A young, tech-savvy population with rising incomes and a receptivity to new ideas makes today’s Turkish media audience a desirable market for investors. A 2011 report by global consultants PwC suggested that by the end of 2015, Turkish entertainment and media would be worth roughly $11.4bn, with annual growth rates averaging 13.2% over the 2011-15 period. In line with these high expectations, several overseas partnerships in TV and online media have developed, and traditional print and radio continue to see steady growth. Media outfits are expanding onto new platforms and forming new ventures with hardware providers, gaining a competitive edge in the global arena.

RULES & REGULATIONS: Broadcast is regulated by the state’s Radio and Television Supreme Council (RTÜK), made up of nine members elected by parliament. It retains independence in administering and enforcing national broadcasting laws. However, state-owned Turkish Radio and Television (TRT) is governed by a separate, public broadcasting law. The Directorate General of Press and Information, governed by the prime minister’s office, oversees print media and is responsible for accrediting journalists, monitoring foreign and national press, and liaising between the state and print media. The sector also has several professional bodies, which include the Turkish Press Council, a print self-regulator; a number of journalist associations and federations, often with political or religious affiliations; and two trades unions – the Union of Journalists in Turkey and the Media Union. The telecommunications sector is overseen by a number of groups, including the government’s Information and Communication Technologies Authority (BTK), which regulates the internet and mobile communications. BTK also liaises with the Ministry of Transportation, Communication and Maritime Affairs about the layout of communications lines. Meanwhile, the Communications High Council is a high-level ministerial and national security body that reviews and approves state communications policy. Türk Telekom (TT), a state telecommunications provider privatised in 2005, is still seen by many as a state entity. TT captures about 84% of the market in internet provision and is the main fixed-line telephone operator. Since privatisation, TT’s cable TV division has been run by Turksat.

NEW MEDIA LAW: In March 2011 a new media law came into effect, bringing necessary changes and adopting several EU requirements as part of Turkey’s bid for EU accession. The new law also aimed to resolve a dispute between RTÜK and private TV stations over frequency allocation. When the state’s broadcasting monopoly was ended in 1993, growing competition and disputes between sector players ensued. The government sought to control tension by restricting licensing, giving broadcasters only temporary permits.

A 2002 amendment to the law made 23 of these licences permanent, but new licences could not be awarded. In 2011 Law 6112 was enacted so as to reopen the market. Under the law, RTÜK retains control of frequency allocation and the BTK administers frequency planning. The law’s advances have generated more interest among investors, and is expected to open Turkish media to further foreign involvement.

OWNERSHIP RULES: The new law raises the foreign ownership cap from 25% to 50% of paid-in capital and allows direct stakes in two entities with no restrictions on indirect ownership. Domestic investors are limited to stakes in a maximum of four firms with terrestrial broadcast licences. To boost competition and reduce the influence of monopolies, annual advertising revenues from these holdings cannot exceed 30% of the industry total. Further, the law brings all platform, multiplex and transmission operators under its remit and requires that entities dealing with signal transmission and dissemination be independent of media companies, although under certain circumstances they may hold stakes in these operators. Another stipulation is the transition from analogue to digital by March 2013.

Most controversially, however, the new law extends the number and type of sanctions that can be imposed in cases of regulation violation. It also gives the prime minister, or any second minister authorised by him or her, the power to temporarily ban any broadcast if it is deemed a threat to national security or leads to the serious impairment of social order. This power, however, is subject to judicial review, and the BTK has been tasked with making sure the law matches EU specifications regarding spectrum management, authorisation, access and interconnectivity, number portability and allocation, rights of way and tariffs.

Criticism of the law focuses on a number of issues, including the switch to digital broadcasting, which sets an imperative but leaves a number of technical issues unresolved, such as potential subsidies for set-top box purchases. Industry players are also concerned that the law has given the government too much authority over content with the prime minister’s broadcast ban. Still, the law provides a framework for greater competition, with hopes that it will also sort out the longstanding licensing and frequency-allocation dispute.

SECTOR PLAYERS: Despite some challenges in recent years, Turkey’s largest media conglomerate is the Doğan Group. The group owns five daily national newspapers – Hürriyet, Posta, Radikal, Fanatik, and the English-language Hürriyet Daily News. The group owns two national TV stations and three radio stations. It maintains an international reach through its Türksat satellite system, a digital television subscription service; a news agency; a publishing house, retail stores; a cinema production company; and various joint ventures and partnerships in Romania, Germany and Italy.

Doğan’s biggest competitor is Feza Group, popularly associated with the Gülen movement, an international civic organisation led by the Islamic theologian, Fetullah Gülen. Feza publishes two daily newspapers: Zaman and the English-daily, Today’s Zaman, the former being Turkey’s highest-circulating paper. It too enjoys global distribution, reaching audiences from the US to Kyrgyzstan. Feza owns the Cihan news agency; a weekly magazine, Aksiyon; and has a partnership with the Samanyolu TV Group, also associated with Gülen.

COMPETITION: Albayrak Group, another major player, owns the daily Yeni Şafak and TVNET news channel.

