatively underdeveloped, but that may change soon. The Ethiopian Broadcasting Authority (EBA), which regulates television stations and programming, is due to issue licenses to broadcasters based in Ethiopia. Upon invitation of the Authority, a total of 28 companies showed interest to engage in commercial satellite broadcasting. Of these, five – Walta Information Centre (WIC), Fana Broadcasting Corporate (FBC), Dimtsi Weyane, Arki Broadcasting Service (ABS) and East African Film Production – submitted the necessary documents and project proposals to undergo the necessary screening and evaluation process to receive a license.
“Although it took us a long time to issue licenses to home-based satellite channels due to a lack of institutional capacity and the absence of a directive that [governs the development of these networks], which is now in place, five companies submitted proposals and the required documents,” says Mulugeta Sisay, Director of the Mass Media Registration and Licensing Directorate of the EBA. Of these five, three stations – ABS, WIC and FBC – were recently approved.
“Indeed, the 2007 Proclamation of Broadcasting Services includes an article that entrusts the EBA with issuing licenses for satellite television broadcasters established within the country,” he explains. “Hence, satellite channels like Nahoo and Kana didn’t receive licensing from the EBA, as they are outside its jurisdiction.”
Consequently, the EBA does not have a strong relationship with these channels except overseeing the programme content in case they breach conditions in the Broadcasting Proclamation. The EBA’s directive declares that any media service – including print, broadcast, advertising or any other programme producer – that prepares content within the country must acquire certification for content production. To obtain this, they must forward a proposal of the programme and the company’s registration from relevant government offices to be approved by the Authority.
In this regard, both Nahoo and Kana told EBR that they ensure that the content standards are aligned with all the regulations of the EBA at all times. They also affirm that they keep abreast of all relevant changes in regulations and ensure they are consistent with these in their operations.
It is not only in Ethiopia that the number of TV channels is increasing. In fact, according to a 2015 report by GSMA, a global technology research group, entitled ‘An Outline Assessment of the Growth of the Broadcast Market in Sub-Saharan Africa and its Implications for Spectrum Allocation’, there has been considerable growth in the number of TV channels in many Sub-Saharan African countries since 2011. As a result, the number of free-to-air and premium TV channels increased to 1,320 in 2014 from 292 in 2011.
Stakeholders stress that throughout Africa the television industry is making strides in the entertainment business. “Africa is seen by many in the TV industry as [the] last significant global market for the development of new digital platforms and associated information and entertainment services,” said Steve Christian, Vice President of Verimatrix, a company that works to enhance revenue for global multi-network, multi-screen digital TV, in an interview with IP&TV News in 2013. “African countries are opening their markets and their economies are growing at a much faster rate than other more developed parts of the world – albeit from a lower baseline.”
This growth will yield profitable returns, according to a report by PricewaterhouseCoopers that deals with the entertainment and media outlook in South Africa, Nigeria and Kenya from 2014 to 2018. It indicates that Africa’s TV industry is expected to grow exponentially, since consumer demand for entertainment and media experience is increasing rapidly.
For instance, Nigeria’s entertainment and media market grew by 19.3Pct in 2014 to reach USD4 billion, according to the report, and the market will likely double by 2019, with an estimated total revenue of USD8.1 billion. Kenya’s total entertainment and media industry is valued at USD1.8 billion in 2014 and it is expected to surpass USD3 billion in 2019.
According to Tekie Alem (PhD), Associate Professor of Economics at Addis Ababa University (AAU), the proliferation of the TV channels in Sub-Saharan Africa in general and in Ethiopia in particular is not a surprising occurrence.
“People’s demand for information and entertainment increases due to a change in lifestyle, which increases demand for not only basic needs such as food, clothing and shelter, [but entertainment as well],” he explains. “Additionally, the relatively cheap price of a satellite dish and the abundance of decoders and receivers in the market drive people to use satellite channels.”
He says the other driving force for the increase in the number of satellite channels targeting Ethiopians is that people want to see locally produced movies and music videos. “Watching a movie in the cinema is very expensive,” says Tekie, when compared with watching feature films in the comfort of one’s home.
