Business feasibility study

ECUTIVE SUMMARY

DM Digital Global TV Network was established in June 2005. A Brit-Asian TV Network, it caters to a niche market of Ethnic Minority groups based overseas.

Broadcasting from Manchester, unlike its fellow niche market members, (majority operate from London) it has established itself as a household name with the Pakistani, Indian, Bangladeshi and a small percentage of other white groups.

Based on the commercial phone-in model and advertising model the network has over the years witnessed an unsteady flow of income. Inspite of financial difficulties, it has survived and overtaken its competitors; many of whom have shut down.

The network would now like to expand its company and launch a TV station in Pakistan. After this it plans to launch in key cities across the world.

The second proposed plan the network would like to take is by expanding its services as a media provider and launching a newspaper.

To launch financially in Pakistan is an expensive project, yet the networks strong ties in Pakistan can allow this to be a smooth transition.

Other factors that have been analysed in this report include the intended market, the proposed management steps they need to work towards and the improvements they should consider to reach a global perspective.

I have worked with this organisation for the last 3 years. I would like to state that since not much research has been carried out on the Brit-Asian market, I have used information passed on through people who I have worked with and interviewed and research and data collected from various agencies such as Ofcom, PEMRA, etc. It has not been easy to obtain as much information on GEO, although it is widely use an example throughout the report; this has however been substituted with the help of ex and current employees or freelancers from the Pakistani media.

Introduction

It is estimated that only one in fifty business ideas are actually commercially viable. Therefore a Business Feasibility Study is an effective way to safeguard against wastage of further investment or resources (Gofton 1997).

DM Digital TV Network has been in operation, locally for the last three years now. The Directors of the channel mark this as a success.

Ofcom reports from its total licenses offered from the period of 2000-07, 8% were for ethnic minority TV stations. Ofcom awarded 126 television licences in 2006 -109 for services broadcast in the UK and 17 for overseas audiences. This was down from the record 168 licences awarded in 2005 (Note that an issued licence does not necessarily equate to a service launch. Some channels are subject to delays and others never get off the ground). 1

Yet only 9 have managed to survive, yield profits and continue to remain on air. This network is one of them.

On 21 March 2008, DM Digital Global Television released a Press Statement concerning its proposed plans to expand globally. The statement also issued stated the network was still evaluating launching a TV channel and newspaper outside UK.

The network targets Pakistanis. Other ethnic minority groups that share the viewership include Indians, Bangladeshis and a small section of whites. A breakdown is illustrated below. Inspite of the fact there are channels for the Bangladeshi audience in existence, the viewership (despite the low percentage of Bangladeshi programs on the network) is high. Indians in Manchester and around the North-West region make up the second largest group.

# Graph 1

Source: DM Digital Television Network

According to Farasat Khan, Head of Programming and Production, the network plans to expand to the international broadcast market and also launch a fortnightly newspaper; their first international target for both these project launches being Pakistan. This being so for a number of reasons; the owners and stockholders being of Pakistan origin, the audience catered to largely again Pakistanis living across the world and most importantly – the Chairman’s vision of the Pakistani media market and its abilities.

Since there is a major gap in the international television market for working-class and middle -class Pakistanis, DM sees an opportunity to offer Pakistanis and other ethnic minority audiences a greater variety when it comes to television viewing.

Background

My research and study shows, that from the Brit-Asian channels that launched in UK, none have attempted to make such a move or crossover yet. To outline alternatives and find new opportunities, this report will assess the pros and cons of these potential business ventures.

Financial setbacks and the inability to put a professional or technically-skilled team together have been a major setback for many broadcast media firms in UK.

DM network had low infrastructure costs, at the time of its launch. It received grants from the Pakistan government, private investors (mostly relatives of the Dr L. Malik, the Chairman) and therefore had little problem setting up unlike other organisations.

The network operates on phone-ins to generate money. Shows ranging from music, news to current affairs and even religious shows are based on the live call in model. Below is an illustration of the types of programming and their revenue-generation for 2007.

# Graph 2

Source: DM Digital Television Network

Mr. Khan has indicated about the success and popularity the channel has gained in the last three years, mainly because its interactivity allows the layman to voice their opinions but remains uncertain about how it will survive in Pakistan.

Being able to broadcast in different languages and dialects spoken in Pakistan and also by transmitting live, the network has shown a steady progress in viewership. Its target audience may be over 60% first-generation British-Pakistanis or British-Indians from low-class and poorly-educated families for that matter, but that has proved to be a positive here.

Let us examine Pakistan first. With a population of over 164,762,040 (July 2008 est.) the media in Pakistan is rapidly changing. In the mid1960s there was only 1 broadcast network on air. PTV, the government-controlled and owned network began transmission on 26 November 1964.2
By July 2001 there were 22 channels on air. 3

Today there are over 60 private channels broadcasting across the nation. 4

Channels under the PTV umbrella continue to operate as PSBs, while others are private commercial.

Farhan Kamal, Stepfromt.com reports the Pakistan Television industry is a 10 billion rupee industry and the prospect of new private channels can bring more money into the economy.

Ewa Jasiewicz, a freelance journalist specialising in politics of the Sub-continent says that ‘…given Pakistan’s current political situation and struggle for freedom of speech, the media have experienced a tussle over the last two years. Freedom of speech is not always appreciated. Privately-owned and popular networks like GEO TV and ARY TV were ordered to cease transmission during the 2007 State of Emergency by President Musharraf. ‘

The public broadcaster PTV stopped its current affairs and news based programs. For days the broadcast was replaced by music videos. As the political scenario got better, regular transmission commenced.

Mrs. N Malik, Director of DM Digital TV Network and Head of the News Department believes very firmly that politics in Pakistan is something people cannot live without.

‘The people of Pakistan sleep, eat and breathe politics….’

She also foresees a stronger income pattern if the network broadcasts from there. Khan disagrees with this.

Pakistan already has over three financially and politically strong media giants in existence. According to Malik, DM could be the fourth. But the broadcast quality these networks have is not something this network can match at this given time. Khan also stated the amount of money invested in not enough.

