Reading the future: Expanding beyond national borders

With more diversity and greater competition in its media and advertising sector than ever before – plus a wealthier population and a growing economy – Turkey has become a global leader in industry growth. The country’s steady economic expansion in recent years stands in contrast to the stagnation of many neighbouring states. European, Middle Eastern and Central Asian markets cross paths in Turkey; they are influenced by its media sector and also allow local media to expand beyond the its borders via Turkish film and TV penetration.

At the same time, the country is still working with the challenges economic growth and political development present, as the wider variety of opinions offered in the nation’s media often causes friction. For some, a sense of growing polarisation represents a danger; others regard it as the emergence of a healthier (if more contested) public sphere. Issues of media freedom continue to cast a shadow over the complex reality of a changing society.

Overall, the sector is one of strong growth and innovation. “The current media scene is much more colourful than in the past,” Bülent Keneş, editor-in-chief of Today’s Zaman, told OBG. “Nowadays, there is a much wider spread of opinion represented, without the past domination of a small elite.”

As the benefits of economic growth spread across the country, the traditional target markets in Istanbul, Izmir and Ankara are being supplemented by new ones in provincial centres. At the same time, the growth of online connectivity has pushed the sector into a more universal space, well connected to the world beyond its borders.

NEWSPAPERS: According to data collected by GroupM from newspaper distributor Yay Sat, newspaper circulation figures have been largely in decline since the mid-2000s, with the exception of one title – Turkey’s best-selling paper, Zaman. It has made a recent surge, overtaking its nearest rival, Posta, in 2007, and its second-closest rival, Hürriyet, in 2006.

In 2012, figures show Zaman with a circulation of 962,910 copies, Posta with 457,320 and Hürriyet with 414,755. The 2011 figures were 894,773, 476,768 and 437,650 respectively, showing growth of 7.6%, -4% and -5.2%, year-on-year compared to 2010. Widening this to the top six, by circulation, brings Sabah in fourth, with a circulation of 329,432 in 2012, down 6% on 2011’s 350,935, and the sports paper Fotomaç, with a circulation of 211,999 in 2012, up 2.8% on 2011’s 206,275. In sixth place is another growth story, Star, which saw its circulation rise from 137,332 in 2011 to 145,004 in 2012.

A number of other newspapers outside the top five continue to exercise influence for historical and political reasons. Cumhuriyet is the oldest still-in-print paper, founded in 1924, with a circulation of 51,747 in 2012, slightly down on the previous year’s 52,369. The paper has a strong Kemalist orientation, supportive of a state-nationalist, left-of-centre line. Radikal, meanwhile, has influence as the paper of the more liberal left, particularly in arts and culture, and had a circulation of 26,521 in 2012, or less than half its 2011 total of 55,478. Türkiye has long been the paper of the nationalist right, and had a circulation of 127,968 in 2012, down from 139,537 in 2011, while Yeni afak is widely known as the paper of the intellectual Islamist population, with a circulation of 102,357 in 2012, down from 106,499 in 2011. Another paper that was historically popular is Milliyet, which had a circulation of 142,026 in 2012, down from 151,031 in 2011.

Dünya is the most longstanding business periodical, although recent circulation figures were unavailable. The paper currently also publishes an insert in the Turkish edition of the International Herald

Thus, overall, newspaper circulation figures have followed the global pattern of decline, as a younger generation turns to online sources of information, often provided for free by the very same newspaper groups. “The print media here has not been performing so successfully,” Kenes told OBG. “If you take out Zaman, you quickly see the real nature of circulation losing ground.” The main paper to buck the trend, Zaman (which also owns Today’s Zaman), uses a different distribution model, based on subscriptions rather than on distribution agencies operating via newspaper kiosks and newsagents, a method which may well have helped to keep its circulation figures up – although this system provides numbers that are widely contested by rival media groups.