However, the benefits of television network expansion extend beyond usefulness for consumers – it can help developing countries in their overall economic growth by linking consumer demand to products available in the market. According to Jean Jipguep, the former Secretary General of the International Telecommunications Union (ITU), “television promotes economic integration because it supports brand awareness of a small number of (usually imported) goods and services.”
This is because “telecommunications networks [like television stations]…not only facilitate economic trade in goods, by bringing together buyers and sellers, but more importantly, also promote trade in services upon which modern economies are built…because telecommunication is based on the passage of information from individual to individual, it is one of the cornerstones of a market democracy…. This system of information flow becomes more important for international trade where suppliers and customers are geographically removed.”
However, for Tenaw Terefe, Assistant Professor and Graduate Programme Coordinator at AAU’s School of Journalism and Communications, the increasing number of TV channels isn’t the only important consideration when discussing its economic potential: “Rather, the content and quality of programmes that capture the attention of the audience and sustain the business are also important.”
He substantiates his argument with a survey conducted by the government of South Africa to determine why young South Africans prefer foreign programming. “One of the findings of this survey is lack of quality production in local programming,” he says. “What is [the] guarantee for not experiencing the same [in Ethiopia]?”
Additionally, Tenaw questions the suitability of the advertising industry, which is a primary source of income for such media outlets. “The underdevelopment of the advertising industry and the limited number of companies that advertise their goods and services with a small budget will force the emerging channels to share a slice of [a small] pie,” he argues. “The more the channels share the limited advertising budget, the thinner their incomes become.”
Melaku’s experience highlights this concern. “We expected to take 50Pct of the advertising market share being the first to be on-air among the emerging channels, but that didn’t happen,” he says. “Therefore, Nahoo TV has cut down its expectation and strives to explore new markets.”
Studies conducted on television industry worldwide indicate that the key to understanding it is learning about the market for advertising. In their study entitled ‘The TV Industry: Advertising and Programming’, Tore Nilssen from the University of Oslo and Lars Sørgard from the Norwegian School of Economics and Business Administration argue that rivalry between TV channels not only reduces the revenue generated from advertisers but it can lead to a decrease in the total number of viewers, which discourages advertisers.
Hailu, however, does not believe that there are enough competitors in this market. “All emerging media and entertainment players that are in [or will enter] the market are pushing towards the same direction and these pioneers will help grow the market and serve the Ethiopian consumer,” he says. “Right now the market is too young for anybody to talk about ‘fighting’ for market share.”
Yet, other issues arise whenever a new industry emerges, especially one that can influence cultural norms. For Fekade Galecha, a business owner in his late 50’s, married and a father of two daughters, the social impact of new TV channels is a point of concern. “They have an impact on the productivity and the behaviour of the people. Both of my daughters and my wife are obsessed with the movies broadcasting on Kana.”
Even Jipguep, the former Deputy Secretary General of the ITU, acknowledges the influence television has on the culture of developing nations: “Television…tends to promote a culturally homogenised lifestyle in which externally imposed values are transmitted with little adaptation to local norms. Thus television tends to diminish the significance of local individual initiative in favour of multinational enterprise. As with transport, the form of economic integration which television brings is tinged with undesirable consequences which a society would not necessarily choose for itself.”
Regarding the impact that new channels bring to the society, Kibur Engdawork, a lecturer in the Sociology Department at AAU, argues that it is mainly determined by the nature of the programmes and the audience. “Television plays a great role in presenting events within their contexts to its audiences. Thus, its influence is immense in both good and bad ways. However, it’s too early to tell the impact of the emerging satellite channels because they have only been on air for a few months.”
He contends that media should be considered one among many factors that influence a person’s behaviour, including family, religion, and schooling.
Still, Kibur argues that the impact of television may be distracting from the societal issues plaguing a developing country like Ethiopia. “I am concerned by the programme contents of most of the emerging satellite channels that merely focus on trivial issues, like entertainment and information,” he explains. “They may greatly influence people to put aside important issues such as social problems, good governance and corruption. Consequently, this may lead people to be passive and not critically think about the issues that really matter in life.” EBR

4th Year • September 16 2016 – October 15 2016 • No. 43

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