Sharafat Hussain, Retired PTV Executive says the budget these channels have annually is 12 times the existing budget of DM’s entire network.

Giants like ARY TV Network and GEO TV Network have been in existence for over 8 and 6 years respectively.

GEO started out as a newspaper, while ARY originally started out in the retail business and then moved onto to properties and estate developments before investing and launching itself as a broadcaster.

Both these networks however established in Pakistan first and then moved on to International fronts- like USA and UK.

The lesser competitive channels or networks are easily taken over or eventually go bankrupt. The media market for broadcasting in Pakistan is therefore not easy to crack.

Malik feels the network’s popularity here will help it withstand the Pakistani market.

Let us now examine the size of the some of these groups within the population now and some interesting research notes from Ofcom.

• According to Ofcom’s recent study, within UK- Indians make up 22.7%, Pakistanis account for 16.1%, Bangladeshis account for 6.1% 1
• Records show that TV has the highest volume of usage, at a close 17 hours per week. 1
• Sample indicates that Pakistani adults appear to watch more television than other groups. 1
• Nearly half of adults from minority ethnic groups say that watching TV is the media
  activity they would miss the most. 1

And so these reasons have added towards the success of the network in UK.

The network filled a void in the market for these ethnic minority groups, its unique business model based on Live and Interactive programming made it succeed in popularity but not as successful in raising income through phone calls.

Yet since it established in 2005 it has grasped the Asian market, while other channels have set-up and dissolved. Its array of programming has made up for its lack of creativity, poor presentation and production style (due to a lack of funding).

‘Commercial television produces audiences not programmes. [Curran., Seaton., 212:1991]

Channels which launched later did not command the same audience loyalty and reap in profitable results inspite of having state of the art technology and much higher standards of programming. Aapna, Aap, The Family channel were all once seen as potential threats when launching between 2006-2007. The channels, although well hyped and highly creative, went bankrupt within the first 6 months.

John Hawkins(2001) quotes copywriter, Ed McCabe, in his book, The Creative Economy; ‘Creativity is one of the last remaining legal ways of gaining an unfair advantage over the competition.’

I presented this scenario to Daniel Harrisson, who has worked as a News Producer with several Asian organisations. Harrision believes this does not apply to the niche Brit-Asian broadcast market where you are as good as your last show! ‘There is no room for creativity! Everytime I try to be creative…neither the boss nor the audience come to terms with it…it’s like they want fast-food everyday for dinner…and are happy with that output!’

The network has long toyed with the idea of launching a newspaper. Previous press releases show they intended to do so from May 2006. But the existing competition meant the newspaper would not have an easy entry. Production costs would be high. Although a majority of the team from the TV production-side would be utilised; it translated to higher wages. Hiring few but skilled staff for the design department. Printing costs were another concern. The idea was hence discouraged.

Product/Service

DM Digital network now wishes to strength itself in Pakistan. Establishing itself there, it then wants to go on to launch in key cities across the world. Since the network has an existing following in UK with the overseas Asian population, a large percentage being Pakistani, it hopes to achieve the same in the country.

For the audiences in Pakistan it aims to provide some of the already existing programming from its UK studios; thereby cutting some cost of programming and production in Pakistan. The network will also introduce new programming for news and current affairs, which will be focused on the Asian sub-continent mostly and then programming devised for children and new entertainment shows.

But its services don’t stop here.

Under the DM umbrella, they also plan to launch a bilingual newspaper.

Originally, the newspaper idea was foreseen for UK- but later discouraged and instead thought to be better suited and more feasible for Pakistan.

This is not surprising as Ofcom’s Media Literacy Audit (2006) illustrates that in UK television remains the public’s primary source for local news. Reliance on television news over the last ten years has increased over time (by 15 percentage points) just as the dependence on newspapers has declined (by 15 percentage points). So the idea of launching a newspaper for UK was not followed up.

The newspaper for Pakistan will be targeted at the more elite section of the Pakistani community- unlike the TV Network. Or as Mrs Malik believes, ‘those who share a more liberal and modernised way of thinking.’

Newspapers in Pakistan are mostly bought by the upper class. English-based newspapers are bought by a small fraction of this group, but each newspaper could sell for 10 rupees to 15 rupees.

To market and test these new services, DM has already employed a small production team in Pakistan’s capital, Islamabad.

The team are constantly shooting and filing reports, creating small news stories and documentaries and even carrying out celebrity interviews wherever possible.

This has come under the eye of the Pakistani public residing in UK and has received some appreciation for several reasons.

To test its durability and to see if the public will accept the channel in Pakistan, DM has been carrying out several roadshows in Pakistan. By sending some of the network’s popular presenters like Mehboob Khan and Mazhar Bukhari to cover events such as the Independence Day celebrations, or even political rallies, they have attracted attention successfully.

More recently, DM received phenomenal attention during the 2007 assassination attempt on former PM Benazir Bhutto. During this particular rally, team members of the DM Digital were injured. This brought in attention from not only local and international press bodies but also the general public who sympathised with the victims.

The 24 hour coverage of Bhutto’s death, her UK based family’s reactions, her party’s woes and the incidents surrounding the general elections created more interest with the public.

Despite other channels providing the same coverage and time space to these events, DM made an easy entry into the market as it had continuous live programs in which people could call in and express their opinion. Those watching the coverage were keen on seeing more of the channel. The feedback the Pakistan team received was therefore positive and showed this test had been feasible. This also showed that ‘the product inside the package is’ ultimately your ‘audience’. [Curran., Seaton., 212:1991]

Prior to setting up a team at in Islamabad, Pakistan -the network carried out on an online survey as well as a similar survey over the phone.

The online survey reached a larger and more international audience. It was surveyed on the DM Digital TV website for UK as well as Pakistan. Similarly, the survey was also available on the Pakistan Overseas Alliance Forum website.

From the estimated 450 people who took part it was observed that several wanted to see programs based in Punjabi, they also wished the network repeated several of its shows and a large percentage agreed they would like to see the a channel in Pakistan. The response for the newspaper was fairly low.

