Media Market: Money and Control
Pakistan’s media market has experienced massive growth commensurate with an expansion in the media landscape, economic growth and increasing audiences in the past decade overall. However, recent political transition and stumbling economy has affected the media market and disrupted funding-related control and is changing it to other means of influence including regulatory coercion and censorship.
While earlier, media advertising, government funding and political control created layers of risks to the independence of the media market of the country, new market and political risks still leaves the news media in Pakistan susceptible to undue control related to regulatory and market practices and thereby potentially vulnerable to manipulation and affecting reliability and quality.
To get a clearer picture despite gaps related to information and transparency challenges, we will have to consider the list of the top 40 news media outlets in Pakistan based on audience shares, the overall size of the media market based on advertising revenues, government funding and the changing economic landscape affecting the media.
- Pakistan’s news media landscape in terms of audience share
Newspapers: According to data on Pakistani media audience shares in 2018 from Gallup Pakistan, the accumulative audience shares of top 10 newspapers constitute 86% of the audiences shares of all newspapers in the country. The Top 4 newspapers have 70% of the audience share (more than four-fifths) – while the remaining 6 have 16%.
TV channels: The accumulative audience shares of top 10 news TV channels constitute 80% of the audiences shares of all news TV channels in the country. The Top 4 TV channels have 55% of the audience share (more than half) – while the remaining 6 have 25%
Radio stations: The accumulative audience shares of top 10 news radio stations constitute 48.2% of the audiences shares of all news radio stations in the country. The Top 4 radio station owners have 35.6% of the audience share (more than half) as they own 7 out of top 10 outlets in the market – the remaining outlets have 12.6%
News websites: The accumulative audience shares of top 10 news websites in Pakistan constitute 26.52% of the audiences shares of all news websites in the country. The Top 4 players in the online media have 24.84% (more than half) of the audience share, as they own 8 outlets out of top 10 – the remaining outlets have 1.68%. Jang group has 9.84% audience share in the overall total of 26.52% with three websites of Jang, The News and Geo which proportionally amounts to 37.1% of overall audience share out of the top 10 websites. Express group has 8.03% audience share in the overall total of 26.52% with two websites of Express News and Express Tribune which proportionally amounts to 30.28% of overall audience share out of the top 10 websites. Together Jang group (37.1%) + Express group (30.28%) = 67.38%. This means two media groups have over half of all news website traffic of the top 10 news websites in the country!
2. The size of the Pakistan media economy
A news media industry with arresting growth
The new millennium saw a radical transformation in the landscape of Pakistani media in terms of size. From one state-owned TV channel and one radio station – both state-owned – in 2002, before the country opened up the broadcasting sector for commercial players, it now, at the start of 2019, a total of 88 TV channels (including news and entertainment channels) and 209 radio stations, according to Pakistan Electronic Media Regulatory Authority (PEMRA). The numbers of journalists in the same period ballooned from about 2,000 to over 20,000 and the overall number of people associated with the media industry to about 250,000. This expansion in the size of the media industry came off the back of improving economic fundamentals, an increase in per capita income and a rise in consumer economy with growing surplus in private incomes accompanied by an expanding advertising sector.
Pakistan’s official news agency Associated Press of Pakistan (APP) reported in 2017 that there has been a cumulative investment of USD 4 billion in the electronic media industry in Pakistan between 2002 and 2017 and was estimated to touch USD 5 billion by end of 2018. It said the overall national growth contributed significantly to the development of the electronic media industry in the private sector and helped expand work of media groups, content production houses, advertising agencies and proliferation of the performing arts.