TELEVISION: In TV, viewership figures have been the subject of intense controversy as of late. Indeed, for a period of nine months after December 2011, there were no official ratings, because of allegations of fraud at the Turkish branch of AGB Nielsen.

The TV Audience Research Committee, which compiles official data, severed its contract with the ratings agency, which had supplied data up to that point, switching to the agency TNS. Thus, data from September 17, 2012 onwards uses a slightly different methodology. The base from which the figures are drawn is also being widened to include people living outside the main metropolitan areas. From June to September 17, 2012, individual channels reported their own ratings, because of new difficulties encountered in implementing the TNS system.

Thus, data for 2012 is widely questioned. Nonetheless, using 2011 figures, and allowing for possible distortions under the AGB Nielsen regime, GroupM figures based on the Nielsen data report that the largest viewing share in 2011 went to the TV station Kanal D, with 14%. Second was ATV, with 10.3%, then Show TV with 9.6%. Fourth place went to Fox, with 8.5%, then fifth to Star with 7.3%. STV then had 4%, Kanal 7 3.5% and Flash has 1.8%. The “others” category takes up some 41% of all viewers, showing the wide number of smaller channels available.

Looked at over time, Kanal D has been highly successful in preserving its viewing share, and indeed, has secured the largest slice of this pie since at least 2001, when it had a 15.8% share, and with a recent peak of 18% in 2003. Show TV, meanwhile, has seen its position erode – in 2001, it had 15.6% of viewers – while ATV has achieved fairly consistent numbers, reaching a recent peak of 15.2% in 2003 and a low of 8.9% in 2008.

According to the GroupM figures, between them TV and newspapers accounted for 79% of all advertising expenditure (adex) in 2011; these figures also showed the relative strengths of other media varieties, such as radio (2.8%) and online (7.9%). Figures from the European Centre for Journalism suggested around 1100 radio stations were on-air nationwide in 2010, although most were located around Istanbul. Many of these are independent stations, although the large media conglomerates and the state broadcaster, the Turkish Radio and TV Corporation (TRT), are also major players in the sector.

GROUPS & OWNERS: In terms of ownership, the Turkish media is highly concentrated. Six groups have historically dominated – the Doğan Group, Doğuş Group, Çukurova Group, Çalık Holding, the Ciner Group and Ihlas Holding. In recent years, however, this arrangement has been shifting, as the fortunes of these different groups have waxed and waned.

In particular, the Doğan Group has recently seen its position squeezed. This major conglomerate, which also maintains interests in energy, tourism, industry and trade, runs its media businesses through Doğan Yayın Holding. This company comprises the subsidiary Doğan Gazetecilik, which included Posta, football paper Fanatik, Vatan and Milliyet until 2011, as well as the subsidiary Hürriyet Gazetecilik, which controlled the Hürriyet, Hürriyet Daily News, and a variety of online and publishing ventures, along with the bookstore chain D&R.

In 2011, however, it sold Vatan and Milliyet to a joint venture between the Demirören Group ( interests in energy, real estate, construction and mining) and the Karacan family, the original owners of Mil- liyet. The papers were sold for a total of $74m. This sell-off came after the Doğan Group was hit with a $3.8bn back-tax and penalties bill in 2009. A series of court actions reduced that bill – the parties eventually settled on $590m – but the impact on the Doğan Group was significant, particularly as it came amidst allegations that it was being targeted because of its opposition to the Justice and Development Party (AKP) government. The consequences were also felt in the group’s TV segment, with the sale of Star TV to Doğuş Holding for $327m in 2011. Doğan Yayın Holding continues to own TV stations Kanal D and CNN Türk, along with radio stations Radyo D, CNN Türk Radyo and Slow Türk Radyo, plus digital broadcaster D Smart. It also has a broadcaster overseas, in Kanal D Romania and the news agency DHA.

Doğuş Holding, another major group active in the sector, has interests in banking, automotives and construction as well as media. Doğuş launched its operations by establishing the country’s first dedicated news channel, NTV, and has expanded greatly since. Doğuş has added the channels CNBC-e, NTV Spor and Kral TV, along with a range of radio stations, from Kral FM to Radyo Eksen.