# Graph 3

Intended Market Environment

‘Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political disputes, low levels of foreign investment, and a costly, ongoing confrontation with neighbouring India.’ 6

Unlike India, the media industry has not flourished as much. While Bollywood and the Indian TV industry have established themselves within the country and abroad, the media in Pakistan has a long way to go.

‘However, since 2001, IMF-approved reforms – most notably, privatization of the banking sector – bolstered by generous foreign assistance and renewed access to global markets, have generated macroeconomic recovery. Pakistan has experienced GDP growth in the 6-8% range in 2004-07, spurred by gains in the industrial and service sectors. Poverty levels have decreased by 10% since 2001, and Islamabad has steadily raised development spending in recent years, including a 52% real increase in the budget allocation for development in FY07. In 2007 the fiscal deficit – a result of chronically low tax collection and increased spending – exceeded Islamabad’s target of 4% of GDP. Inflation remains the top concern among the public, jumping from 7.7% in 2007 to more than 11% during the first few months of 2008, primarily because of rising world commodity prices. The Pakistani rupee has depreciated since the proclamation of emergency rule in November 2007.’ 6

Broadcast

The network in UK has a strong base of older viewers, i.e. first generation working class British-Asians. Many of them still consider the country of their origin as home and consider UK as a second-home. Therefore, to them as research shows, their beliefs and way of thinking still remain traditional and so they prefer watching something more suited for their thoughts and what they deem is suitable for their families viewing. Channels or broadcasts suited for whites are looked down upon.

Pakistan’s population now can be broken up into two. One which is very orthodox, largely uneducated or with low literacy levels and shares similar ideas with first-generation working class British-Asians. The second is fairly smaller but has a modern level of thinking and a more westernised approach. Because of cultural issues and even religious outlooks modernization and westernisation are frowned upon and classed as Un-Islamic.

Keeping the above classifications in mind, DM network will continue to broadcast programming for both. However, a major fraction of the programming will be for the more orthodox type.

Farasat Khan says this is simply because there is a bigger financial gain here. To satisfy the smaller but more westernised group there will be certain hours of the transmission dedicated to their programming likes. The idea in catering for this niche group is again another longshot for the future. Like GEO TV, which has a channel dedicated towards programming for this group, DM would like to try its hand there as well.

Rules & Regulations passed by PEMRA however mean any new entrant must satisfy the following criteria:

Applications for the grant of a licence shall, in the first instance, be short listed by using the following criteria; namely:

1. economic viability;
2. technical competence;
3. financial capability;
4. credibility and track record;
5. extent of Pakistani share in ownership;
6. prospects of technical progress and introduction of new technology;
7. market advancement, such as improved service features or market concepts;
8. contribution to universal service objectives; and
9. contribution to other social and economic development objectives

Source: PEMRA

Print Media

With regards to Print media, the newspaper is targeted at the elite section of society. Predominantly male, upper middle class and between the ages of 25 and 65. Findings conclude they can afford it. They alone can achieve the most satisfactory consumption levels from the end-products and all the more raise enough capital to keep the project running.

Again, with newspapers politics and economical matters sell rather than entertainment or international news for that matter.

Maheen Jaffrey, is a Mass Communications student with the Quid-i-Azam University, Islamabad. She is currently researching as to why the newspaper idea is failing.

In her correspondence via e-mail with me she mentioned that the internet and with it online newspapers are fast gaining popularity over conventional methods such as newspapers.

As an intern with the Dawn newspaper, she said the main stories for guaranteed sales was always either political or that of social upheaval.

When I asked her about the prospect of DM launching a newspaper in Pakistan, she seemed positive.

The print market according to her, ‘could do with a change.’ She also said that if the newspaper catered strictly to the elite, people may buy it more because of its foreign-ness and not because of its reports on local news in Pakistan.

‘International newspapers are scarce; there are now few that can be seen at shops. So I feel there is a space perhaps this newspaper can fill.’

TV Audiences needs

As Nazia Malik, Director of DM Digital Global Network has pointed out. Politics is something the Pakistani audience cannot live without. Farasat Khan cities this as ‘part of the culture’ and daily routine.

I asked Nosheen Aslam, Operation Manager with the network to explain this further.

On a regular day she says Pakistan households have TV’s switched on since breakfast time. ‘It is a family member in many ways.’ Morning breakfast shows are targeted for family viewing. They normally consist of religious, political and news segments along with lighter segments such as TV gossips, celebrity news or even interviews and social awareness issues.

The mid-morning slots are mostly the same but with more news roundups. Most networks like GEO and ARY will force Live newsfeeds in the middle of regular programming just to create a sense of being the first to report it.

The afternoon slots have programming dedicated to women and children. Towards the evening musical shows of sombre nature and political or current affairs show start broadcasting.

DM’s intended programming should offer similar programming but if it is looking for Live calls to be a part of the shows, it needs to work harder in projecting good quality programming.

Being located in Pakistan will certainly place it in a better position in terms of input for programs. They will be able to gain better access to materials, have more guests and quicker access to footage.

While channels based in UK try to provide their local audiences as much news as they can from back home, channels in Pakistan look for international news stories or topics related to the Pakistani communities overseas- it sells!

Since DM is venturing to Pakistan, it can utilise its UK based team to provide regular updates and also carry out shows that would suit the audience viewing in Pakistan. It needs to realise this is a selling point and makes it unique from other networks.

The people of Pakistan would be interested in local Asian news from Manchester or Bradford etc for that matter. It is of news interest to them and ensures higher TRP ratings. The higher ratings translate to more clients.

Market Viability

Broadcast

Since the latter half of 2007, the spending power of the Pakistani economy has gone down. Political and social unrest has created panic not just within the country but on the international front as well. Inflation has reached 25% and as a result spending power is low. 7

‘Politics at present are holding the Pakistan economy hostage.’ 7 says Asia Times Online.

The position of the media has changed. To those from the government and the judicial side, the media is a sworn enemy, to the general public, the media is an ally and a voice. TRP ratings for networks such as ARY, GEO and PTV have gone up. The political scenario- i.e. the state of emergency, Bhutto’s assassination, the PPP’s takeover etc have gripped the nation even more into politics and more media-crazy.