However, the second half of 2018 brought bad tidings. Pakistan’s media industry, once viewed as among the most vibrant in South Asia, started contracting with close to 2,000 journalists and media workers reportedly laid off and several outlets shut down. Partly affected by the outcome of July 2018 elections that brought a government to power headed by a party not seen as friendly to business and partly by the ailing economy, coupled with the withdrawal of government subsidies and dwindling advertising revenue, forced even big and stable media groups to shutter their publications and lay off journalists. The Jang Group – the country’s largest media group – shut down its three publications and two bureau offices, leaving more than 1,400 journalists and related staff jobless in one single day. Express Media Group and Dunya Media Group – the third and fourth largest media groups – also laid off over 200 journalists apart from cutting the salaries of remaining workers by 15 to 35 percent.
The previous media boom had benefited a certain class of journalists, mainly TV hosts, who earned huge salaries and attracted thousands of young people to the profession of journalism. Dozens of universities established media science departments since 2005 to cope with the needs of the then-booming media industry. But currently, only a few channels manage to pay salaries on time – so much so that the largest, Geo TV, now often runs in arrears for several months in payment of salaries to its staff, shifting the blame to the curtailment of government and private advertising. As 2018 closed, the media industry was looking shaky.
Falling but still robust advertisement revenues for Pakistani media
Over the course of 2016 to 2018, Pakistan’s overall advertisement spending on media has shown an overall declining trend. The total media advertising market in Pakistan at the end of the fiscal year 2017-18 and in the preceding fiscal year, which included TV, print, radio, digital, out-of-home, brand activation and cinema categories, according to quarterly Aurora magazine’s print edition issued in the last quarter of 2018, was as follows:
In fiscal year 2016-17, the total ad-spend was PKR 87.7 billion (USD 730.8 million). How did the 7% decrease in overall media ad-spend in Pakistan in 2017-18 (from the preceding year) translate for total advertising revenue per medium and percentage share per medium? According to Aurora, the ad revenue for TV decreased by PKR 4 billion (USD 33.3 million), a decrease of 9.5% in revenue and 2% in share; for print it decreased by PKR 500 million (USD 4.1 million), a decrease of 2.5% in revenue and 1% in share; for digital it decreased by PKR 2.5 billion (USD 20.8 million), a whopping of decrease of 46% in revenue and 4% in share; while for radio it decreased by PKR 500 million (USD 4.1 million), a fall of 17% in revenue but no change by share.
Biggest advertisement sources for the media
According to Aurora figures, of the top 10 advertisers (as product category) of print media in 2017-18, the federal government was the biggest spender, up from fourth position the previous fiscal year. In the second position was the real estate sector (first in the previous year), educational institutions at third (second in the previous year), financial services at fourth (third in the previous year) and big pharma at fifth (same position in previous year).
Among the top 10 advertisers (as product category) of TV media in 2017-18, the private sector, particularly the consumer goods and telecom industries, dominated, both on the news channels as well as the non-news channels.
Among the top 10 advertisers (as product category) of radio media in 2017-18, again the private sector, particularly consumer goods, real estate, telecom and appliances industries, dominated.
Influence peddling through cross-media reach
The list of top 40 news media entities in terms of audience share, according to Gallup Pakistan 2018 data, indicates that at least seven media groups own more than one media – including TV, radio, print and internet. This horizontal cross-media concentration expands audience outreach as well as influence for these companies.
TV channels – biggest earners: In terms of advertising revenue in the fiscal year 2017-18, according to Aurora figures, of the top 15 biggest TV channel earners, seven were news channels and the rest entertainment channels. Of these the news channels of Geo and Dunya were among the top five earners raking in nearly PKR 4.5 billion (USD 37.5 million) of the total PKR 26 billion (USD 216 million) top 15 ad revenue of the entire TV sector. Of these, the biggest single winner was Geo with its news (Geo News) and entertainment (Geo Entertainment) channels figuring in the top 5 and taking home PKR 5 billion (USD 41.6 million).
