The Economics Of Namibian Media

OWNING a commercial radio station in Namibia is much like owning a mine, but without the hassle.

There is no large infrastructure or factory building (a small office will suffice), raw materials don’t have to be delivered (apart from a store of music – normally on computer) and there is no large workforce to contend with (a small team of announcers, sometimes only paid by the hour, is all that is necessary). In return, the income from advertising is considerable, and some stations claim to attract more than 8 000 advertisements per month.At an average of N$100 each (although many time slots are more expensive), that’s a considerable income of N$800 000 per month.Multiply that by twelve, and a radio station should be bringing in N$9 million a year.Of course it’s not as simple as that, and there are obviously other expenses.To extend transmission reach to other Namibian towns, for example, will require further investment and the leasing of transmitters and transmission networks.Nevertheless, as revealed in a new study on Media Ownership and Legislation in the Republic of Namibia (compiled by Martin Buch Larsen for MISA Namibia), the business of media in Namibia is increasingly a financially rewarding one.This can be seen by the gleaming new offices and studios built for stations such as Kosmos, Radio Kudu/Omulunga and Radio Wave in the past few years.The mining analogy is apt in another sense.Because the FM broadcast spectrum is restricted – there are simply a limited number of frequencies that can be allocated – and because of the difficult nature of some Namibian locations – some radio stations in Windhoek have two frequencies in order to reach both the eastern and western suburbs of the city – that limitation becomes even more intense.The result is that those pioneers who obtained early frequencies have become very rich indeed by selling them to other entities.Thus we read that Radio 99 and Radio Energy – two of the earliest commercial radio stations – were originally owned by two German citizens – M.Aita and R.Lange – but have since both been sold (to Democratic Media Holdings and SWAPO respectively).The Radio 99 deal was allegedly in the region of N$6 million or so.Swapo, of course, are also heavily involved in MultiChoice Namibia, through their business arm, Kalahari Holdings.One opposition parliamentarian remarked some years ago that perhaps the reason why NBC television was of such poor quality was to encourage Namibians to subscribe to DSTV, and thus directly support the ruling party.In his report, Larsen notes that MultiChoice Namibia is “a very profitable business”.Also of interest is the trend towards cross-media ownership.Swapo have interests in a radio station, television stations, and the publication, Namibia Today.Democratic Media Holdings now own two newspapers (in Afrikaans and German), as well as a radio station (Radio 99).Plus, there are cross-border connections, with the recent acquisition by News 24 (the South African media giant) of a stake in DMH.Other Namibian media moguls of note include Paul van Schalkwyk and his wife (owning, amongst others, One Africa TV, INTV productions, Advantage McCann and Flamingo Magazine), Norman Kotze (owner of both Radio Kudu and Omulunga Radio), and Esther Smith (owner of the Windhoek Observer and Space Magazine).Another development is ownership of both media and the means of media manufacturing.Thus, Daniel Steinmann is owner of both the Namibia Economist as well as Web Offset Printing and Trustco Group now both publish newspapers (Informanté) and print them (The Namibian) in their 50/50 partnership with The Namibian in Free Press Printers.The report also highlights the incestuous fighting between the three ‘competing’ cellphone companies, all of which are essentially state companies, and two of whom (MTC and Telecom Namibia) fall under the same holding company (Namibia Posts and Telecommunications Holdings).Insight Magazine recently claimed that MTC was the second most profitable company in Namibia, but unfortunately the huge profits being made benefit only the state, and not private investors.The Internet is dominated by global multinationals.Africa Online’s major shareholder is Telkom (South Africa), and Verizon Business Namibia is part of the US conglomerate of Verizon Business.Swapo again have interests in this field, with a major shareholding in M-Web.All of which makes the continued financial difficulties at the NBC even more mysterious.Whereas most of the above media outlets rely totally on advertising for survival, NBC has not only advertising revenue (from their television station as well as the ten radio stations), reported to be N$24 million a year, plus licence fees (nearly N$1 million), plus a government subsidy (nearly N$63 million), and also other sources of revenue (including the leasing of transmitter infrastructure, bringing in approximately N$10 million).That’s an income of nearly N$100 million a year.And in many of these fields, radio language services in particular, they are the only media available to