‘Domestic news coverage and public affairs programming… are closely controlled by the government and traditionally have reflected strongly the views of the party in power.’ 8

But television reaches 86 percent of the population as the same website reports, so to survive and create a place for itself, DM Network, needs to pump its content and production side more in order to gain a global appeal and provide what other broadcast networks cannot. It has a dominant position in certain areas, but needs to realise that it will need to adapt to other markets and not just operate with its UK model and poor structure.

Malik has high expectations from the move to Pakistan. Khan is uncertain DM will prove to be a market leader.

There is a plethora of broadcast stations with similar models in Pakistan. He sees a shorter level of expectancy for the network. From the 100% turnover the network is suppose to make in a year from its launch date, he estimates the turnover as less than half.

Malik believes the ‘foreign-element’ in its programming will make it stand out. Khan believes this will not work altogether and more investment in labour needs to be put in.

Print

Research indicates this may not be the best time to launch a newspaper in Pakistan. Although the broadcast medium is enjoying success, it is unfair to state that this maybe the only section of media enjoying it. The online media market has also witnessed growth but yet newspaper subscription has reduced and remains low.

Nida Khan, a student researching with the University of Lahore says from her derived research the least consumed media format is the newspaper.

Her research covered a range of people ranging from university students to professionals.

‘From 1994 to 1997, the total number of daily, monthly, and other publications increased from 3,242 to 4,455 but had dropped to just 945 by 2003’ 9

The prices of manufacturing and putting a newspaper together remain high and so do printing charges. The project would have to turn towards advertising to raise income.

‘Newspapers are heavily dependent on advertising revenue as income. Revenues from display advertising for all media amounted to US $120 million in 1998. Television held the largest share of media advertising revenues at 40 percent, followed by newspapers at 32 percent, magazines at 10 percent, and radio at 3 percent’ 8

Affordability Factor

To cope with costs in Pakistan, DM Digital has been granted further funding of Rs 70 million through Dr Rehman Malik, who is the current acting Interior Minister for Pakistan since 27 March 2008.

Malik was also heavily active with the setting up of the organisation’s initial steps and was at one point the President of DM Digital Global Network.

He has also acquired broadcasting rights for the network in Pakistan and has partially funded a commercial building for the network’s office set-up in Islamabad and another in Faislabad, Pakistan, according to Nazia Malik.

She further adds- because of his political position and ties- he is able to reduce the length of time such procedures could take in Pakistan and obtain licenses and clearances ‘without standing in a que’.

Just as in India, certain media organisations support or are closely linked to political parties. It is therefore not surprising to see organisations from various fields of media linked to political parties. The MQM Party is supported by GEO TV Network. Dr Aamir Liaqat, a presenter with the network was elected by the National Assembly in 2002. He is rumoured to have close links with the MQM Party Head.

Competition

Broadcast

GEO and ARY are the main competitors in the Pakistani broadcast market. They are stronger in terms of programming and quality and also financially. Amongst the most watched and popular- GEO emerges as the market leader (2006-2007) according to PEMRA source Jawad Ali Riaz.

#Graph 4

Source: PEMRA

GEO is by far the strongest producer of programming in Pakistan. It does not operate on a Live broadcast model throughout the day. Most of its programming is pre-recorded and therefore allows room for creativity and growth. There is a stronger sense of management and tasks are carried out in a more systematic manner. It greatly scores over its competition for its up to date news reports, its political talkshows and most of all for representing the largest percentage of the Pakistani population. (GEO Website) It does provide a more westernised type of programming, which has raised scepticism about the network.

The language it mainly chooses to broadcast in is Urdu. They have attempted to broadcast news in English but have experienced lower TRP ratings.

GEO also has been accused in the past of its political bias and anti-Pakistani views. Yasser Akthar, a Manchester/Islamabad based TV Producer and Actor has previously worked with the network before.

‘Sentionalism, is the best word you can use to describe their news stories…they are openly anti-musharaff and take pride in showing it …why should a TV channel project such views?’

I asked him questions related to the launch of the network. David Hazinski, the same man hired to kickstart Aaj Tak TV Network in India was hired by the Jung group to monitor the launch of GEO. Aaj Tak is a highly popular based network, mainly famous for its dramatization of news, but very popular with the masses for this reason.

Hanzinski also worked with the GEO management team and helped put together GEO’s policies. He also assisted in training the staff technically as well as in terms of production work. ‘Other professionals were also recruited from America and UK for a good few months to train the staff…several of our journalists come from a print background….’

His opinion on DM’s entry into the market was interesting.

‘DM Digital is gonna make money in Pakistan…lots of people like me travel from UK to Pakistan several times every year for family or business… I know several of my family members watch DM’s news and politics programmes…the channel is gonna be popular with the audiences in Pakistan.’

Another type of competition comes in the form of online media. GEO and ARY websites are most hit in Pakistan. Their prompt updates for news are widely known says Arif Sheikh, senior controller at ARY TV.

PTV, the country’s national broadcaster operates on a similar TV programming model as other networks, but its lack of creativity and more cultural bureaucratic form has been a major letdown. Government controlled, it has often been denied the freedom of speech other networks enjoy and is so not as popular as the other networks.

DM Network, can add itself to this elite list of TV Networks in Pakistan by cutting back on Live content, buying programming from other sources instead of taxing itself with so much production and outsourcing it.

‘Creative companies have not only decentralized and devolved their operating structures but have also externalized many of the functions that were previously undertaken in-house.’ [Davis., Scase. 142:2000]

Nazia Malik says DM network will certainly have an edge being a network based in UK as its programming caters to the expat Pakistani or those that have family abroad and that’s one plus point it has over ARY. GEO or ARY do not. This unmet need for a bridge between Pakistanis in Pakistan and their relatives living abroad would also be difficult for competitors to copy.

Print Media

The GEO Network is actually the brainchild of the Jung newspaper in Pakistan. The strongest print network at one time, it has since then shifted its focus from print to broadcast.

