Media And Entertainment Industry's Role In The Economy

Media And Entertainment Industry's Role In The Economy
“No country can build reserves by selling towels…you have got to do this by attracting local and foreign private investment.” Mian Mansha reportedly made these comments in the context of the budget proposals for 2023-24. The bigger problem he sees are the numerous structural issues and regulatory challenges. No truer words have been spoken when put in the perspective of Pakistan’s media and entertainment industry.

Last year BCCI auctioned the Indian Premier League’s (IPL) TV and digital media rights (2023- 2027) for the subcontinent and India market for a whopping US $5.1 billion. That’s nearly a billion dollars a season compared to our last auction of around US $12 million a season for PSL’s domestic rights. India sees media and entertainment as the ‘sunrise sector’ of its economy. It is also set to cross the US $50 billion mark by 2026. This prospect has been made possible due to excellent content monetization by numerous revenue streams, and mobile and TV subscription revenues reaching broadcasters and content producers.

While official figures are hard to come in our case, annual figures reported by Dawn’s Aurora Magazine indicate our advertisement market, and almost total market size to be around PKR 89 billion in 2022. That’s well under US $500 million in today’s money. Interestingly, but not surprisingly, there is no recent official data on different subscriber numbers, ARPUs and the subscriber market revenues.

Our TV household market was to cross the 27 million mark sometime in 2022 by some estimates. On the other hand, our broadband Internet subscriber growth is growing exceptionally well. It has recently crossed 127 million, driven mostly by new mobile connections that make up approximately 97% of this population. Put together, we are looking at an opportunity of over 150 million media and entertainment subscribers. But our media regulator continues with its fixation on households and TVs. And hasn’t it lost its relevance by doing so?

Google and Facebook revenues accounted for nearly one-fifth of Pakistan’s advertisement market in 2022. The big tech giants and other digital players are experiencing decent year on year growth. Recent bandwidth consumption data on PTA’s website indicates that YouTube and TikTok together make up for nearly 60% of monthly video services consumption in Pakistan. Formal video broadcasters and distributors are nowhere close. Our own domestic platforms are nearly non-existent as credible commercial players. And those who are making efforts are anyways functioning under a defunct regulatory loophole, which was never meant for modern OTT services.

In a different world, broadcasters and distributors would be working with Facebook and YouTube to prevent piracy of their content on these platforms. It is essential for commercial viability and for retaining an independent identity. In our case, our leading broadcasters are expressly relying on their YouTube and Facebook channels for content monetization. In this case, it is also a necessity when one oligopoly has to deal with another oligopoly in distribution under persistently domineering governments.

In other developments, the Federal Government has earmarked PKR 1 billion for health insurance of privately employed journalists and media workers in next year’s budget. This is despite the fact that their employers are lagging in payment of PEMRA’s dues that have grown beyond PKR 50 billion and often fail to pay their employees’ wages on time. And then we have another 5-6 billion rupees, owed to government owned satellite operator PAKSAT.

Our present Information Minister’s fascination with the film industry is another enigma. This interest was a highlight of her last stint in this position. A long-term tax holiday and other discounts are undoubtedly excellent support for a struggling industry. But is it wise to continue with such ideas when the data say otherwise and better prospects lie elsewhere?

Why is then the government bending over backwards in an arbitrary manner? And is it the right time to reconsider the size of our industry to make it more self-sustaining? Or alternatively, do we need to review how we have been running it so far? These are genuine intuitive questions rather than criticism, for a government with limited resources and a population dissatisfied with the current media offering.

Mr. Aamir Ibrahim, CEO Jazz, wants a smartphone in every hand and broadband in every home. He must be having his own sound reasons for this. Video services have a role in the vertical growth of telecom ARPUs. One hopes this is on his and others telecom leaders’ radar. After all, the Indian success in content monetization has two key parts; subscriber volume and their connectivity.

Our oldest affliction, amongst many, has been our obsession with control of media. We chose to keep local and foreign investments out of media through original statutory design. When we chose to keep the world out of our small pie, we invited them to compete against us. Today, our best bets are in struggling TV channels and legacy cable operators. They are unable to play their role in the country’s domestic or regional political projection. Short-term domestic political benefits are no benefits if the industry cannot commercially stand on its feet.

And lastly, a few comments on Pakistan electronic media market’s most popular myths: DTH (satellite-based video distribution) held the promise of a quantum leap in content quality and revenues in Pakistan. Its failure to launch has got nothing to do with economics and market conditions. Fixed broadband has no pragmatic promise as a universal media and entertainment backbone in Pakistan due to exorbitant costs. Our traditional cable operator and ‘around the corner licensing frameworks of PEMRA’ are relics of the past, and that’s where they should be. Pakistanis can differentiate between good and bad content, and will happily pay a premium for quality. And lastly, content and technical infrastructure will not improve without new investments and new players.

The media and entertainment industry are viable alternatives and potential drivers for Pakistan’s economy, society and its global and regional projection agenda. Satellite (DTH) and OTT licenses separately or in a hybrid model, is the rightful future backbone of our media distribution. The media industry’s salvation lies in these, besides driving content production and telecom revenues.

What we are dealing with right now in Winston Churchill’s words: ‘if you destroy a free market, you create a black market.’ The question is: how can we fix this black market? Will our political class and policymakers rise above the shortsighted bickering for media control and see where the real opportunity lies?

The author is a project management and technology professional.