AudiencScapes

The KBC will split into two companies in a bid to balance its books and regain its audience.

By Dinfin Mulupi

Next month, Kenya’s state-owned media house, the Kenya Broadcasting Corporation (http://www.kbc.co.ke), will be split into two entities, one private and one public. The move is intended to help KBC compete in the liberalized media sector and tackle the huge debts that threaten to bring the media house to its knees.

For years, KBC has been considered a government mouthpiece and its public trust has been waning fast in an increasingly competitive media environment. During the reign of former President Daniel arap Moi, KBC opened each broadcast with a segment on what the president had been doing that day. When President Mwai Kibaki took office in 2002, KBC became more objective, but the public’s perceptions about the station have not changed.

The Permanent Secretary in the Ministry of Information and Communication, Dr. Bitange Ndemo, said the move to split the public service broadcaster is a strategy to make the corporation “more competitive while at the same time protecting its mandate of informing the public without the headache of pursuing profits.”

A New Dawn for KBC?

Ndemo said the split will bring in a commercial wing, free of debt, which is expected to draw private financing from banks and the capital markets. “Nobody can pay the debts KBC has at the moment apart from the government, but by delinking the commercial from the public we are looking at a long term solution of making the corporation financially independent,” Ndemo said.

KBC controls broadcasting in English, Swahili and nearly 20 local languages. Three FM radio stations -- Coro, Pwani and Metro FM – will be transferred to the commercial unit. According to Ndemo, they experienced “a poor run since advertising revenues are eaten up by the non-commercial channels.”

The financial woes of KBC date back to 1991, when it began an ambitious plan to upgrade medium-wave transmitting stations and construct new ones. KBC has been reeling under huge debts, estimated at about 20 billion shillings, owed to a Japanese company for equipment purchased 20 years ago, and which has since accrued interest due to delayed payment. Last year, the Assistant Minister for Information and Communication, Geroge Khaniri, said KBC was “technically insolvent.”

The corporation was hoping to pay its debts from the collection of a mandatory 1,000-shilling fee for television permits that it used to levy on television owners. With the liberalization of the media industry, however, KBC has been unable to pay its debts. The government was forced to guarantee KBC’s debt at an estimated total of 5.2 billion shillings, which it expects KBC to repay with interest.

Public Trust and Post-election Violence

A report commissioned by the BBC on the violence following Kenya’s 2007 elections issued harsh words for KBC’s role as a public broadcaster. While not citing KBC by name, the report, titled “The Kenyan 2007 elections and their aftermath: the role of media and communication”, stated “There is no independent public service broadcaster in Kenya. If there had been, the scale of the violence and of the crisis may well have been much less severe.” While it was possible for KBC to have a truly national audience because it covers the whole country, the report concluded that the national broadcaster failed in 2007-8 because “it was not equipped to be a reliable source of information since few of its audience considered it to be so.”

KBC has been trying to change the public’s perception toward its programming. In June, its television station, KBC-TV, unveiled a new look in an effort to bring in more viewers and woo advertisers. Under the tagline "Kenya is Watching", the corporation's then-Managing Director David Waweru described the transformation “as a rebirth for the station and an obligation to change with the times.”

Scandals

Shortly after the launch of the new television look, however, KBC was embroiled in a World Cup broadcasting rights scandal that has led to the ouster of its managing director. KBC had been given 75 million shillings in public funds to buy the rights to broadcast the World Cup. It was expected to recover the money through advertising. KBC allegedly invited bids informally but rejected more competitive offers from other broadcasters and instead exclusively sub-contracted World Cup television rights to Radio Africa Ltd.

Whether KBC can overcome scandals, debt and its reputation to become a trusted national broadcaster is an open question.

Will the Split Restore the Public’s Confidence?

According to Joe Otin, the Media Research and Monitoring Director at research firm Synovate Pan Africa, KBC will need a strong strategy to build the confidence of the public. Much of this depends on the content the broadcaster will air. He said that, by improving its standing in urban and rural audiences, KBC will draw in advertisers and thereby create revenue to offset its outstanding debts.

Otin believes that all is not lost for the broadcaster in its quest to regain its former “national broadcaster” status. He said: “KBC is still a strong brand owing to its expansive network countrywide. It also still controls considerable audiences in the rural areas. However, to get patronage from urban audiences they will have to work hard to get rid of the ‘government mouthpiece’ perception, and this will mostly be reflected on content aired.”

Dinfin Mulupi is a business journalist based in Nairobi, Kenya. She is currently the East Africa corresp for an online business paper based in Cape Town in South Africa.
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