Predominantly available in Urdu and Punjabi, the Jung newspaper has remained a top player since 1990s. This is because, like its sister broadcast company, it considers itself a ‘representative voice of the people’ and ‘responsive’ towards its readers, keeping it ‘in business in a competitive market’. [Curran., Seaton., 278:1991]

Business Model Viability

DM Digital TV Network operates on a mixed business model in UK. It relies on its income through advertising and sponsorship and also largely on phone-ins from UK and abroad viewers (model no 1). Although this as Nosheen Aslam, Operations Manager claims is not entirely viable for the UK model or the Pakistan model.

One of the possible models DM’s TV station in Pakistan can be based on is the same one described above or a similar model to those networks broadcasting in Pakistan (model no 2).

1. Model no 1:

The model used in UK earns its income through advertising partially and through call-ins during live shows. Calls are charged at 50p or £1 or £1.50 rates. The TV station obtained licenses to charge callers with these numbers in 2005. Because there was a dearth of channels at the time for ethnic minorities, the call-in rates were high. But as time progressed, the market grew more competitive. The emergence of new channels witnessed a drop in phone calls and low revenue. Money raised through advertising witnessed a similar pattern. But the closure of several ethnic minority channels in mid 2007 and political and social unrest in early 2008 brought in changes in the graph.

# Graph 5

Earnings in thousands

Figures provided by DM Digital Network

Nosheen Aslam, Operations Manager believes this is an unsecure model to base even the Pakistan channel on. With the Manchester-based TV station, she is aiming at redirecting the model towards a more advertising-based one. She believes it is safer and more feasible to have programs sponsored and advertisements on air than to rely on the call-ins. She has based her observations on the variation in revenue raised through the calls and factors that determine how successful or unsuccessful a quarter can be in a year. The free to air status of the network is a big attraction for advertisers and is a competitive advantage over other networks.

2. Model No 2:

The majority of TV networks in Pakistan are based on the advertising model. The advertising model has proved successful in generating money in Pakistan. Not only are Pakistani channels based on this model but also foreign-channels or networks broadcasting in Pakistan. Indian channels like Star and Sony have realised this potential. Since Television remains the most trusted medium and most popular media format- networks like Sony and several others are profiting.

As part of my research I had asked for further details from Star TV concerning their role in Pakistan, but was not given a response.

Neha Raghavan, Operations In-Charge at Star One (Delhi, India) commented on Indian channels in Pakistan.

‘I think there no longer remains a ‘cold attitude’ with Indian channels obtaining landing rights in Pakistan… since 2006 many are considering it and opportunities are opening up. PEMRA has relaxed its regulations…and yes many more Indian broadcasters are seeing this in a totally new way…look at filmmaker Mahesh Bhatt even he is bringing his films to Pakistan! We have to realise there is a potential market there just as any other country… they appreciate our programming… our saas-bhahu (Mother-in law and daughter-in law) serials are ever so eagerly watched…even Pakistani channels are now trying to copy them!’

Omer Jafri, Filmmaker and Advert model wrote to me about his experiences working with various private and PSB channels in Pakistan. ‘PSBs don’t really care about making moolah. At least with private channels there is some incentive and driving force…advertising is now a big deal. People normally sit up and look at ads endorsed by big stars…but I can see lots of channels here minting cash because of this…during prime time telecasts…even news at nine you can expect to see 20 to 25 minute ad breaks.’

Nida Khan’s research concerning advertising also pointed out that amongst students especially, celebrity endorsed products were better noticed.

One of the most popular survey responses for an advert you remember was that of our top Pakistani actress Reema in the Lux soap advert.

Opportunities

Basing itself in other countries across the world where the Pakistani community is strong will push the network up in terms of popularity, raising funds and revenue-collection and as the Chairman, Dr Malik hopes- even closer to pushing himself into the political limelight.

In a short interview with Saleem Malik, Director it was revealed that along with the opportunity of growing as a network, the board wished to use the network not just for financial gain, but like several media organisations in Pakistan, for participation in politics within the country.

He also spoke of the importance of the network to stream into another form of media and how it would also help the organisation gain a larger section of the market.

The network has also been viewed as a potential promoter of ‘ Manchester’s growth as the UK’s latest multi-cultural broadcast centre’ according to John Bozza, Arqiva’s Head of Broadcast Sales. 10

It would also satisfy the government led Pakistan Electronic Media Regulatory Authority (PEMRA) in several aspects and encourage more funds from the government’s side, insists Malik.

The PEMRA in its set of rules and regulations states the following for an ideal network-

‘The network would introduce better prospects of technical progress and introduction of new technology. This would in turn help with ‘market advancement’ and allow room for new growth and new services for the broadcast media in Pakistan.

It would also help contribute socially and economically by providing jobs to several media practioners, many of whom who have lost their jobs since the economic slowdown. Islamabad, the capital city, has a high employment rate but its counterpart Faisalabad has suffered greatly since the military regime.

The opportunity to provide a platform for promoting British-Pakistani Dramas and Stage shows would also be a suitable venture according to SKF Entertainment Ltd. If the move to set-up occurs SKF is keen on providing the network with broadcasting rights to its productions.

The small organisation is a Manchester-based Pakistani media producer with a healthy consumer-ship within UK, Pakistan and the Middle East.

Similarly, the network would be able to gain from other such firms interested in collaborating and reaching Pakistan.

UK-based Pakistani artists and bands would again see this as an opportunity to reach audiences back home. Malik believes they would be keen on working with DM to get their line of work promoted. For the network this would mean a consistent flow of income.

A striking opportunity which has forced more people to watch DM is the removal of GEO TV Network from free to air across the world and in Pakistan from cable to satellite. This move has left several Pakistanis with another void in TV programming, especially with the current situation when Pakistanis would like an opportunity to say something.

Nida Khan, a Media student with the University of Lahore has been researching the role television plays in the daily life of middle-class Pakistanis. An estimated 8,000 people took part in her survey. This consisted of people from various walks of life such as university students, their family members, members of the general public, professionals, those in government organisations as well.