The Çukurova Group, which is one of Turkey’s oldest conglomerates (dating back to 1923), holds interests in construction, IT and telecoms, financial services and energy outside of its media business. In newspapers, it holds the Aksam, Tercüman and Güneş titles, along with a range of magazines; in broadcasting, it owns Show TV, Skyturk and the Digiturk digital TV broadcasting platform.

Çalık Holding, which is primarily involved in the energy, construction, finance and telecoms sectors – among other activities – is a relative newcomer to the media business. It currently owns ATV and the Sabah newspaper, although it has been attempting to divest itself of both in recent times.

Çalık had paid $1.1bn in 2007 for ATV-Sabah, which at the time was itself one of Turkey’s largest media groups. In 2012, Rupert Murdoch’s News Corp, already the owner of the Turkish Fox channel, was rumoured to be interested in acquiring ATV-Sabah, but this deal apparently fell through. Çalık is widely seen as pro-AKP, due to its family connections to the prime minister.

Çiner Group’s media interests include Habertürk, which was originally a TV channel, but has since branched out into a newspaper. The group, which also has interests in energy, mining and industry, also provides the Turkish Bloomberg TV service, and owns C Film Making and Ciner Media Investments.

Ihlas, meanwhile, owns Türkiye newspaper, TGRT Haber TV as well as Ihlas Haber Ajansı, a news agency.

As the country’s number-one newspaper vendor, the Zaman Media Group must also be included as one of the country’s main media outfits. The group, which also owns the Cihan news magazine and the magazine Aksiyon, has no other business interests beyond media, although it is closely linked to the Islamic Fetullah Gülen movement.

TRT operates 15 different TV channels too, including the family entertainment TRT-1, news channel TRT Haber and the recently launched Kurdish language channel, TRT-6.

Another non-conglomerate actor that is influential in the media world is businessman Ethem Sancak, the owner of Star newspaper and the TV channel Kanal 24. He is widely seen as having largely pro-AKP sympathies, as he is a former AKP deputy.

The fact that most of these major media groups have interests in other industries, in addition to often explicit political sympathies, however, has also led to concerns over the extent to which these commercial interests may hamper freedom of expression. The 2012 EU Commission report on the Turkish media sector was one of the most recent international analyses highlighting this point.

RULES & REGULATIONS: An important change in the rules governing media ownership in Turkey was introduced in 2011. Under Law 6112, the maximum stake a foreign entity can have in a Turkish broadcaster has been increased, from 25% to 50%, and each foreign investor has been allowed to own stakes in up to two broadcasters. The law also permits foreign or minority-language broadcasts to air, and lowers the percentage of ad revenue channels had to pay the Radio and TV Supreme Council (RTÜK).

RTÜK, founded in 1994, is the broadcast sector’s regulatory body; it is composed of nine members chosen by the parliament for six-year terms. The council also has censorship powers. While these are no longer used in an overtly political way, it has often to use these powers against programmes that violate its views of national values.

In recent times, it has acted, with the support of the government (if not overt pressure), to force changes in leading TV series, such as the police drama “Behzat C. Bir Ankara Polisiyesi” and the historical series “Muhtesem Yüzyil.” RTÜK also partners with the Communications High Council and the Telecommunications Authority in the allocation of frequencies to broadcasters.

In print, there is no such equivalent body, although there are a number of professional associations and self-regulating groups. These include the Turkish Press Council and the Turkish Journalists Association. In recent times, politicians have often used the courts as an avenue for pursuing complaints about articles in the press, thus indirectly regulating content.

The internet, meanwhile, is covered by the Telecommunications Communication Presidency (TIB), which has the power to block websites. It famously blocked youtube.com for many years, on that basis that it carried content insulting to the nation’s founder, Mustafa Kemal Atatürk. The TIB has also acted to block websites it judges pornographic.

