Drama equals entertainment: From 2009 onwards, dramas such as Humsafar, Maat and Meri Ladli captured audiences’ attention and imagination.

According to the Aurora Fact File for FY 2013-14 (see page 120 for more), the popular entertainment channels (ARY Digital, Hum TV, Geo Entertainment, PTV, Urdu1, Express Entertainment, ARY Zindagi, Geo Kahani, Hum Sitaray, ATV, A Plus and TVOne) accounted for 49.5% (Rs 15.694) of total ad spend on television. In 2012-13, the same channels (with the exception of ARY Zindagi which was launched in April 2014), accounted for 42% of the spend. In a similar vein, Medialogic’s TV viewership figures over the last two fiscal years (see page 127 for more) show a marked increase in the market size of entertainment channels – from 13.6 to 25.5% in FY 2012-13 and from 25.5% to 27% in FY 2013-14.

Even without this statistical evidence, there is ample visual proof that the entertainment genre is booming, given that there is a lot ‘more’ of everything: channels, production houses, programming, dramas (roughly 15 a week on one channel alone) and new formats (reality shows, franchised shows and game shows). This makes for an intensely competitive media environment where bitter rivalries, talent snatching and an extreme focus on garnering ratings are the source of much of the questionable content on entertainment channels, the kind that makes you shake your head and go, ‘who watches that’ or ‘what were they thinking’.

Until a few years ago, Pakistani audiences turned to the news for entertainment. This was primarily because seeing politicians drilled on the media and watching talk shows that were the verbal equivalent of a WWF wrestling match was a fairly novel experience for a society that had lived through martial law and media repression for much of its existence, and also because local entertainment channels simply did not produce content that was good enough to hook audiences. Yet in the space of five or so years, the entertainment channels have managed to turn the situation around, diverting both audiences and ad spend from the news channels in particular. Most industry insiders suggest that the change began in 2009.

Getting the show on the road

In 2007, Medialogic introduced the Peoplemeters ratings in Pakistan, changing the face of media planning and content creation on TV. Channels and media planners who had once relied on the Gallup Diary and their gut feel finally had real data to sink their teeth into – and not all of it was good news. Although Peoplemeters didn’t cover Indian channels such as Star Plus, Sony and Colors, the realisation began to set in that this is where the ‘eyeballs’ were, despite (or perhaps because of) the fact that local entertainment aped Indian shows and soap operas.

Entertainment being synonymous with drama, channels such as Hum and ARY made a slow move towards reviving what used to be a great Pakistani talent, and hits such as Mere Paas Paas and Man-o-Salwa followed. This sea change, however, took place from 2009 onwards with hit dramas such as Meri Zaat Zarra-e-Benishan, Meri Laadli, Maat, Daastan and the much feted Humsafar capturing audience attention and imagination. A number of factors were responsible for this shift, not least of which being a declining appetite for news (although this genre witnesses a resurgence every time a major event takes place) and current affairs talk shows. Parallel to this, the quality of Indian programming and the local fascination with it also declined. Local channels took advantage of this and with the help of large production houses such as 7th Sky Entertainment (established in 2007), Moomal Productions (established in 1996 and now called MD Productions), A&B Entertainment (established in 2009) and Six Sigma Entertainment (established in 2010), started producing quality content. PEMRA’s ban on the Indian channels in 2012 was the final nail in the coffin, giving local entertainment the impetus to surge forward and such was the demand for drama that production houses such as A&B started doing 55 to 60 productions a year – previously production houses had worked on a mere three to four dramas annually.

The Turkish drama invasion of 2013, heralded by Ishq-e-Mamnoon, wrought further changes. So riveted were Pakistani audiences by the beautiful people and settings of these dramas that channels started investing more and more in this area to the detriment of local productions. The production houses banded together under the aegis of the United Producers Association (UPA) and launched a protest against what they considered to be a threat to their business. Bowing to this pressure, the government eventually levied a Rs 100,000 per episode tax on all foreign content shown on local channels. Although this has not discouraged TV channels from airing Turkish content, these dramas no longer get the ratings they did at the height of their popularity in 2012 and 2013. Yet, in one fell swoop, they managed to transform the entertainment landscape in a variety of ways.

From Turkey with love

Despite the success of local dramas from 2009 onwards, Pakistani producers were fairly complacent in that the productions were carried out with little thought to efficiency and ROI, and if the channels are to be believed, vast sums of money were charged simply because these dramas were shot in foreign locations (even though the script did not require such an expenditure). However, with 90% of an entertainment channel’s FPC made up of outsourced content, the production companies were in a good position to dictate terms. Thus from the production houses’ point of view, the influx of the Turkish dramas was a bid by the channels to break their stronghold, although the channels maintain that it was merely a trend which they had to follow to satisfy local audiences.