Her findings show that:

• News and current affairs shows are the most popular along with Bollywood films.
• News was most watched during the 2008 Pakistan elections.
• TV is the most trusted media, followed by the internet, radio and then newspaper.
• Amongst students- the most used media format was the internet.
• For TV- Indian Entertainment channels were most popular. Star TV India and Sony entertainment being the top two.
• 64% of the people who took part in the survey said newspapers in Pakistan were not affordable.
• 49% said they would pay to call up on their favourite TV shows.

Keeping all these findings in mind, it therefore shows it is a favourable time in the market to launch a TV station. An interactive model with live call-ins during shows would be feasible according to this report.

Management Model Viability

Kanchan Thakur, an ex-employee of the network believes the organisation suffers greatly because of its top-level executives discouraging creativity and internal politics. A combination of these two create a mismanaged organisation with poor work culture.

Davis and Scase (2001), pinpoint ‘a lack of flexibility and over-control’ are dangers which should not be left ignored.

‘The company shows signs of very weak management. Several departments are mismanaged and the staffs are treated poorly. Those with university qualifications are paid less and given more jobs to do. While those who have worked within the Pakistani media- but have no education, a lack of creativity and sense of programming are treated and paid better. We would never treat are staff so disrespectfully in Mumbai. Our work is never recognised and nor are our achievements. Us girls are asked to sit at the reception and monitor and greet guests…in the beginning they would ask us to make tea for them or assist them…we were not encouraged to work on the technical side inspite of having a degree! ‘

To succeed in this new venture, DM Network should learn to manage diversity and do so ‘without resorting to ethnocentricity and stereotyping.’

Roger Cartwright (2002) explains ‘how understanding each worker’ can assure best results in his book, Managing Diversity.

Cartwright (2002) further dabbles on the research used by Fredrick Herzberg. Published in 1962, Hertzberg’s research suggests ‘insufficient money’ was a ‘demotivator’ but so were ‘recognition’ and ‘advancement’

Cartwright(2002) in his own findings indicates of a cycle into which most young workers fall. Young people starting out on a new job ‘may well live at home, or in cheap rented accommodation, and while they will be expected to contribute to household expenses, much of their disposable income will be spent on fashion items and personal assets.’

This cycle is therefore referred to as ‘Earn and Spend’. As they move towards settling down, they enter another cycle termed as ‘Earn and Save’.

But it is not feasible here.

Thakur worked at the organisation for 2 years. She was promised an increase in her salary 3 months from her joining date. She never received a wage-increase for the 2 year period.

‘My salary was always overdue…I had to borrow money from friends…it was annoying!’ says Thakur.

Several organisations operate keeping cultural issues in mind. In India however, many organisations operate on a western model. In Pakistan and within the community, as yet there are several cultural inhibitions. To many, it is frowned upon to see women of a household working and associating with male colleagues at the workplace. It is also common for workplaces to be home to ‘high-masculinity societies’ where the dominant ‘ethos is that one lives in other to work’. [Brown. 45:1998]

DM needs to examine this more closely. To adopt a global perspective and to succeed globally it needs to ensure it can treat its employees fairly all over and moreover project that image to its worldwide audiences.

‘Organisational culture is a reflection of the way an organisation operates and it often reflects the core values of the organisation.’ [Brown. 43:1998]

Raheel Anjum, Operations Director believes the network has lost some of its best workforce because of its working environment. He deems this as ‘unhealthy’ . ‘Why is our sales team constantly changing? Coz every time we hire the right staff- they are put off by the badly managed environment and lack of respect they get. They leave…this is getting us such a bad name as an employer. It’s a vicious cycle.’

From all of this Anjum proposes DM will have to create a better environment with higher standards than they have here. Job roles are not defined clearly.

‘In these circumstances, the organisation operates as a constellation of projects and processes with loosely defined parameters. [David., Scase 51:2002]

Anjum believes the scene in Pakistan is not as Farasat Khan makes it out to be.

‘Although we are considering setting up base in Pakistan…even there things are changing. Staff sizes are shrinking, but also- simultaneously they are becoming more and more multi-skilled and technically-stronger. GEO and ARY TV Networks have a similar pattern of programming, but to cope with time strains and the pressure of Live TV they often outsource their post-production work.’

Yasir Riaz, Director Branding and Strategy, GEO TV insists the team at GEO is highly-motivated.

‘We are a people’s organization…as we always say. We know our team and train and develop their skills. We work in an environment of transparency and accessibility and strive to create a feeling of security and bondage between staff.’

The role of women is also not defined clearly within these networks as well. Women seem to be hired mainly as presenters or in administrative roles. Very few women work in the production wing and even fewer in post-production.

While this may be the case in Pakistan, other countries do not share this work culture. Even India has more jobs for women.

Perhaps the network should consider looking into this matter and improving on.

Other common management issues that I heard of while speaking to members of staff were those connected with the board. On regular basis, it has happened that members of the staff have had work interfered with by relatives or family members of the Chairman.

If they refuse or put of the work, they are threathened to lose their jobs. This is a common case scenario with most Asian TV networks in UK and Pakistan.

From the existing team that files reports in Pakistan for beaming in UK, Farasat Khan says many of them work overtime, often putting in more than 15 hours a day. They live and sleep at the studios.

This unhealthy work culture is also unethical and encourages wrong practices. The team in UK is often told off by the management and cited examples of the overworked team in Pakistan.

Zia Ul-Haq worked formerly for PTV Global before joining DM Digital Global Network in 2005. He has worked for the network in Pakistan as well.

From his interview with me, I have translated a few of his most common issues with his job.

He was hired as a Sound Engineer but since 2006 has been working as a TV producer. While in Pakistan, he was asked to handle tasks such as budgeting, camera work, reporting and even editing. Most of it he says he learnt on this job. Orders would be passed on to him from the Chairman directly. So most of the time the management team had no idea as to where or what he was shooting. He also says the family of the Chairman Dr Liaqat Malik would hound him constantly to do tasks such as film family functions, edit them and other such favours. When he would refuse the bosses would be displeased and he would feel demotivated.

Zia has over 20 years of TV experience. Though his skills are outdated, he is constantly updating himself and familiarising himself with new technologies. He says he is not as fast and efficient as before- but he makes the effort.