Çukurova Holding owns three daily newspapers, a magazine and two TV channels. It also owns Digiturk, a satellite TV provider, and Turkcell, the leading mobile phone network. Turkuvaz Group, part of Çalık Holding, is significant in the print segment and owns the Izmir-based Yeni Asır, four other dailies and five weeklies, along with the ATV-Sabah TV channel. Turkish businessmen Erdoğan Demirören and Ali Karacan partnered together and entered the print field, acquiring two dailies, Milliyet and Vatan, from Doğan in early 2012.

In TV broadcasting, Doğuş Media Group owns channel NTV, which recently bought Star TV from Doğan and enjoys partnerships with CNBC, National Geographic, NBA, Billboard and Virgin. Ciner Holding owns the Habertürk umbrella, which includes TV, radio and online news channels. It has partnered with international business and finance market news provider Bloomberg to launch BloombergHT, a 24-hour real-time financial news channel in Turkish. It also publishes the Turkish-language editions of Marie Claire and Maison.

Prior to becoming a holding, the İhlas Group operated the newspaper Türkiye. İhlas then expanded into TV with TGRT News Television. The company went global with the İhlas News Agency, which has offices in Washington DC, London, Berlin and Paris, and provides outlet services to a variety of international media groups.

ATTENTIVE CROWD: According to the Turkish Statistical Institute, 97.3% of adult males and 88.1% of adult females were literate in 2010. That same year, the Turkish Economic and Social Studies Foundation showed that 40% of Turks (about 30m individuals) read a newspaper regularly, while 90% watched TV on a regular basis.

Turkey scores highly compared to its European peers in terms of internet usage. A June 2011 survey by ComScore, a digital analytics firm, showed Europeans averaging 26.1 hours per person per month online, while in Turkey the figure was 31.1 hours. Internet penetration in Turkey has risen rapidly. The International Telecommunications Union (ITU) shows fixed internet subscriptions at 7.2m in 2010, up from 1.5m in 2000. Internet usage rose from 3.8% to 39.8% of the population over the same period, with 37.4% of individuals having access at home. In 2010 there were 61.8m mobile phone subscriptions, a penetration rate of 84.9%.

The highest-circulating newspaper in February 2012 was Zaman, with 948,000 copies sold during February 20-26. Doğan’s Posta followed with 466,000 copies, and Hürriyet with 416,000. Next was Turkuvaz’s Sabah, with 344,000 copies and Ciner’s Habertürk with 240,000.

Certain distribution bottlenecks have raised questions about the accuracy of circulation figures. Three distribution companies dominate the market: Doğan’s Yaysat; Turkuvaz’s Turkuvaz Dağıtım Pazarlama; and Cihan Dağıtım. As these distributors are not publicly traded, the only figures are their own measurements. This has lead some advertisers to believe that circulation numbers are inflated to boost revenues.

RATINGS GAME: Kanal D boasts the most-watched TV programmes in Turkey, including the top drama, Arka Sokaklar, with 10.8m viewers. The channel also has the most popular newscast, with veteran journalist Mehmet Ali Birand’s evening programme capturing 6.9m viewers. Fox, Show TV and ATV also have high ratings, with their most popular programmes drawing audiences of 7.4m, 4.8m and 4.6m, respectively. Despite the numerous TV channels, Ahmet Mücahid Ören, the chairman of İhlas Holding, believes quality is an issue. “Turkey needs TV with better content, variety and creativity. Players that explore these opportunities will benefit greatly,” Ören told OBG. “The 2012 licensing for digital channels will likely lead to consolidation.” Online, ComScore found two Turkish sites among Europe’s top 10 online newspapers in terms of hits. These were Hürriyet.com, with 9.45m unique visitors and Milliyet.com, with 8.8m in June 2011. The former site belongs to the Doğan Group, while the latter was recently acquired by Karacan and Demirören. In June 2011, eight Turkish national newspapers were running iPad applications, demonstrating the growing importance of multi-platform online presence (see analysis).

CENSORSHIP CONCERNS: In recent years, concern has grown over the treatment of journalists and the perceived state censorship of criticism. According to the Turkish Journalists Union, 95 Turkish journalists are currently incarcerated and awaiting trial. In 2006 Turkey ranked 98th globally in the Reporters Without Borders Press Freedom Index, and that number has fallen sharply, to 148 out of 178 in 2011. The government downplayed the issue, claiming that journalists were jailed for ties to terrorist organisations and not because of their profession; but critics point to the broad definition of terrorism under the Turkish penal code as part of the problem. However, in a move that was highly applauded at home and abroad, two prominent imprisoned journalists, Ahmet Şık and Nedim Şener, were released on March 12, 2012 after over a year in jail.

OUTLOOK: New regulations and technological developments changing access to media are evidence of a significant sector transformation. Traditional walls between TV, internet, print and telephony are coming down fast, and this demands a response from established industry players. Like other developed markets, the sector must address how to best monetise new platforms and bolster audience bases. International and domestic firms are just beginning to tap into the major market for Turkish-language broadcasts, including those beyond Turkey’s borders. The media landscape is becoming more liberal in terms of issues it can address, and despite the continued plight of journalists, 2011 was a year of unprecedented public criticism of the military. As the sector continues to contend with a number of challenges, expectations for progress remain high as regulations evolve and investment levels rise.