The lack of media research is directly contributing to the decline of the media industry in Nepal, says Gavin Anderson. But a UK-funded development programme is hoping to turn the situation around.
Put yourself in the position of an advertiser or communicator working in Nepal. You have a fixed budget and you need to reach as many of Nepal’s 31 million people as possible – of which over 80% live outside the main cities. How can you maximise your reach in the most cost effective way?
One potential answer is FM radio. Radio in Nepal liberalised in 1997 and has grown exponentially. In 2013 there were around 370 radio stations in the country and studies suggest that over 80% of the population can now be reached by FM radio. So which of these radio stations should you choose?
In most countries with a diverse and complicated media industry, research companies operate to provide the information that allows advertisers and communicators to target their resources most effectively. Data is collected through quantitative surveys and media diaries; digital means are also employed to assess the popularity and reach of different media products and channels. This is collected regularly – monthly in larger economies, quarterly in some and perhaps annually in a smaller economy. Advertisers and communicators subscribe to this data which influences advertising and communication choices, and the data becomes the backbone of media ratings – in effect, it is the driving force of competitiveness, competition and therefore improvement in the media industry.
But in Nepal this data does not exist. An advertiser is faced with the prospect of trying to decide on which of the 379 radio stations they should place their advertising spend, or whether to spend it on another channel all together. With no audience data or ratings, they are in effect making a stab in the dark and potentially squandering a significant proportion of their advertising budget. Many decide not to spend at all.
The impact of the lack of such a service in Nepal is clear. To illustrate the point, let’s compare the radio market in Nepal with that of Uganda. Despite the obvious cultural and geographic differences, they have many similarities. They have a similar population size (35.6m in Uganda). They both have a large rural populations (83% and 84%). Their Gross National Income (GNI) per capita is surprisingly similar ($1,137 to $1,168) meaning that the sizes of their economies are almost identical. They also both have a large radio industry. Uganda’s industry liberalised two years earlier than Nepal’s and has grown to more than 250 stations. But in radio terms, the similarities stop here.
“The Nepalese radio industry suffers from a lack of comprehensive, reliable and regular media research – but it is not just the radio industry’s problem. It is impacting on the growth of all media channels”
The revenue base for radio (total advertising spend) in Nepal is 7% of that of Uganda ($7.4m compared to $104.8m). Advertising rates on Nepalese radio have spiralled down and stations can be found who will offer a 30-second advert for around 5 cents, or less than a cup of spiced Nepalese tea in a rural tea shop. Ugandan radio stations on the other hand charge 300 to 700 times this rate, and the Ugandan radio sector is booming while Nepal’s sector faces deep decay. Paradoxically, very few radio stations close down in Nepal. In fact, new stations are even opening up – sometimes with international donor and philanthropic support. Nevertheless, the large majority of stations are working with skeleton staff who are paid minimal wages, if they are paid at all. They produce few local programmes and fill airtime with music and cheap adverts.
The reason for this Nepalese radio malaise is not the increasing competitiveness and reach of new emerging media. Numerous ad-hoc surveys exploring the demand for media highlight radio as being the most preferred channel by audiences. A 2013 BBC Media Action survey showed that 86% of people preferred radio as a channel for receiving information on water, food and energy issues. Mobile phones were preferred by only 8%, internet 6% and newspapers 32%.
The significant difference between Uganda and Nepal is that Uganda has a well-established, credible and regular (annual) All Media Product Survey (AMPS) and media ratings service. Advertisers can make informed decisions based on those ratings and, as a result, airtime and space in the leading media is highly sought after. Nepal’s industry lacks this fundamental driver for competitiveness, while it exists and operates effectively in Uganda.
Research to the rescue
A key problem in the Nepalese radio industry is therefore the lack of comprehensive, reliable and regular media research – and it is not just the radio industry’s problem. It is impacting on the growth of all media channels (TV, print and digital) and the advertising, communications and public relations industries. In one of the poorest countries in Asia, it is also impacting on the ability to reach people with essential information on health, business, agriculture, governance etc.
“Media research has the potential to make a deeper and longer lasting impact on poor households in Nepal by revitalising an essential industry”
This developmental impact is why a UK Department for International Development (DFID) funded project, Samarth-NMDP (Nepal Market Development Programme) is working to resolve this underlying problem in the Nepalese media industry.
In the early stages of Nepal’s media boom, the media was smaller, more profitable and dynamic. Information flow improved and Nepal’s radio sector in particular contributed significantly to democracy and development. The media industry crisis has resulted in a severe deterioration in this role.
Handing out grants to a poor household or farmer might be considered a more traditional development approach in a poor country, but Samarth-NMDP’s approach is different. The programme is aiming to support commercial investment in media research and support a company to establish this service sustainably. It is clearly a commercial service and Samarth-NMDP aims to be the catalyst or facilitator in the creation of this commercial service, and not the service provider.
It is not a grant to a poor household – but it has the potential to make a deeper and longer lasting impact on poor households in Nepal by revitalising an essential industry.