With a population of some 160m, Nigeria has one of the most active media sectors of any emerging market. Excluding satellite networks, 147 television stations and 100 radio stations fill the country’s airwaves, according to the National Broadcasting Commission (NBC), the industry regulator. There is also a sizeable print media, as more than 100 publications circulate the country. According to the NBC, radio is the most popular medium, followed by TV.

Despite the encouraging signs, challenges to expansion remain. Among these are the high costs associated with unreliable infrastructure, including electricity outages and unrefined distribution networks, which hamper circulation. A lack of training in journalistic standards, poor compensation for reporters, as well as a newly established but ill-defined freedom of information law, can make for incomplete or inaccurate reporting. This is exacerbated by occasional government interference in the sector; Reporters Without Borders ranked Nigeria 126 of 179 countries in its 2011-12 Press Freedom Index in what was a modest improvement from its ranking of 145th in the previous year.

REGULATORY ENVIRONMENT: The NBC is responsible for licensing, monitoring and regulating broadcasting in the country. It was only in 1992, under the former military dictatorship, that the commission began granting licences to private radio broadcasters. With the transition to civilian rule in 1999, press freedom improved immensely, as the NBC adopted a more hands-off approach to regulation. Meanwhile, the print sector is overseen by the National Press Council, which monitors the press to ensure compliance with the Nigerian Union of Journalists’ Code of Professional and Ethical Conduct.

Both agencies have the power to grant and revoke licences, and order outlets comply with mass media laws. The commission may revoke a station’s licence for reasons that include a failure to allow the NBC on the station’s premises, breach of the country’s broadcasting code, and when a station institutes a new ownership structure involving new individuals without the approval of the commission.

The regulator is proactive in its oversight. In February 2012, the NBC ordered the Ogun State Television station to cease live-streaming its content on its own website, because it had not received permission to do so. In some respects, however, the NBC has tried to be more accommodating to networks.

For example, in January 2012, the NBC decreased the levy charged to broadcast stations to fund its operations from 2.5% to 1.5% of stations’ annual incomes.

RESPONDING TO CHANGE: Recently there has been talk of overhauling the country’s laws pertaining to media regulation and of merging the broadcast and telecommunications regulators, the NBC and the National Communications Commissions (NCC).

A central question is whether the laws currently in place are sufficient to regulate an increasingly interconnected media industry, where the lines between TV, radio and telecommunications are no longer clearly demarcated. In April 2012 NBC’s director-general Yomi Bolarinwa gave a presentation at the 5th IT Edge West Africa Convergence Forum in Lagos outlining market trends. “The combination of shifts in communications control and patterns is redefining the competitive landscape, giving rise to new business models,” he told the delegates.

Bolarinwa was referring to shifts within the private sector, but moves are concurrently under way to address the rapidly and drastically changing media landscape within the regulatory environment. So far the government appears to be treading carefully, particularly with regard to how new media will intermingle with digital and online communications.

There are, of course, obstacles to combining the NBC and NCC. For one, the agencies themselves are concerned about what the implications of such a merger would be. Bureaucratic turf wars exist in capitals around the world and Nigeria is no different. Concerns are particularly pertinent with regards to the regulation of the information communications technology (ICT) sector. The NBC is currently respnsible for the oversight of broadcast media, while the NCC regulates telecommunications. Given the quickly changing nature of the global media landscape, regulatory overlap is becoming more increasingly more commonplace, a phenomenon that is serving as both the impetus for, and an obstacle to, a convergence of the two regulatory authorities. Recognising the new realities of the new media landscape, Bolarinwa noted that increasingly, media content is produced by amateurs, such as blogs, YouTube, and social media sites. As such, the production of content is cheap and can originate with anyone who has access to the internet, with Bolarinwa noting, “Former consumers are now producers.”

PRINT MEDIA: Print publications in Nigeria have experienced tremendous growth in recent years, now totalling more than 100 newspapers, magazines and tabloids, but fundamental challenges remain. Chief among them is one that print media in all countries must contend with, and that is the rapid proliferation of electronic communications.

One of the difficulties in determining the print media’s ability to adapt is the lack of reliable circulation numbers. In 2010 the Advertising Association of Nigeria conducted the first, and to date only, independent study of newspaper sales in the country. In the study of 15 daily publications over the course of six weeks in March-April, total sales tallied fewer than 300,000. The Punch was found to be the top seller with 34,264 sales per day, followed by The Nation (30,578), The Sun (25,632), Vanguard (25,241), The Guardian (25,222), This Day (21,702), Daily Trust (11,672), and The Tribune (8314).