Newspapers – biggest earners: In terms of advertising revenue in the fiscal year 2017-18, according to Aurora figures, of the top 15 biggest newspaper earners, the top five newspapers raked in PKR 9.7 billion (USD 80.8 million) or 56% of the entire revenue of PKR 17.3 billion (USD 144.1 million). Of these the biggest winner was the Jang Media Group with two of its publications, the Urdu-language Jang daily and English-language The News daily, snapping up over half of this revenue at PKR 5 billion (USD41.6 million).
3. Government funding for media in Pakistan
Even since the liberalization in 2002, the State has long remained one of the most important sources of funding for Pakistan’s private media sector as for both broadcasting and the printed press in Pakistan, government advertisements have historically acted as the backbone of their finances. The federal and provincial governments have often bought airtime on leading TV channels during primetime hours, subsidizing their financial operations. Similarly, governments have also traditionally subsidized operations of leading newspapers by providing them with advertisement revenues.
According to Dawn newspaper, the advertising market size in Pakistan grew from PKR66.9 billion (USD583.3 million) in financial year 2015 to PKR87.7 billion (USD733.3 million) in 2017. In August 2018, the Senate was informed that the government provided advertisements worth PKR15.7 billion (USD133.3 million) to print and electronic media from 2013 to 2017.
Additionally, particularly after the July 2018 elections, the provincial governments of Punjab, Sindh – the main contributors of advertisement revenues for print and electronic media – and the federal government in Islamabad, have slashed their advertisement budget by 70% leaving the media industry in a bad financial situation.
Industry sources say this isn’t a crisis out of the blue but over the better part of the second decade of this century the newspaper industry in Pakistan has recorded a 15% to 20% decrease in sales. A major chunk of print media market in Pakistan comprises Urdu-language newspapers while the market for English-language newspaper is small by comparison. Since 2010, mid-ranking newspapers have undergone a substantial reduction in advertisement revenues forcing the lay-off of hundreds of staff. Because of declining readership of English-language newspapers, the telecom companies are diverting their remaining ad-spends to Urdu-language TV channels. This also explains the closure of two English language news channels since 2015. Although Dawn TV (English) and Express 24/7 (English) belonged to two of the largest media houses in Pakistan, they were forced to shutter them following a steep decline in ad-spreads.
Failing news media business models
Many journalists in Pakistan now think that this business model – of ownership being concentrated in the hands of a sole investor or single family – deciding the fate journalists and journalism as a whole in Pakistan has failed and the implications have not just been restricted to closure of business but also to quality of journalism and the rise of censorship. Failing financials have forced the media owners and managements to cave in to rising pressure from the state machinery, including not just the political government but also the security establishment both of which are losing their appetites for criticism of their policies by a freewheeling media. The falling advertisement revenues are matched by many of the finest journalists and journalism shows being subdued or downright silenced. Financial squeeze of a few key media titles has had a ripple effect, especially since 2018, on most of the remaining media to become significantly less critical on the authority and the executive compared to the past few years.
While the country has a big consumer base and annual media advertisement spread at the end of the fiscal year 2017-18 was PKR 81.6 billion (USD 680 million), the TV market is mostly bankrolled by the private sector with even large government spending not figuring in the top 10 ad-spends of TV media. This allows the TV news media to adopt and pursue relatively independent journalism with the last few years this medium showcasing oftentimes scathing critique of various governments at both the federal and provincial levels. Pakistan’s print media sector, however, has been majorly dependent on government advertising and since 2016 has seen the federal government its biggest advertiser.
While the print media often continue adopting a hardline stance against governments, their news reporting, in general, is not equally independent, perhaps reflecting this over-dependence on government advertising. Things have, however, been changing since the elections in July 2018 brought the Pakistan Tehrik-e-Insaf party of Imran Khan to power which has shown hostility in its dealings with all media and has heavily slashed government ad-spend forcing the media to cut over 2,000 jobs while some TV channels and newspapers have even been shut down. The digital media in Pakistan is not supported by the government and therefore exhibits a totally independent streak in its editorial positions being sustained by the private sector rather than the public sector.