Until a few years ago, Pakistani audiences turned to the news for entertainment. Yet in the space of five or so years, the entertainment channels have managed to turn the situation around, diverting both audiences and ad spend from the news channels in particular. Most industry insiders suggest that the change began in 2009.

Whatever the case, the threat posed by the entry of Turkish content forced local producers to cuts costs, create greater efficiencies and invest in better directors and scriptwriters (many Urdu digest writers were introduced to scripting by the channels and production companies, thus bringing about a significant change in storylines). Additionally, as Turkish content was shot on state-of-the-art equipment, they made TV screens look better than ever before. As a result, local channels and production houses invested in new equipment which has helped to transform Pakistani TV screens, giving local dramas international appeal (and the TV channels are now capitalising on this by reselling already aired dramas to Zee Zindagi, a channel which airs 100% Pakistani content in India).

According to Asif Raza Mir, COO, Geo Entertainment Media Holding (and one of the co-founders of A&B Productions), the ‘Turkish episode’ also created space for smaller production houses in Pakistan. A&B, as the largest production house in Pakistan, was closely allied with ARY Digital (it also produced content for other channels) and when Turkish content was first introduced, it became a vociferous opponent of foreign content, leading to a situation where “the channels became our enemies… and we took a financial beating.”

Shortly thereafter, in 2013, Geo (in a bid to break the A&B/ARY alliance, which had made the latter channel number one in the ratings) entered into a partnership with A&B whereby the channel would have first dibs on the production house’s content while the two partners (Mir and Babar Javed) would have a stake in Geo Entertainment. Mir says the offer was the “safest bet” for A&B’s survival. However, the move created a vacuum in the industry (especially for ARY), which is being filled by newer and significantly smaller production houses.

Jerjees Seja, CEO, ARY Digital Network, explains that in the wake of A&B’s defection, “instead of feeling sorry for ourselves, we went into the market and started working with new production companies (including Six Sigma, Big Bang Productions, iDream and Larachi among others). These new people are growing with us.”

The race for ratings

According to Ahmer Khan, Head of Programming & Productions, Paragon Productions (closely allied with Urdu1), now that entertainment channels have achieved a level of success with local content, “the challenge is to keep the viewer hooked”, in order to secure the all-important ratings that appear to determine every decision undertaken by the channels and their content producers. Yet, fulfilling this demand requires a fine balance in terms of quantity, diversity and quality.

One of the big challenges is that despite the presence of four large production houses, several smaller ones and more individual producers (or briefcase operators as they are called) than you can count, the content demands of the entertainment channels are still so massive that they are not being completely fulfilled. Turkish and Indian content (which still manages to generate ratings) are being used as ‘fillers’ (PEMRA’s rules state that local channels can air only 10% international content of which only six percent can be Indian shows, although most channels are blatantly disregarding these guidelines). Channels are also producing game shows (ARY’s Jeeto Pakistan managed to secure the highest ratings when it was aired), internationally franchised shows (two new shows – The Voice and Pakistan’s Got Talent – are expected in 2015) and the ubiquitous morning shows where a great turnover of talent takes place in the quest for better ratings.

The bulk of an entertainment channel’s FPC, however, is based on dramas (Duraid Siddiqui, CEO, Hum Network says 90% of the channel’s programmes are dramas), and despite great successes in this area, the general consensus is that many of the storylines are similar or exactly the same (and regressive), leading audiences to feel the dramas they see on different channels are essentially a variation on the same theme.

Moomal Shunaid, CEO, Moomal Entertainment, explains the conundrum saying. “The channels demand that we give them ratings-based products but these products are all the same, with a sad woman being mistreated, because this is apparently what audiences like.”

In the industry, there is a strong sense that once a drama or any other kind of show manages to garner high ratings, that show becomes the new ‘formula’ for success with every other channel copycatting it in the hope of replicating that success. This completely ratings dependent approach to programming leaves very little room for experimentation. And yet this dependence is ironic given that many channels, production houses and advertisers make no bones about their reservations of Peoplemeters because of where the meters are placed and the limited size of the panel (Medialogic recently expanded the size of the panel and introduced new technology and this may go some way in allaying these reservations – see page 38 for more details).

According to Khan one of the reasons why ratings dictate so much of the content is because “we don’t invest in research and we don’t have research companies that understand TV. We need to go to our audiences and find out what they want to watch and why. But we are not an interactive industry and so we are not developing the market.”

