The Spread of free to air Channels in Ethiopia

These days, free-to-air satellite television channels are increasing in Ethiopia. Contrary to the picture five years ago when only a few government sponsored television channels were operational, 16 private limited companies have currently received licences to broadcast their programs. However, governmental policy, access to quality content and huge capital requirements are jeopardizing the survival of TV channels especially those that have recently joined the sector as EBR’s Kiya Ali reports.

Meseret Shifa is a cheerful and smiley woman who considers television her best friend. She came to Addis Ababa from Debark eleven years ago with the hope of defeating poverty, and makes a living selling samosas, tea and coffee on the side of the street. Her day starts at five in the morning and goes until six at night. As a habit, when she gets home after work, the first thing she does is turn on the television. She spends an average of three to four hours each day watching television.  

“As soon as I get home after the lengthy work day, I turn the television on. And though I have the responsibility of doing household chores, I do it all with the TV on,” Meseret tells EBR. “Since I live alone I used to feel lonely before I bought a television. Now TV fills the shoes of absent friends and families. It is the cheapest source of entertainment.”

Meseret is not the only one who has a strong relationship with the various programs that are televised through free to air satellite television channels. The growing number of satellite television broadcasters is testament to how many urban residents enjoy watching television in their spare time. Satellite dishes hang from roofs and balconies on a massive scale in the capital city and other regional towns. Besides urban areas, people living in countryside are also enjoying the benefits of free-to-air channels. 

On the contrary, even just five years ago, there were only a few government-sponsored television channels in operation. But now, more than ten channels have been started by the private sector broadcast companies. According to information obtained from the Ethiopian Broadcasting Authority, so far, 16 private limited companies have received licences from the Authority to start broadcasting. Out of that number, 12 have already started transmissions, while two of them are undergoing a trial period, and the rest are preparing to start transmissions soon. 

Globally, the television and broadcasting sector has been undergoing significant technological and structural changes, especially in recent years, which have given consumers access to a great variety of communications and media services. In Ethiopia too, television channels, which have increased dramatically in just a few years, are gaining the ears and hearts of audiences who have been hankering for more choice and alternatives. 

Even though the sector was recently liberalized and technological advancements have lowered barriers to entry, there are still significant challenges faced by broadcasters. “Before we went live, as you would expect in any emerging market, the biggest challenge was finding qualified professionals that could deliver the level of quality content we had set out to bring to audiences,” Hailu Teklehaimanot, PR and communications director at Kana TV, told EBR. “Especially finding enough qualified talent to allow us to produce four hours of fresh content every day was a challenge.”

Studies also indicate that since the level of capital required is high, it may constitute a significant barrier to upcoming as well as operational broadcasters. One of the channels confronted with this problem was Nahoo TV, which entered the market with an investment of ETB120 million a year ago. “The industry is challenging with little or no profit,” argues Theodros Shiferaw, owner of Nahoo TV. “I am still injecting money into the channel from other sources just to stay in the market.”

The success of television channels is moreover determined by the ability to disseminate content that consumers demand and to differentiate their offerings from other broadcasters. Hailu says finding enough qualified talent to allow Kana to produce fresh content everyday was a challenge. “We recruited and trained our human capital from scratch. The approach we took was to use dubbed content as on-the-job training for our team. This allowed us to train our team in all aspects of production, acting, directing, voice, and video editing and post production.”

As a result, different companies advertise their products and services on Kana TV. The advertisement rate for Kana varies between three dollars to USD20 per second depending on the season and time of day. Kana also offers a special discounted rate for small and medium companies which find advertising on TV financially daunting. 

Of course, among the many factors that influence the success of free to air satellite television channels, is getting advertisements.  However, relatively new channels in the industry like Nahoo have not been successful in cashing in on advertisements. “Since advertising companies come through intermediary companies (promotional companies) we get half of the income that we should get. In addition, most of the companies prefer entertainment programs to advertise their products and services, rather than serious programs. This affects our mission and will push us to focus only on music, sport, and drama instead of programs like talk shows,” says Theodros. 

Yet, TV channels might even face more danger from an upcoming law tabled in Parliament in December 2018. The draft bill restricts the advertisement of drinks with more than 10Pct of alcoholic content by time and place. 

Close to 70Pct of the advertisers on Nahoo are beer companies. “Instead of forbidding the broadcast of beer advertisements during daytime hours, the government could have used other alternatives like heavy taxation to discourage consumption.  The government should also consult with us before enacting the law,” Theodros stresses. “Unless the government provides incentivises to the new-comer media,  like reduction of taxation and introduction of laws that enforce advertisers to follow fair distribution of advertisements among TV channels, most of the new TV channels will be shut down and leave the market soon.” For one 30-second advertisement Nahoo TV requests ETB15,000 to ETB25,000.

But Eden Solomon, marketing manager at Nyala Motors, believes that the proliferation of free air TV channels has its own challenges and opportunities for companies which would like to advertise their products and services. “Since the new channels may come up with innovative and new programs, they could attract more viewers. So it would be attractive enough to advertise on these channels,” she says.

“In my opinion, the advantages of having many local TV channels outweigh the disadvantages. Having the alternative to choose among channels based on number of viewers, program quality as well as contents and which channels our target group prefers could be mentioned as an advantage,” Eden explains. “However lack of research on consumer channel preference is a challenge on our decision making regarding the choice of TV channels to advertise our products.” 

According to Eden, there is no significant difference among channels regarding advertisement cost, adding,“Advertisers’ preference of channels is based on programs favoured by their target groups and number of viewers.”

Edlawit Tadess, marketing and sales manager at Glorious, which is the exclusive and authorised Ethiopian distributor for leading brands such as Ariston, Sony, Hitachi and Philips, agrees with Eden. “Knowing which channels your target group prefer is important to ensure your message is delivered to them. Since the number of channels is keep increasing in Ethiopia, while marketing your product selecting appropriate channels is important based on your target group regardless of its cost.”

 8th Year • Jan.16 - Feb.15 2019 • No. 70

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