advertisers, or the only media that is able to reach certain areas.NBC TV remains wider in its coverage than the other local television station operators, One Africa TV and TBN.Plus, it seems, NBC can no longer fulfil its national obligation by broadcasting national events – such as the recent international soccer match involving the Brave Warriors – unless it is paid extra.They claimed to have needed N$40 000 to cover this match.Eventually One Africa TV came to the rescue and filmed the event.In addition, the expenditure for the Corporation must be minimal.The buildings (NBC Radio Centre was built in 1969) would have been paid for long ago, and the construction of new transmitters comes out of the National Development Plan (NDP) budget.So the main expenditure is personnel, and that, according to a tender placed in national newspapers for administration of the NBC Retirement Fund, involves 383 members with pensionable salaries of N$3 089 873 per month, or about N$37 million per year.Add running costs (electricity, water, etc) and maintenance, at an optimistic N$13 million, and programme purchases for television at N$20 million, and we still end up with a N$30 million surplus per year.So where is our money going? We must thank the independent media for continuing to place the spotlight on this crucial issue, and following up on matters such as the case of alleged corruption by the former Director General, unfortunately delayed, yet again, until October this year.Plus the mysterious disappearance of what local filmmaker Vickson Hangula (in an article in The Namibian of 29/06/07) claimed was between N$30 and N$40 million to the “shady local Rock Enterprises as a front to produce local content.That money fell into a pit.”This is all our money – whether as taxpayers, licence payers or purchasers of goods – and we need to start holding the Corporation, and, if necessary individuals, responsible for this waste.There is no question that we will always need a public broadcaster.Despite the success of commercial and community media in Namibia, there will always remain areas (education, minority languages, cultural programming, etc) that fall under the embrace of the public broadcaster.To ensure that this happens, the direction must start from above.The recent tendency amongst parastatals (e.g.Telecom Namibia) to have a more transparent and open process in the appointment of a governing board is a good sign.Let us stand together and continue to ensure that NBC, starting from the top, is strong, independent, well run, and professional.* Robin Tyson is a lecturer in media studies at the University of Namibia.’Media Ownership and Legislation in The Republic of Namibia’ by Martin Buch Larsen is available from MISA Namibia, Rossini Street, Windhoek.In return, the income from advertising is considerable, and some stations claim to attract more than 8 000 advertisements per month.At an average of N$100 each (although many time slots are more expensive), that’s a considerable income of N$800 000 per month.Multiply that by twelve,
and a radio station should be bringing in N$9 million a year.Of course it’s not as simple as that, and there are obviously other expenses.To extend transmission reach to other Namibian towns, for example, will require further investment and the leasing of transmitters and transmission networks.Nevertheless, as revealed in a new study on Media Ownership and Legislation in the Republic of Namibia (compiled by Martin Buch Larsen for MISA Namibia), the business of media in Namibia is increasingly a financially rewarding one.This can be seen by the gleaming new offices and studios built for stations such as Kosmos, Radio Kudu/Omulunga and Radio Wave in the past few years.The mining analogy is apt in another sense.Because the FM broadcast spectrum is restricted – there are simply a limited number of frequencies that can be allocated – and because of the difficult nature of some Namibian locations – some radio stations in Windhoek have two frequencies in order to reach both the eastern and western suburbs of the city – that limitation becomes even more intense.The result is that those pioneers who obtained early frequencies have become very rich indeed by selling them to other entities.Thus we read that Radio 99 and Radio Energy – two of the earliest commercial radio stations – were originally owned by two German citizens – M.Aita and R.Lange – but have since both been sold (to Democratic Media Holdings and SWAPO respectively).The Radio 99 deal was allegedly in the region of N$6 million or so.Swapo, of course, are also heavily involved in MultiChoice Namibia, through their business arm, Kalahari Holdings.One opposition parliamentarian remarked some years ago that perhaps the reason why NBC television was of such poor quality was to encourage Namibians to subscribe to DSTV, and thus directly support the ruling party.In his report, Larsen notes that MultiChoice Namibia is “a very profitable business”.Also of interest is the trend towards cross-media ownership.Swapo have interests in a radio station, television stations, and