He says he puts up with the job only because of his wife and children whom he is the only bread winner for.

‘Daily…they shout and backbite about each other…there are a few kids who want to improve the environment we have here…but it will not change…the media in Pakistan is filled with internal politics.’

I brought this case up in front of Nosheen Aslam, Operations Manager. She insists the hiring of correct people and those that have a clear understanding is needed. We need to hire more people in production who are multi-tasked and quick with new technology.

‘Ideally in Pakistan, students or recent graduates would be perfect for roles in production. They are keen to learn and get insights. Plus they are faster in the field’ says Aslam.

Sales and Marketing Strategy

Given the network’s track record in sales and marketing within the UK, the network has not been fortunate in raising revenue. Failed marketing strategies and poor approaches and mishandling of clients has created a bad name for the network. These are things the network should strongly avoid a repetition off.

The Pakistan industry is very different from the Brit-Asian market. There is more scope for revenue raising and advertising is making money for TV stations.

Brit-Asian organisations target small shops, locally based Asian firms and offer them on air time plus adverts shoot and edited at very cheap prices. This method of practice is not feasible nor is it suitable for Pakistan. Advert rates need to be charged at market rates. The cheaper deals may certainly attract lots of customers but as a result it leads to a flooding of adverts and low standards are created within the industry.

GEO and ARY have marketing campaigns which are seasonal and very Islamic orientated. This works with the psychology of its viewers and it turn goes down better with its clientele list. Clients from UK and USA pay heavy sums to advertise with the networks during Eid festivals, the Holy month of Ramadan and Muharram.

Rizwan Yousuf, is a former TV Journalist with ARY and GEO TV. He also worked with Prime TV as a Production Controller. He is currently researching TV patterns within the Asian sub-continent for a book.

In an interview with him, he told me of how networks like ARY often have TV presenters perform dual tasks. They, according to him are ‘appealing’ and also can offer more revenue generation to the company. Yet this method is looked down upon by Farasat Khan, he says that this is not feasible and often unethical. ‘When a presenter works in sales and brings on clients…the clients are often his and not the TV station’s. When they fall out with the management of the station and move on elsewhere their client list goes with them. Just look at top presenters like Nadia Khan and Veena Malik…see there is lots of politics involved in television.’

The network should try initial marketing exercises to help build the team’s confidence and repport.

Ideally they should have one major project which could be a big budget live musical show including celebrities from Film & Music Industry from Pakistan & India. This event will be sponsored so will cover its own cost. Main guests in this show will be the people from the business community and politicians. This will help us in starting a good relationship with them. DM Digital will have to keep a small team of full time marketing personal and can provide work for the freelancers on the commission basis.

For the main target audience DM Digital will also be associating and covering religious events. This will be a hit in Pakistan.

Management and Personnel

The network has in the past hired several people for its Manchester office. But the staff hired always had cashes with the production team.

The management personnel also seemed to have a negative effect with the production team and often got involved in other decisions which did not concern them. This complicated the network’s running and who had the authority to do what was often put into question. As a result, the Chairman was often asked to make final decisions, for even the smallest of problems to be resolved.

This however led to:

1. Further divided workforces. It was ‘us vs them’ syndrome according to former employee Kanchan Thakur.
2. The Chairman now makes all of the decisions, he does not consult anyone nor does he keep in mind what the audience wants. It’s his favourite presenters who cover the main shows and get access to prime time slots. This often proves unpopular and as a result has encouraged favouritism.

This will not be feasible in the Pakistan market where competition is building up every minute. To control such situations and resolve issues as quickly and peacefully as possible, the network needs to hire competent staff and ensure it does not overhire staff in this department. Overhiring would lead to more confusion and chaos.

Ideally for the initial set-up they require two managers to handle the station. The managers would have to hold the following qualifications:

1. The qualified candidate would need to hold a Bachelors degree in Media and a masters’ degree specialising in Media Management. Besides this the candidate would need to have an understanding of the Pakistani media market and similar experience in the broadcast field.
2. Findings in DM’s case show that hiring wrong people in the past has proved expensive for the network. Often people too inexperienced or fresh out of university have strategized the wrong moves and created several clashes with other departments.
3. Hiring over experienced people can also work out negatively. The network is growing and needs new ideas and not those of old rigid ideologies.

Besides this they will need to hire staff in production: ideally the perfect candidates for this would students or fresh graduates from university.

Few technically strong and experienced people should be hired to look after the team and continually train them.

Financial Assessment

The total amount of investment required for the initial set-up year amounts to an estimated £950,000. Main investments and expenses are of equipment, wages, satellite and studio sets and props for shows. The total amount expected to be spent in the first year will be £941,500, with the remainder being kept aside for emergencies.

Investment done in Pakistan will be done directly from DM Digital Network and bit of funding from the private investors, like Rehman Malik.

As the company already has presence in Pakistan and also has a strong following in the UK, it will not face as many problems in getting advertisements and sponsorships. It also won’t face difficulties in relation with the call-ins as most of the viewers who call in the shows broadcasted from the UK will divert to the channel in Pakistan.

In Pakistan advertising and sponsorship rates are very high of about £500 per 30 sec advert on peak time in comparison with the UK’s Asian Market where per 30 sec advert costs is just under £10. But the network will have to charge less than its competitors initially to get a market entry. Earnings from the call-ins won’t be as much as in the UK as the premium calls are charged at 14Rs/min which is less the 11pence /min. With the advertising rate of estimated £300 per 30 sec spot and even without earning lots from the call-ins network can easily breakeven by the end second quarter of its launch and can earn up to £1.8 Millions making 100% profit for the first year as shown in the graph below.

# Graph 6

Risk Factors

Internal

Marketing:

The network will need to create a good marketing and sales team, as many channels have suffered because of this. Channels like Channel Punjab have suffered several setbacks and as of Augsut 2008, reports suggest the channel will be going into liquidation since they have not able to generate any revenue from their advert sales even with high production quality and popular programming.

