The new digital gatekeepers could irreversibly change Kenyan politics
What you need to know:
- The more your viewers, the higher the rate charged per second by broadcasters. Prime-time charges per second are quite lucrative and keep the broadcasters profitable and in business.
- The plan by the government through the regulator was that broadcasters would continue with content production while leasing channels from other players, the digital distributors.
- However, one does not need a PhD to wonder whether PANG, though "Chinese-owned", may have some local interest.
We have covered digital migration to the point of exhaustion, including the technical details, legal details, and freedom-of-media concerns.
So, with so much coverage on the issue, why are we stuck on the question of digital migration?
The Supreme Court and the battery of contesting lawyers have done their bit and so have the engineers and the technical analysts.
The broadcasters, the regulator, the entrepreneurs, the government and the politicians have also weighed it on the matter — from their respective perspectives.
Perhaps we need to look at the matter holistically rather than from the silo approach we are all used to.
How do all these interest groups inter-relate? In other words, what is the value chain or the ecosystem behind digital migration? Unravelling this could help us better understand the key actors, their roles and benefits in the new digital ecosystem.
The tables at the end of the blog give a holistic picture of the actors involved in digital migration, their roles, threats and opportunities.
In the analogue ecosystem, the broadcasters controlled the full value chain, which includes content production and the distribution channel to reach their viewers.
The government’s role, through the regulator, was simply to allocate and assign the broadcasters the frequencies to transmit their content to viewers.
Broadcasters made money through advertising revenues. The more your viewers, the higher the rate charged per second by broadcasters. Prime-time charges per second are quite lucrative and keep the broadcasters profitable and in business.
Government money would come in through licensing fees charged for the frequencies as well as tax levied on the broadcasting entity.
The government, the broadcasters, the advertisers and the viewers were all happy with the status quo until now, when digital migration is being implemented in order to conform to global trends and requirements.
ONE-MAN TV STATION
What changes does the digital migration bring to the above analogue ecosystem?
The plan by the government, through the regulator, was that broadcasters would continue with content production while leasing channels from other players, the digital distributors.
On the face of it, nothing is wrong with this approach since it allows for efficient use of frequency spectrum. However, there are two “little facts" that have stalled the whole process and led to many Kenyans staring at blank screens.
The first was the assumption that the incumbent broadcasters would easily formalise agreements with the new digital broadcast distributors, SIGNET and PANG, who would carry their content to the viewers.
For some reasons, this has not happened and the leading broadcasters seem to have deliberately opted not to explore this route, preferring instead to build their own digital distribution channels. Whereas copyright issues have been touted around as one of the main reasons, competition could be the “silent other”.
Imagine a world where the three leading broadcasters are reduced to being clients of the digital distributors, SIGNET and PANG, on equal footing with some “one-man” digital content creators operating from, say, Bungoma, Lamu or the blogosphere.
If his content is timely, reliable and consistent, the “one-man producer” can easily gain viewers and eventually advertisers in equal measure — perhaps at the expense of the leading broadcasters.
Indeed, the leading broadcasters have every right to protect their turf. However, it is not clear if their strategy is sustainable, because it is easy for the regulator to argue that their role is to introduce competition and ensure a level playing field for all broadcasters, which is potentially what digital broadcasting can do.
LOCAL PANG CONNECTION
This brings us to the second “little fact", which incidentally is more important, despite the failure of the leading broadcasters to bring it up in the public debate.
The two designated national digital distributors expected to transmit the content do not exactly have a history of being independent.
SIGNET is owned by KBC, the national broadcaster, whose reporting structure is of course public and leads straight back to the government. PANG on the other hand is publicly known as “Chinese-owned”.
However, one does not need a PhD to wonder whether PANG, though "Chinese-owned", may have some local interest.
In short, by June 2015, the whole of the Kenyan broadcasting sector, will be under two digital network distributors who can be judged to be friendly to the incumbent government. This is not necessarily a bad thing, but it could take quite a different dimension as we approach the next general election in 2017.
This second fact is what Kenyans can relate to, and is perhaps what can give the leading broadcasters a small chance of becoming the third national digital distributor.
Forcefully procuring their own set-top boxes in order to indirectly get the digital distributor licence may simply be seen as anti-competitive behaviour and would gain little public support.
Table 1: Analogue ecosystem
ANALOGUE ECOSYSTEM | ||
Actor | Role | Opportunity |
Government regulator | Allocate frequencies | Charge for frequency Tax broadcasters |
Three leading broadcasters | Produce content Own distribution networks | High cost of distribution network leads to market concentration (Dominant Players) |
Advertisers | Pay for advertisements | Dominant Players make reaching mass markets easy |
Consumers | View content | Information or entertainment |
PANG and SIGNET | NONE | NONE |
Table 2: Digital Ecosystem
DIGITAL ECOSYSTEM | |||
Actor | Role | Opportunity | Threat |
Government regulator | Allocate frequencies | Charge for frequency and tax broadcasters More control through PANG or SIGNET | Leading broadcasters decline to transmit via SIGNET or PANG |
Three leading broadcasters | Produce content but lose distribution networks (Lease from SIGNET or PANG) | Exclusive focus on content production Outsourced costs of maintaining distribution network | Loss of Dominant position as new players enter market Increased shutdown risk from pro-government distributors |
Advertisers | Pay for advertisements | More broadcasters mean lower marketing costs | Need to wait for disrupted market to settle before identifying leading players |
Consumers | View content | More diverse choices of content | Increased chances of “gutter” broadcasters |
PANG and SIGNET | Digital Signal Distributors | Charge all broadcasters transmission fees | New gate-keeper of transmission |