These figures have not, however, prevented a number of different publications from claiming to be the most widely read in the country. The study itself came under scrutiny, as it did not count circulation by papers sold, and instead analysed newspaper distribution centres in order to extricate this data.

Kunle Adekoya, an editor at Vanguard, told OBG that his paper has a daily circulation of between 150,000 and 200,000. He described the challenges that the print media faces, notably the rise of electronic communications, but also more fundamental issues pertaining to infrastructure. “It is expensive to do business because of the costs that come with needing power generators, and also the fact that the state of the roadways makes it difficult on delivery trucks. If these issues could be resolved, it would be a major relief,” he told OBG.

Adekoya said that the largest print advertisers are telecommunications companies, the banking sector, the oil and gas industry, and politicians. Although the continued viability of Nigeria’s print media is a legitimate question, the fact that Nigeria’s advertising market is far from oversaturated may bode well for further revenue to the sector.

MORE TRANSPARENCY: There still remains much scepticism, particularly from domestic companies as to the efficacy of advertising. However, continued growth and intensifying competition may very well prompt a battle for advertising space in newspapers, as well as all other forms of media. Improving transparency concerning key issues such as sales and circulation would support the print segment to take advantage of growth in the advertising industry and to compete effectively for adverts.

A primary hindrance to increasing advertising revenue has been the uncertainty about such vital statistics, since advertisers cannot be exactly sure about the size or demographics of the audience they are reaching. To this end, however, the Newspapers Proprietors Association of Nigeria (NPAN) has started to take the necessary steps toward collectively becoming a more open industry.

In April 2012 NPAN held a stakeholders’ conference during which Nduka Obaigbena, the president of the association, said it was imperative for the industry to collaborate in order to strengthen ties among stakeholders, and shore up the confidence of investors and advertisers. At the meeting was a contingent from the Advertisers’ Association of Nigeria, which encouraged newspaper owners to make accurate statistics available in an effort to build up investor confidence. Obaigbena noted the numerous working committees NPAN has established with the aim of not only ascertaining and releasing accurate data to the sector’s stakeholders, but to forge new ways of practising targeted marketing and corporate development in the sector.

BROADCASTING: From just a handful of broadcast stations around the time of independence in 1960, the number of terrestrial television stations has risen markedly. The liberalisation of the sector began in 1992 when the government ended the state monopoly on television broadcasts. That same year, the NBC was established by decree, and it was granted the authority to issue licences to private broadcast operators. Along with the expansion of privately owned stations, the federal and each of the 36 state governments also operate television networks.

Currently, the government-owned Nigerian Television Authority (NTA) has one of the largest geographic footprints of any broadcasting station, operating from all 36 state capitals with headquarters in the capital, and providing satellite service as far afield as Cameroon, Niger and Benin. Although there are no official figures on viewership, recent forecasts from the NTA point to roughly 50m regular viewers, an increase from an estimated 30m a decade ago albeit still down from the network’s heyday in the 1970s. Nowadays, the NTA is partially commercialised, with large advertisers from firms including telecoms providers and FMCG producers, although most funding comes through federal allocations. More recently, the agency has increased links with outside providers, licensing content to Chinese-owned pay TV operator Startimes and South Africa’s DSTV.

Previously, state television networks featured limited broadcasting hours, but the liberalisation of the sector opened the door for 24-hour programming. The subsequent expansion of airtime provided new opportunities for domestically produced shows, as well as an uptick in foreign content. In an effort to protect and facilitate talent, the NBC has required all television stations to air a minimum of 30% local content in their programming schedule.

DIGITISATION: The switch from analogue to digital TV was scheduled to occur in June 2012, but the deadline passed with many Nigerians failing to buy new TVs or digital devices. The federal government recognised the difficulty this switch is posing for the population and has moved to subsidise set-top units, which convert signals from cable or satellite so they can be played on analogue TVs. The NBC plans for an incentive programme for set-top box manufacturers, including import exemptions and tax holidays, to make the units less expensive. Without such indirect subsidies, set-top units cost approximately $50, which is out of the reach of most Nigerians. According to the NBC’s Bolarinwa, the aim is to bring the price down to under $15.

RADIO: Radio broadcasts began airing in 1933 when Nigeria was still under British rule. This long-standing medium is thought to be the current favourite among advertisers and audiences alike because it is cheapest to both access and produce content.

Like television, the radio sector was deregulated in 1992, and in less than 15 years the number of stations had doubled to around 100. Comprised of some 150 networks, the sector boasts more than 85 government-run stations, 21 private stations and at least 10 foreign broadcasting stations and university stations. These stations are as diverse as the country itself, and feature local and international hit music, news, comedy and talk. Radio programmes are broadcast in a variety of languages and dialects.

