Barriers to entry in the Malawian Media
Written by Tiyamike Kathewera

The media in Malawi, like many other countries, is affected by a number of challenges that act as barriers to entry for aspiring entrants. Due to such barriers relatively new media houses find it very difficult to penetrate the country’s media.

This paper discusses some of the barriers to entry in the Malawian media and how they have shaped the local media over the years. Discussion will be focused on factors like regulation, high fixed costs, market power of existing firms and loyalty.

To begin with, it is important to allude to the fact that liberised Malawian media is new to the country just like democracy also is. With the advent of democracy the country had to quickly adopt a new constitution which also clearly stipulated the extent to which the media can report on a number of issues. To ensure that there is conformity to the law on the part of the media, Malawi Communications Regulatory Authority (MACRA) was instituted. One of MACRA’s responsibilities is to regulate entrance of new media practitioners into the market. It is mandated to issue licences to companies wishing to join the media in the country. However, the licence fees that MACRA charges to these aspiring entrants tend to be prohibitive. For example, to operate a national radio station one has to pay a licence fee of $5,000. This charge translates to seven thousand Kwacha in the local currency. This is a prohibitive amount and it impinges on otherwise companies with brilliant ideas and bright prospects from entering the country’s media industry. The result of this becomes a media industry saturated with the elite of the country as enablers of the industry. Often times the media in such an environment serves the interests of these few privileged groups.

MACRA’s strict regulation of new media entrants has had a retrospective effect especially on the part of broadcasting in the country. To get a private broadcasting licence in Malawi is very difficult due to that fact that MACRA has to first advertise for a frequency. Apart from that there is less commitment on the part of MACRA to grant private radio broadcasting licences. It is relatively easier for community radio stations as well as religious stations to be granted broadcasting licences than the same to be granted to other private radio stations with other interests like politics. This leaves the country with seven religious radio stations, five other privately owned radio stations and a host of community radio stations. Consumers are therefore left with little choice of their preference as far as radio listenership is involved.


Another barrier to entry in the Malawian media is high fixed costs. Any form of the media be it print or electronic media requires heavy investment. This is so because operational equipment is generally priced so high. For example, it is believed that a single printing press costs a minimum 50million Kwacha. For a new newspaper willing to join the market it is relatively impossible for it to source such an amount of money to buy that very important equipment. As a result of this many promising print houses fail to establish themselves in the local media. This is not helped at all with the fact that alternative private printing houses offer services at a higher cost especially in the long run.

Fixed costs also come in the form of salaries and wages for staff. As a new media house there is no or little income to pay staff workers in the event that the company wants to roll into business. As economics suggests, there are negative returns to investment at the inception of a business as a company registers no profits. This is despite the company having to pay for its fixed costs like rent and other bills as well as wages and salaries. This again forces many determined businesses to miss out in joining the media industry in the country. As a result of this the country continues to register a fewer number of media houses. For example, for quite a long time now Malawi only has two daily newspapers.

Market power of existing firms also stands as a barrier to entry in the Malawian media. The country’s media is full of well established and stable firms that act as a threat to those wishing to join in. it is an open secret that the media strives mainly on revenue sourced from advertising. Advertisers are in most cases unwilling to place their adverts in an untested media with an uncertain audience. Advertisers are attracted to a media firm mainly because that firm has proven to have a definite audience. New firms therefore are sidelined in the process of selecting the right media in which advertisers choose to advertise in. As already articulated this strangulates the new firms because, as compared with existing firms, they are left to compete with those already existing and well established firms.

The market power of existing firms also extends to the point of loyalty on the part on consumers who are the audience. By association some consumers pledge their allegiance to a particular media house at the expense of other equally competent firms. For example, some newspaper readers prefer reading Malawi News during the weekend. When another newspaper is introduced into the market they would not bother to switch their allegiance to the new paper. In simple terms such kind of consumers will not provide audience to that new paper. This, as earlier said, has a negative connotation as advertisers only look for a media house with a larger audience. This over the past years has managed to limit the number of firms that join the media and those as well that manage to survive heat in the industry.






Reference:
MSI Africa (2006-2007). Media sustainability Index Malawi. Available: http//www.irex.org.programs/MSI_Africa/Malawi.asp. Accessed:17/05/2009