It’s all about the money

Developing the market does not appear to be the top priority for either channels or production houses as both face the challenge of shrinking profitability in their businesses. For context, channels currently pay production houses between Rs 700,000 to 800,000 per episode for a drama (some dramas may sell for as high as one to Rs 1.3 million per episode). On the other hand, a leading channel’s advertising rate during primetime is roughly between Rs 125,000 to 170,000 per minute.

Both channels and production houses say that beset as they are with inflationary pressures – including actors and writers who increase their rates every time they have a hit drama, skyrocketing location costs due to limited availability as a result of security concerns, among other factors – these rates make survival extremely difficult. As a result, production houses are often forced to cut corners in terms of casting, location or wardrobe to maintain profitability and this leads to a less than perfect end result, while channels oversell space to earn greater revenue, leading to ad clutter.

A consequence of this reduced profitability is that production houses have formed alliances with channels (Geo and A&B, ARY and Six Sigma) to remain afloat. Although this generally means that production houses will get somewhat less than the market rate from their partner (usually cost plus a small premium), the flip side is that they now have a number of confirmed projects for the year.

Another way channels are addressing shrinking profitability is by reselling their dramas to foreign channels (of which Zee Zindagi appears to be a major recipient, albeit not the only one). So far, the proceeds from the resale of content is kept by the channel, despite the fact that the production houses maintain that as the original copyright belongs to them, not only is their consent necessary for resale, they should also have share in the earnings. However, except for 7th Sky Entertainment (which has no alliance with any particular channel), none of the other production houses dare say this because ultimately, fighting against a channel is like biting the hand that feeds them.

According to Asad Qureshi, Director, 7th Sky Entertainment, “Our content is being dubbed into Arabic and it is also aired on Zee Zindagi in India, and yet I only got paid for it once, and even that money is given to me in bits and pieces as the channels earn it. [Reselling content] is the next stage of our development and it should benefit all of us, but it is being sabotaged.”

The channel’s response to this is echoed by Mir who says that if production houses want a share of the royalties, they should sell the content to local channels at less than market price and then sell it to the foreign channels themselves. He, however, doubts that anyone has the business acumen to do this yet. Seja, on the other hand, points out that reselling content is not a major source of revenue for TV channels, although one source points out that Zee Zindagi pays channels between $2,000 to 5,000 (Rs 200,000 to 500,000) per episode.

Apart from royalties, Qureshi’s statement highlights another major issue, which is that most channels (with the exception of Hum TV and Urdu1) do not pay their production houses on time, making them wait for months until they themselves are paid by the advertisers. Seja responds to this by saying that as the market works entirely on credit, it is impossible for channels to pay production houses up front as “advertisers don’t pay on time.”

Ultimately it all boils down to the fact that channels have only one stream of revenue, i.e. advertising, and are completely at the mercy of advertisers, some of whom are not exactly known for paying their dues promptly. Alternative sources of revenue such as subscription payments for DTH would help the channels develop further, leading to more resources for content and market development. Alas the onus to do so is on PEMRA and the government, and neither appears to be making any moves in this direction.

Mir says that TV channels have to learn how to run a leaner and more cost effective operation to remain profitable. “This concept of having a large set-up to manage channels will go away… PTV style channels will not survive.”

And that’s a wrap

Despite the many challenges, entertainment is a big business in Pakistan and looks set to become even bigger as most industry insiders say that there is room for more entertainment channels in different genres, so that people don’t have wait for a favourite show on an ‘all-purpose’ entertainment channel. Mir says that while dramas will continue, their presentation may change and the ratio may flip over in favour of reality and entertainment shows.

A growing entertainment industry needs a steady influx of technical staff (cameramen, line producers, production managers) and there is currently a dearth of such people because as Shunaid points out, “most university graduates want to be on the managerial level.”

Ultimately, the success on the entertainment industry is dependent on the triumvirate of channel, production house and advertiser. Channels need to invest more in content and must consider capping advertising to enhance the viewership experience. Although capping is complicated by many considerations (see page 12 for more), it is possible to do so with premium quality content. Production houses need to be run like proper businesses (and not creative hotshops) and grow in size because only then will they have any say in policy and decision making. Finally, if advertisers want to see better content on entertainment channels, they should not, as both Mir and Seja point out, be buying a time slot; rather they should invest in the show or the content.

There is a sense among many channels and production houses that if local players do not unite and start capitalising on the opportunities available immediately, Indian players will step in and not only start capturing audiences (in any case 25-30% of content on local channels is already Indian), they will also start eating into ad spend. That would be a very sorry situation indeed. The time to act is now.