The largest and most influential radio station is the Federal Radio Corporation of Nigeria, which possesses the only national broadcast licence, and has a network of 32 stations across the country. As with TV, the NBC licences and oversees all radio stations, and has the power to impose sanctions. Since a radio licence can cost upwards of $150,000, the emergence of independent radio stations is largely stifled.

CINEMA: Nigeria’s fledgling yet already thriving film industry has been a tour de force in the country’s entertainment world. Known as Nollywood, the sector produced some 2000 films across a variety of genres in 2011. A typical Nollywood film is shot in less than two weeks, has as little as a 10-person crew and a budget of between $10,000 and $15,000.

Nollywood is the world’s second-largest film industry in terms of volume, behind only Bollywood, and is the third-largest film in terms of profits, behind Hollywood and Bollywood, respectively. Although estimates on the profits generated by the industry vary, it is generally agreed that the sector generates between $250m and $600m per year (see analysis).

The vast majority of Nollywood films go directly to DVD, which is by far the most popular means of distribution. While cinema attendance for foreign movies is on the rise, spectator numbers for Nollywood productions remain low, even in urban areas where most cinemas are located, but where congested roads also tend to discourage nonessential travel. The DVD market is highly vulnerable to piracy, with the sector estimated to lose as much as 50% of profits to the sale of pirated copies. But despite this, the Nollywood model is not only working, it has been staggeringly successful. The international popularity of Nollywood films – which have a strong following across Africa as well as the Caribbean and parts of Asia – may be one of the strengths helping to counteract some of the domestic losses.

ONLINE MEDIA: As of June 2011, internet penetration was estimated at around 11%, but it was projected to treble by June 2013. Although increased computer usage will continue to play a role in the proliferation of online access, mobile phones have been a primary driver in connecting more Nigerians to the internet. As a more affordable means of getting online, mobile phones have leapfrogged the personal computer in a number of developing markets. The majority of internet users are a combination of urban, young, educated and professional.

Just as is the case in other markets around the world, both developed and emerging, the rise of this new media is threatening to undercut the longstanding and privileged positions held by more traditional forms of media. Although television is likely to remain secure as the (arguably) second most popular medium, its impact may be blunted as more Nigerians take to the internet to view video and other forms of content on their own time.

However, as elsewhere, the print media is the forum most likely to be adversely impacted by the expansion of internet access. Indeed, all of the country’s major newspapers have online versions, following the trend established by Western newspapers. The question now is not whether The Punch, or Vanguard, or The Nation will continue to exist, but whether or not they will continue to exist in print form. Even if the answer is in the negative, Nigeria’s most popular print publications have already shown a willingness to adapt and cater to a growing online audience, which bodes well for their continued success in a growing media space.

SOCIAL MEDIA: The impact of social media has also been growing, and has been illustrated in recent events. When the federal government attempted to end the country’s fuel subsidy in January 2012, causing prices at the pump to double overnight, many Nigerians protested and unions held a nationwide general strike. Protesters took pictures of the demonstrations and shared them on social media such as Twitter and Facebook, where demonstrators coordinated their efforts and encouraged people to “Occupy Nigeria”, in a nod to the American movement that had been protesting the financial sector.

The prospects for growth in the online media sector are numerous. Given that the preferred means of accessing the internet is via mobile phone, telecommunications firms are in a prime position to continue capitalising on this already flourishing market. Nigeria has the largest cellular phone market in Africa, with an estimated 90m people in the country having mobile phone access. Among internet users under the age of 30, the preferred means of accessing the web is with mobile phones.

OUTLOOK: As more Nigerians gradually partake in the country’s economic successes, the emergence of a vibrant middle class will have profound implications for the media sector. The dramatic rise of Nollywood in the past decade has spurred global interest from viewing audiences and investors alike, and the industry is poised to be a major force both domestically and internationally. Meanwhile, online media is becoming increasingly popular as the number of people with internet access rises, especially in urban areas and among younger demographics.

Challenges remain, however, and these vary depending on the medium in question. Print newspapers in particular face several obstacles, such as the growing number of Nigerians who prefer to read the news online, and the lack of accurate data on sales, circulation and distribution, which does not augur well for investor and advertiser confidence. An overdependence on advertising revenues – as high as 90% of profits – may prove problematic, and, there remains a degree of uncertainty concerning Nigeria’s regulatory environment with respect to broadcast and online media. A potential merger of the NBC and the NCC is still uncertain, and questions remain on the potential implications for broadcast media. The NBC’s lowering of the yearly fee it requires of broadcasters was welcome development, and the commission has shown a general willingness to be more accommodating of broadcasters in an effort to encourage further sector growth and development.