PRESS FREEDOM: In recent years, there has been considerable criticism internationally and domestically concerning the number of journalists currently jailed in Turkey. Methods for calculating this number are disputed, with the Turkish Journalists Union claiming 94 in 2012, while as per a year-end 2012 report from the Committee to Protect Journalists there were 76 in jail for their work as journalists as of August 2012. The government and its supporters say that most, if not all, of those jailed are in prison for offences unrelated to journalism, including connections to terrorism and support for military takeovers. “Those who are jailed,” Kenes told OBG, “despite having journalist’s IDs, are not people accused and convicted of journalism. Being a journalist cannot allow you to commit crimes.” Yet others point out that many of the imprisoned are well known for their opposition to terrorism and/or military rule.

The issue, while disputed, has undoubtedly created an atmosphere of suspicion and self-censorship amongst media outlets opposed to the current government. It has also come at a time when in many other respects, formerly taboo political issues, such as the September 1980 coup, the role of the military and the Kurdish conflict, are discussed more openly in the media.

ADVERTISING: Given the circulation figures above, along with online data, GroupM numbers show that the average Turkish consumer currently watches TV for 3.1 hours a day, reads 0.4 copies of a newspaper, listens to one hour of radio, reads 0.03 monthlies per month, looks at the internet for 6.4 hours a month, reads 0.86 daily or weekly supplements. The average Turk also uses transport – where they can be exposed to outdoor advertising – 4.4 hours a week. Thus, the highest concentration of adex currently goes to TV, which, the GroupM data for 2011 suggests (the latest full year availability), received TL2.45bn (€1.06bn) in adex that year. Newspapers received TL950m (€410m), the internet (display) TL340m (€147m), out of home advertising received TL300m (€130m), radio TL120m (€52m), magazines TL90m (€39m), and cinema, TL50m (€22m).

This totalled TL4.32bn (€1.87bn), which was up by 19.6% on 2010’s TL3.61bn (€1.56bn), with every platform showing a year-on-year increase. Taking inflation into account, this represented sector growth of some 6.6%, after growth of 8.9% in 2010. As a percentage of GDP, ad spend stood at 0.34% in 2011, up from 0.33% in 2010, while ad spend per capita was TL59.70 (€25.78), up from TL50.60 (€21.85).

For 2012, the annual growth figures are likely to be less spectacular. The absence of ratings for a large part of the year caused a decline in advertising for most, with the Turkish Advertising Association (RV) estimating around 18% of the market size was lost. At the same time, economic growth slowed, down from 8.5% in 2011 to 2.2% in 2012. Nonetheless the expectation amongst those interviewed was that growth would recover, particularly in TV.

In terms of sector spend, based on duration, the top areas are food and beverages, finance, cosmetics and personal care products, and telecoms, according to the RV. Four of the top 10 spenders in 2012 were international companies and the rest local.

In terms of agencies, the market is highly mature, with all networks exerting a presence, usually through partnerships with a local company. Digital marketing companies have also been expanding in recent times, with outfits such as 42?29!, Rabarba and C-Section amongst the top agencies. Turkey has been racing up the social media league as well in recent times, with some 30m registered Facebook users in 2012, and 40m consumers with 3G mobile access.

OUTLOOK: For 2013, there is widespread expectation that increased economic growth, along with the sector’s ability to move on from recent ratings issues, should result in solid expansion.

The long-term trend of declining print, alongside strong TV and increasing online platforms, is likely to continue, with further investment into online outfits likely. Angel investor networks and venture capital outfits such as Galata Business Angels have begun to exercise an influence in this online field.

In terms of the legislative and journalistic framework in which this takes place, there are perhaps stronger concerns, particularly over the degree to which the media has become politically polarised. The political affiliation of the major media operators continues to play an outsized role in the content of coverage and treatment of media outlets. Making sure that a robust range of political views is aired in the public sphere is vital for the long-term survival – and investment potential – of any media sector.