The media crunch is real but a bit hyped by the media houses themselves. Ever since, the deregulation of the (electronic) media during Musharraf time, the industry mushroomed. Like the case of other de-regularized industries, at that time, such as telecom and financial sectors, there is a need of consolidation in the media (especially news channels) industry too.
The viability is in having 4-5 news channels in Pakistan, as is the case in most of the world, but there are no fewer than18 news channels operating in Pakistan. That has skewed the model in favour of associated services. For instance, cable providers, who used to run channels free of cost, now charge premium for having channels on their networks.
The salaries of analysts/anchors were compatible to their potential in other industries (or in print media), now with immense competition amongst news channels, remuneration of these anchors has multiplied manifold. That is a big strain on the cash flows of news channels. In short, the rating race, has faded the viability of media houses. Then, the uplifting satellite cost of electronic media is in dollars, with hefty currency adjustment, the operating cost has also ballooned.
The ongoing crunch is due to economic and political scenarios that have hit the mainstream media houses, and flawed models, especially in electronic media. Before delving into the argument of less advertising spend by government and private sector, a peculiarity in Pakistan media needs to be highlighted.
A few media houses (especially, news channels), opened up in the last decade or so as an insurance policy to safeguard owners' business interests or to spread narrative of 'hidden power groups'. That has changed the equation for conventional media houses, in the profession of journalism for decades.
Having established the unique characteristic of Pakistan media, let's see what tale the numbers reveal. The size of the advertising spend was estimated at Rs85-90 billion in 2017 within it, almost half of the advertisement was allocated for TV while around one fourth was the spent in print media. The rest is divided among radio, digital, brand activation and other avenues.
The natural progression is for the print and electronic media spend to gradually shift towards digital where it is easier to hit the target market. Digital is growing; but its size is minuscule as compared to conventional media. Time is not far for digital to be the main medium, while in Pakistan, conventional media does not seem well prepared for it.
The economic slowdown amid political uncertainty resulted in substantial cut in the private sector advertising spend lately. But the down in the media houses is perceived to be due to the halt in federal and some provincial governments’ spending and not releasing of outstanding payments on services provided during the previous regime.
To give the numbers a perspective, spending by all governments estimated at around 10 percent of total pie. Seeing this, it is hard to digest that cut in government spending, in the short run, is compelling certain media houses to go for significant cost cutting.
Yes, some rightsizing and media consolidation is due; but more of the problem arose due to perceived change in model of spending by incumbents in federal and two provincial governments. In the last ten years, the government spend in newspaper, and TV news channels advertisement increased substantially and the organizations grew accordingly and the recent cut by governments has significantly dented the cash flows of media houses.
However, the issue is skewed towards a few news channels and regional lesser known newspapers while main stream newspapers are relatively less affected directly. For instance, in main stream newspapers, governments have conventionally bargained good rates (at discount to corporate). On the flip sides, the rates in a few news channels in peak hours (7PM-11PM) government started paying premium to corporate which was an anomaly - but this was, at times, compensated by running government campaigns free of cost by same media houses.
A bigger irregularity was observed in small and unknown newspapers where government was probably the only advertiser and, in certain instances, rates in those papers were negotiated at premium to the most read papers.
The skewed model of concentrated spending in a few newspapers and channels might end now; and that has sent jitters in some houses. One news channel is closed, and some others have right sized. A few have genuine crunch while others took advantage of the situation to sack redundant staff.
The federal government has recently announced to clear the outstanding amount and said that government is working on plans on how to have media spend in future.
The rumors amongst journalists community is that now 'some forces' are pushing private sector spending to not route to certain media houses; and there is an unprecedented censorship on opinion pieces in a few papers. The balance is missing - in the last regime there was a case of institutionalized favoritism to a few slots in certain channels, and undue advertisements to unknown newspapers; in the current set up, the pendulum is swinging the other way.
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