Managerial:

Most of the people working in DM Digital in UK are not satisfied with the kind of treatment they receive from the management side. They say that they are not at all motivated and are over burdened with lots of work. But they still are working there because most of them are immigrants from Pakistan on work permits and getting work permit transferred is very difficult. So making them feel even more trapped.

If the network continues to treat its employees like this in Pakistan most of its team will leave immediately and join the competitors. The market name the network will receive will again be unfavourable for its development in the long run.

External

Pakistan’s media industry has always been under intense pressure by the ruling government. Looking at the current and previous political situation of Pakistan media has never been given freedom of speech by any of the ruling political parties or even by the Military dictators.

Channels like Geo and ARY were shutdown as the government was deeply threatened by their programs. They were allowed back on air only when their main political shows were shut down and with even more new rules on programming for such shows. Defamation of President Pervez Musharraf was the major problem the government faced.

Pakistan’s Population, as said earlier, is distributed in two categories -one is very religious orthodox and other is modern with western thoughts. The network has already been in trouble with a large section of religious orthodox people on broadcasting a documentary which went against their religious thoughts.

Qtv, one of the Islamic channels run by the ARY group was forced to close down because one of their presenters said something which was against the religion.

The channel will need to therefore screen everything that is being said and broadcasted on air to comply with rules and regulations of PEMRA.

Results and Conclusions

Judging by the above given research findings, I believe it is feasible for the network to go ahead with its plans to launch a TV station in Pakistan based on a similar model as to the UK one.

Revenue generated by advertising proves to be more promising in Pakistan. With the connections the network has in the government and the criteria it satisfies for PEMRA, it would be easy for the firm to launch.

Although there are a significant number of new entrants in the Pakistan broadcast market that looks like they could be potential threats to DM Digital, none of them share the advantages the network does.

It has established itself as an overseas broadcaster, people know of it and watch it…this launch could now bring it to a new level and help expand its parent company along with helping Pakistani broadcast media grow.

Journalist Rizwan Wahab hopes DM Digital will help break the monopolies of GEO TV and ARY TV in certain regions across Pakistan.

In Islamabad, Lahore…all people want to believe is GEO. They do make good news… but so many of us journalists question their methods of dramatization. There are more ethical networks around…why then I ask do they not have such a viewership?’

Zaki Sarwadhy, a former employee with Dawn newspaper shares a similar opinion.

‘Lots of our media is just here to make the government or some xyz minister happy and make money…and go home. What one reads in the newspaper or see on their TV set is a different case altogether…I have seen such practices happen…sadly I believe this is a cultural problem.’

Sarwadhy expanded on his comment by stating that there is a huge amount of corruption in the market. From acquiring licenses to obtaining exclusive footage … ‘it’s all rigged!’

Wahab and Sarwadhy both hope DM’s network will pave the way for a more just broadcast market and breakdown monopolies.

In terms of print media, I believe this project should be reassessed once the market is more stable. With the TV station project, the future looks promising, but with the newspaper- it looks like the staff and team would be over-burdened if this project began simultaneously. Chances for again mismanaging a team or creating low or no incentive drives amongst staff is likely to happen. The staffs need to first accommodate themselves with the TV station project. I believe the feasibility of the newspaper should be partially judged on how successful the TV station turns out to be.

Perhaps by then there will be a different market altogether or a better understanding of the online market, which seems more promising in Pakistan.

The other factors the network should work on include improving the work culture and encouraging creativity. Since the other networks in Pakistan are well-known for churning out the latter, (although many again criticise this and say it is merely apeing the West or Indian networks) DM will have to evolve strategies to combat this.

It would be a good approach if members of the UK team assisted in the initial training and development of the Pakistan TV station. This would help the new team gain a better understanding of the project and also familiarise them with the entire DM process. Yet I believe the members of the team who go to Pakistan should be those that motivate the team there and not those who will demotivate them and further lead to a poor work culture.

In terms of programming, the network would benefit definitely by focusing on more political shows and current affairs shows. News is also another popular genre with the audiences that DM is targeting. It should not however alien the other age groups.

Nor should the network be totally dependent on pushing the Live program or call in approaches altogether. There should be a fair share of both to allow room for better productivity with the staff and also not have a constant pressure on phone-ins.

Financially, the network will be able to achieve a lot. Care and consideration should be taken into hiring staff for sales and marketing. The staff should be given targets, conduct regular market analysis and work on a more systematic approach.

The network should now learn from its failings in the UK and work towards a more global approach. Scope for financial gain and making a bigger mark in the international market are very possible. The arrival or market entry time is perfect for DM’s TV project and my research shows a very strong go-ahead sign for this launch. With the newspaper launch, again, this is something which could be a potential trendsetter in the market, but I believe now is not the right time for it and investing in it would lead to a lack of funds, over working of staff and create a lot of mismanagement. Overall, DM’s Chairman’s motives to become a media baron are not highly sketched. They require time and the avoidance of repetitive mistakes. The launch in Pakistan, could perhaps pave the launch for further TV stations across the Asian continent and then other parts of the world.

References

Internet

1. Ofcom., 2 Communications Market Special Report 2007. [internet]. Ofcom (Published 2007)
   Available at: http://www.ofcom.org.uk/research/cm/cm06/cmr06_print/tv.pdf [Accessed 17 June 2008]
2. http://ptv.com.pk/aboutus-history.asp [Accessed 18 July 2008]
3. http://www.pressreference.com/No-Sa/Pakistan.html [Accessed 18 July 2008]
4. http://www.stepfront.com/pakistan/what-pakistani-tv-channels-can-learn-from-google/ [Accessed 18 July 2008]
5. Ofcom., Media Literacy Audit: Report on media literacy amongst adults from minority ethnic groups 2006 [internet]. Ofcom (Published 2006) Available at: http://www.ofcom.org.uk/advice/media_literacy/medlitpub/medlitpubrss/minority/minority.pdf [Accessed 17 June 2008]
6. https://www.cia.gov/library/publications/the-world-factbook/geos/pk.html#Econ [Accessed on 15 July 2008]
7. http://economictimes.indiatimes.com/Swaminathan_S_Anklesaria_Aiyar/ We_dont_import_inflation_from_Mars_/articleshow