TV stations choke up losses in analogue switch off

By Jackson Okoth

The media industry is still busy with calculators and a note pad, counting its losses after the recent disruption and frequent switch offs of the analogue TV transmission.

On the list of most affected slots is prime time, between 6.30pm and 9.30pm, when viewership is at its peak. There are also numerous end-year gospel crusades, sponsorships and documentaries that target Christmas season audiences.

“The three top TV stations could have each lost between Sh9-14 million per day due to disruption and recent shut down in analogue transmission,” said Lenny Nganga, director-Saracen Media Group Limited.

It is estimated when the analogue TV switch off finally happens, TV audiences will drop significantly eroding revenues for broadcasting stations and cut backs from advertisers. “The cost of set top boxes is still prohibitive, especially for those in the rural areas and urban dwellers who reside mostly in informal settlements. We expect TV audiences in the rural areas to drop by between 45-55 per cent,” said Nganga.

expectation

The size of TV audiences in Nairobi is expected to drop between 25-30 per cent due to the analogue switch off and it will take at least six months before the situation normalises.

The Court of Appeal has issued a 45-day injunction for suspension of the execution of the judgment Justice Majanja issued on December 23, which culminated in the switch-off of the three mainstream television broadcasters in the country. President of the Court of Appeal Justice Kihara Kariuki led the three-judge bench (including Alnashir Visram and Hannah Okwengu) in ordering the CCK to allow the three media houses to continue with their analogue television broadcasting.

“This is an opportunity for the media industry to have dialogue with the Government on the digital migration issue. The media can also use this chance to improve its digital migration prepared,” said Kiprono Kittony-Chairman-Media Owners Association.

Industry sources disclose that the three TV stations affected by recent analogue shutdown could have lost between Sh2 million and She 3 million. This loss translates to between Sh80 million and Sh130 million per month, if the analogue shut down becomes permanent. Recent disruptions has forced TV stations to ‘ make good’ their contracts with advertisers, some asking for credit notes, especially multinational companies.

Trouble for the three major TV stations begun after the high court ruling on 23rd December, 2013 that saw them switch off their signal in protest, forcing the ICT cabinet secretary Fred Matiangi to hold a press conference at his Telkom Kenya building offices the next day.

The affected broadcasters resumed their transmission on that 24th December and 25th before switching off again at midnight of December 26th, 2013. Normal services on the analogue transmission resumed at around 4.30pm on 27th after the court of appeal gave orders for a 45 days injunction.

Data from Ipos Synovate, a global research firm shows that a weekly urban television viewer watches an average of 3.3 different television stations compared to the rural counterpart who watch an average of 2.8 television stations.

But these figures could change with the analogue switch off.“ The concern we have is that substandard set top boxes, could be finding their way into this market.

There is need for consumer awareness to safeguard against sellers of counterfeits and sub-standard units,” said William Ojonyo, Managing Director-Keynote Logistics Limited. There are two developments which are bound to shape the media scene in Kenya; the digital migration of television broadcasting and the devolution of power and regional governments.

“One of the key challenges that media owners have faced is the requirement to provide content as well as increase their geographical footprint. With the digital migration of television broadcasting, the role of signal distribution will be outsourced, leaving media owners to focus on content and not on ensuring the optimum geographical reach of their signal,” said Tom Mzungu- Audience Research Manager – Ipsos Synovate

For households to access digital Free to Air television, they will need to have a set-top box. This might affect viewership, particularly during the initial phases of the transition, where although surveys have indicated that there has been a growth in affluence amongst the population, the level of compliance amongst households will vary given the cost of the set-top boxes.

 Nevertheless, this may only be a temporary situation; viewership is expected to pick up overtime.

Digital television guarantees better picture and sound quality which has often been sighted by audiences as a key physical barrier to their choice of television station to watch.