TV business trends: a wave of Kazakh content is entering the market

Talk about the imminent death of television, which will not withstand the onslaught of the internet, began more than ten years ago. The standard arguments used by TV skeptics boil down to the following. For various reasons, the young audience prefers online formats, followed by budgets and production.

In recent years, both in large and small markets (like Kazakhstan), TV is on the rise. The market remains in a growth phase, even with increasing competition from modern electronic formats, whether it be online cinemas and streaming or YouTube content producers.

The first factor to consider is money. According to the commission of experts of the Advertising Association of Central Asia (AACA), in the first quarter of 2023, the volume of advertising on Kazakhstani television increased by 2% and reached $13.3 million year-on-year. A positive trend for the industry is also confirmed by our data: the IMS sales house, which sells advertising on several platforms including Channel 7, indicates that the market growth rates are about in line with these figures. We traditionally expect higher dynamics by the fourth quarter, when about 60% of the total annual advertising turnover is sold. For comparison: according to the estimates of the AACA, advertising on TV accounted for $79.6 million in 2022, which is 5% more than a year earlier.

The problems associated with the distribution of goods advertised on television that began in the spring of last year have been mostly eliminated. Companies have fixed their supply chains and returned to the advertising market with budgets. We are seeing a recovery in business activity across all customer groups. The automobile sector is perhaps the only exception here because it is still struggling with problems in its supply chain.

The arrival of new players in the market has added optimism. First of all, these are bookmakers. First, they came to outdoor advertising; now they have reached TV. The most active teams on channels, who keep their eyes on new trends, are already preparing joint projects with bookmakers.

There are also clients that are more traditional for the Kazakhstani advertising market but in new formats like branded content. For example, in conjunction with Coca-Cola, Channel 7 has launched a culinary show called Conversation with Taste. We’re going to go further in this direction with both Coca-Cola and other advertisers. This is a more complex product than direct advertising, but we see that it is very promising, as the market is finally ready for such formats. A few years ago, this was not possible.

However, it’s too early to write off direct advertising. Channel 7 has registered an increase in demand for Kazakh-language advertising. This trend is driven by the growing number of young viewers, those who, according to skeptics, have already said goodbye to TV.

This is a point when we have to look at demand features. Our audience chooses the Russian language when it watches Hollywood films or TV series produced in Russia or Ukraine. On the other hand, people prefer to watch Turkish, Korean, and, of course, Kazakh TV series in Kazakh. There are lots of new TV series and shows in Kazakh, even though several years ago many of them were considered unwanted for our market. We see that the interest in TV shows in Kazakh like Kyzdar Ay, Battle Soz and Zhuldydy Shanyraqta is constantly growing.

The government is also taking an active part in this. Thanks to grants from the state, Channel 7 made two TV series in Kazakh at the beginning of this year and is preparing to make two more. There is no doubt that such financial injections will significantly raise the level of content produced by the industry as a whole.

In the short term, Kazakh-language content will continue to grow rapidly, as the demand for it is still not satisfied. As the quantity and quality of Kazakh-language content grows, it will eventually replace foreign TV shows and TV series. This is the market that the key players in the TV industry will focus on. The competition there will only intensify. The TV format is definitely not going to die.

TV in pocket

Media and entertainment is one of the new directions in the telecom industry. All three Kazakhstani mobile operators have launched mobile applications for watching video content, including movies and TV shows.

With this background, Kazakhstan’s TV and film market is experiencing difficulties. The official statistics of the Republic of Kazakhstan reported a decline in the volume of «services for the creation of shows and television and radio broadcasting» from $264.7 million in 2020 to $197.3 million last year. At the same time, market participants themselves do not confirm this trend: according to their estimates, the volume of production is growing, although at a moderate pace so far.

Two years ago, market experts predicted that IPTV would replace the traditional format. However, according to official statistics, the share of households consuming TV services based on IPTV has decreased over the past five years. In 2018, the share of households consuming TV based on IPTV was 10.4% and 6.5% as of the end of last year. On the other hand, the popularity of cable television grew from 28.6% in 2018 to 46.3% in 2022.