Uganda: The 70 Percent Local TV Content Directive will stifle Industry

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 Uganda Communications Commission Executive Director, Godfrey Mutabaazi, has issued a statement that all free to air television stations will air 70% local content. This is indeed an admirable stance and he should be commended for his good intentions. However, I think he also needs to look at the current realities on the ground and perhaps understand the industry better.

The UCC has supposedly looked at other countries for guidance and set the standard based on those countries. These countries are SA, Australia and the UK, among others.

I would like to take a step backwards first and look at the Uganda TV media industry. Free to air TV in Uganda is expected to fund itself, entirely from advertising. There are no government grants, incentives or special payments for TV stations.

In fact, UCC levies hefty license fees on all TV stations and the UBC, the controllers of most of the towers and broadcast sites also charges high fees for use of towers, electricity and other services. The TV stations are already hamstrung. Then there is the ad spend.

The majority of ad spend in Uganda still goes into radio (Around 65% at the Ad Index measures from IPSOS 2012 Jan to Dec).

Ad Index measures the entire ad industry at 576** Billion shillings per annum (Jan to Dec 2012) split as follows: Radio at 65% (sh377b), TV at 21% (sh120b) and lastly print at 14% (sh77b). Now, for the purposes of reality again, Ad index measures everything at rack rates, so in order to create a real picture, we need to bring the discounts into account, plus packages and in house advertising (Media owners promoting themselves and programming). Let's then knock 50% off this figure.

That then translates into a total of sh288b and a TV share of sh60b per annum, sh5b per month. That sh5b per month should then be split amongst the free to air TV stations. Taking just the main ones into account, you have NTV as the biggest, then Bukedde 1, followed by UBC, WBS, Urban then NBS, Record, TOP TV, Channel 44, TV WEST and lastly Bukedde 1 / Sports TV (there are some other stations, but their spends are small).

That makes up 11 stations. If we split the ad spend according to the market share (again using Ad Index), the shares are as follows, NTV 23%, UBC at 16%, WBS at 16%, Bukedde 1 at 16%, NBS at 15%, Record 4%, Top TV 2%, Channel 44 at 3% and Urban at 4% and TV WEST, Bukedde 1 and SPORTS TV at 1%. The top four stations are each getting on or around sh1b per month.

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