the publication, Namibia Today.Democratic Media Holdings now own two newspapers (in Afrikaans and German), as well as a radio station (Radio 99).Plus, there are cross-border connections, with the recent acquisition by News 24 (the South African media giant) of a stake in DMH.Other Namibian media moguls of note include Paul van Schalkwyk and his wife (owning, amongst others, One Africa TV, INTV productions, Advantage McCann and Flamingo Magazine), Norman Kotze (owner of both Radio Kudu and Omulunga Radio), and Esther Smith (owner of the Windhoek Observer and Space Magazine).Another development is ownership of both media and the means of media manufacturing.Thus, Daniel Steinmann is owner of both the Namibia Economist as well as Web Offset Printing and Trustco Group now both publish newspapers (Informanté) and print them (The Namibian) in their 50/50 partnership with The Namibian in Free Press Printers.The report also highlights the incestuous fighting between the three ‘competing’ cellphone companies, all of which are essentially state companies, and two of whom (MTC and Telecom Namibia) fall under the same holding company (Namibia Posts and Telecommunications Holdings).Insight Magazine recently claimed that MTC was the second most profitable company in Namibia, but unfortunately the huge profits being made benefit only the state, and not private investors.The Internet is dominated by global multinationals.Africa Online’s major shareholder is Telkom (South Africa), and Verizon Business Namibia is part of the US conglomerate of Verizon Business.Swapo again have interests in this field, with a major shareholding in M-Web.All of which makes the continued financial difficulties at the NBC even more mysterious. Whereas most of the above media outlets rely totally on advertising for survival, NBC has not only advertising revenue (from their television station as well as the ten radio stations), reported to be N$24 million a year, plus licence fees (nearly N$1 million), plus a government subsidy (nearly N$63 million), and also other sources of revenue (including the leasing of transmitter infrastructure, bringing in approximately N$10 million).That’s an income of nearly N$100 million a year.And in many of these fields, radio language services in particular, they are the only media available to advertisers, or the only media that is able to reach certain areas.NBC TV remains wider in its coverage than the other local television station operators, One Africa TV and TBN.Plus, it seems, NBC can no longer fulfil its national obligation by broadcasting national events – such as the recent international soccer match involving the Brave Warriors – unless it is paid extra.They claimed to have needed N$40 000 to cover this match.Eventually One Africa TV came to the rescue and filmed the event.In addition, the expenditure for the Corporation must be minimal.The buildings (NBC Radio Centre was built in 1969) would have been paid for long ago, and the construction of new transmitters comes out of the National Development Plan (NDP) budget.So the main expenditure is personnel, and that, according to a tender placed in national newspapers for administration of the NBC Retirement Fund, involves 383 members with pensionable salaries of N$3 089 873 per month, or about N$37 million per year.Add running costs (electricity, water, etc) and maintenance, at an optimistic N$13 million, and programme purchases for television at N$20 million, and we still end up with a N$30 million surplus per year.So where is our money going? We must thank the independent media for continuing to place the spotlight on this crucial issue, and following up on matters such as the case of alleged corruption by the former Director General, unfortunately delayed, yet again, until October this year.Plus the mysterious disappearance of what local filmmaker Vickson Hangula (in an article in The Namibian of 29/06/07) claimed was between N$30 and N$40 million to the “shady local Rock Enterprises as a front to produce local content.That money fell into a pit.”This is all our money – whether as taxpayers, licence payers or purchasers of goods – and we need to start holding the Corporation, and, if necessary individuals, responsible for this waste.There is no question that we will always need a public broadcaster.Despite the success of commercial and community media in Namibia, there will always remain areas (education, minority languages, cultural programming, etc) that fall under the embrace of the public broadcaster.To ensure that this happens, the direction must start from above.The recent tendency amongst parastatals (e.g.Telecom Namibia) to have a more transparent and open process in the appointment of a governing board is a good sign.Let us stand together and continue to ensure that NBC, starting from the top, is strong, independent, well run, and professional.* Robin Tyson is a lecturer in media studies at the University of Namibia.’Media Ownership and Legislation in The Republic of Namibia’ by Martin Buch Larsen is available from MISA Namibia, Rossini Street, Windhoek.