Public Diplomacy Forum - USIA


April 1998

Free Market Tough for TV in Kyrgyzstan
Public Diplomacy in the Iraq Crisis

About the Public Diplomacy Forum

Spotlight presents new articles about public diplomacy, USIA's exchange programs and international projects, and cooperation with our private sector counterparts.

The current Spotlight features two stories that highlight the overseas focus of USIA: a piece on media developments in Kyrgyzstan and an account of USIA activities in support of U.S. policy on Iraq during the Winter 1997/98 crisis over UN inspections.

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"International aid programs and donor nations, including the United States...see the development of free and financially independent media as one way to insure Kyrgyzstan's progress towards political democracy and a free market."
Free Market Tough for TV in Kyrgyzstan

by David Mould

Bishkek, Kyrgyzstan

Talgat Acirankulov is not a television station manager by profession. He's an artist. But the walls of his modest office in Bishkek, the capital of the former Soviet republic of Kyrgyzstan in Central Asia, are decorated not with his paintings but with large sheets of white paper torn from a flip board. No pastoral scenes here; the sheets are covered with lists and flow charts, with words like "strategy," "market" and "promotion" highlighted.

Acirankulov, president of New Bishkek Television (NBT), a fledgling UHF commercial TV operation, is just back from a three-day seminar on media management I conducted at a ski resort in the Tien Shan mountains, and he's anxious to apply what he's learned. "My highest priority is to write a business plan," he said to me at the seminar. "We want NBT to expand, to move into a new building, produce more programs, grow as a company. To do that we'll need investors. But no one is going to lend us money unless we've got a business plan."

Business planning is a major challenge for new commercial TV stations such as NBT, I discovered while serving as a Fulbright Senior Scholar from 1997 to 1998 in Kyrgyzstan, a small, mountainous country the size of Montana with a population of less than five million. Although my main job was to teach journalism and communications at universities, I found time to do some less formal instruction at radio and television stations all over the country. Few people working in television have any professional education in the field, and they are genuinely hungry to learn. I was asked to discuss topics I know something about such as marketing, advertising and programming--and topics I know nothing about such as financial management.

My advice, though often rudimentary, was almost always welcomed--and I learned a great deal about creating credible media in a free-wheeling environment. After all, courses on "How to make your business grow" were not on the Soviet curriculum when Acirankulov attended college.

Kyrgyzstan's transition from a remote, little-known Soviet republic into an independent state embracing free-market principles is well represented by the development of commercial television stations such as NBT. International aid programs and donor nations, including the United States, have encouraged the growth of independent media, particularly television, offering training, technical assistance and modest equipment grants. They see the development of free and financially independent media as one way to insure Kyrgyzstan's progress towards political democracy and a free market.

There are over a million viewers (perhaps as many as a million and a half) in the Chuy Valley region of northern Kyrgyzstan--essentially the Bishkek television market. Seven years ago when the country became independent, these viewers had limited choices--the two Russian networks (ORT and RTR) and the stodgy Kyrgyz government channel. The first commercial station to go on the air was Piramida, offering a mixture of Russian movies, dramas, sitcoms and sports and a smattering of syndicated American imports including M*A*S*H and LA Law. Piramida plans to launch a second channel, and the station now has four broadcast competitors, with two additional commercial TV operations expecting to go on the air this year.

"Times have we're doing better and producing programs that we want to sell, so there have to be rules and agreements."

It's doubtful whether all these stations will survive because Kyrgyzstan's economic growth is sluggish and consumer spending levels low. Acirankulov will need all his personal charm and political connections to raise money for NBT because investment capital is in short supply. Heavy government borrowing to cover budget deficits and service foreign debt has soaked up most of the available capital. Banks typically charge 60 to 70 per cent annual interest on business loans. Not surprisingly, there are few takers. Acirankulov's best chance is to find private investors or apply to one of the low-interest loan programs run by foreign governments and international agencies.

In this fragile economy, launching a new venture is risky and the business failure rate is high. Commercial television may be riskier than most ventures because it depends on advertising for income. Although the market for consumer goods is growing, many people still live near the poverty line and have little or no disposable income. Companies, unsure of the potential market for their products and services, are understandably unwilling to spend heavily on advertising.

Even when companies decide to advertise, they often know little about how to reach consumers. "Two businessmen came to buy time to advertise their new store," recalls Oleg Khoroshevski of Piramida's Bishkek commercial radio station. "I suggested early morning or late afternoon--what Americans call drive-time. But they said they wanted the commercials to air at 3:00 p.m. because that's when all their friends listened. They didn't seem to grasp the idea that they should be trying to reach consumers at the times when they listen; they want instant results. They don't understand that they need to make a long-term investment, to create an image and a niche in the market."

Despite such problems, entrepreneurs such as Acirankulov are optimistic. He points to the restaurants, import stores, supermarkets and gas stations opening in Bishkek, and to the growth of a new urban middle class. "That's our target audience," he related to me. "They're young, and they've got money to spend." NBT attempts to reach this demographic group with a twenty-something programming mix of movies, entertainment programs and music videos, brought in by satellite from Moscow's Channel 6. NBT inserts commercials, and produces some local programs--a brief nightly newscast, a weekly crime show, a movie review program and a shopping show. Acirankulov says he hopes to launch a nightly city magazine show. "But no hard news. No politics. We'll feature Bishkek nightlife--movies, music, restaurants, fashion."

As commercial television has developed in Kyrgyzstan, its professional business standards have improved. Even two or three years ago, free enterprise meant "take what you can, and put it on the air." Commercial TV stations openly pirated programs, showing bootlegged movies, recording programs off-air from other stations or downloading satellite feeds. But in Bishkek, most stations have now ceased pirating programs, and have made agreements or are negotiating contracts with legitimate syndicators. "Times have changed," Acirankulov told me. "When commercial TV began in Kyrgyzstan, no one looked on this as stealing. Stations had to pirate programs to survive. But now we're doing better and producing programs that we want to sell, so there have to be rules and agreements." Commercial TV stations which once openly pirated programs now support calls for stricter copyright laws. Acirankulov proudly shows visitors NBT's contract with Moscow's Channel 6. Soon he hopes to be able to show them a business plan too.

David Mould, Ph.D., Professor of Telecommunications at Ohio University, served as a Fulbright Senior Scholar in Kyrgyzstan in 1996-1997, teaching journalism and communications at universities and consulting with commercial radio and television stations.

Resource link: U.S. Agency for International Development, AID Information on Kyrgyzstan

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