No. 10, Spring/Summer 2003
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"Glocalization" - a Case History: Commercial Partnerships and Cooperation between Turkish and American Satellite Broadcasters

By Dilruba Çatalbas

At the beginning of the new millennium communication scholarship seems to be facing challenging times. For long years since the founding studies in the 1930s in the USA, mass communication research has remained to a large extent national in its scope and ambitions. Thinking at the domestic level made sense during the years when the objects of the research themselves, i.e. newspapers, radio, and later television, were organized as national businesses, producing national content aimed at national audiences. It was quite commonplace to talk about national idiosyncrasies when it came to explaining dissimilarities between media systems of different countries.

Since the 1980s, due to the rapid development of new technologies and deregulation and privatization policies, there have been phenomenal changes in mass media systems in most parts of the world, blurring the boundaries of once well established 'national' territories of communication scholarship. Emerging media environments seem to be shaped, more than ever, by market forces with increasingly global outlook. As a result, international business transactions in media sectors are no longer limited to transfer of technology and flow of news and programs. Large media corporations today seem eager to acquire shares in foreign media markets and launch joint ventures with local companies, creating, in some cases, the kinds of media outlets which are difficult to categorize as national or local in opposition to foreign or global.

In Turkey, CNN TÜRK and CNBC-e television channels and NTVMSNBC Internet portal can be seen as examples of these outlets, which possess dual personality. Under a well-known global brand they broadcast differing amounts of local content in Turkish. CNN TÜRK is a joint venture between Dogan Group, the leading media conglomerate in Turkey, and Turner Broadcasting of American media giant AOL Time Warner. CNBC-e is an economy channel, created by a franchising agreement between Dogus Group and CNBC Europe, a joint venture between NBC and Dow Jones. On the one hand, CNN TÜRK and CNBC-e point to the global aspirations of American corporations while, on the other, they demonstrate the enthusiasm of local entrepreneurs to benefit from a strong foreign partner operating on a global basis.

This paper sets out to investigate the various ways in which Turkish and American media interests have joined forces together since the late 1990s. It will focus on CNN TÜRK and CNBC-e in order to reveal how and with what motives and expectations local and global interact and co-operate. It examines the benefits that local companies and their international partners are seeking to attain as '(f)or a joint venture to come into being each partner must feel that the benefits to co-operation will exceed the costs' (Contractor and Lorange, 1988, quoted in Hoskins, McFadyen, Finn 1999). In doing so, it will also introduce the structural and legal changes in electronic media sectors in Turkey since 1990s.

Globalization of the Media Marketplace

Powerful economic, political, and technological forces giving shape to media and communication industries since the 1980s have accomplished significant transformations at both national and international levels. At the national level, broadcasting monopolies, which survived until the 1980s, were demolished and telecommunications were, at least partly, privatized. New entrepreneurs were allowed to enter terrestrial, satellite and cable broadcasting markets. This led to the proliferation of media outlets and the fragmentation of the viewers, rendering competition and commercialization the most distinctive features of the emerging media markets.

The growing economic and industrial significance of the media, communication, and information industries encouraged companies functioning in these sectors to integrate and concentrate. Murdoch, Berlusconi, and Bertelsmann emerged as powerful players in Europe, while there was a series of mergers and acquisitions such as that of NBC by GE, ABC by Disney, and CNN by Time Warner in the USA.

The global markets came to be dominated by a handful of North American, Western European, and Japanese corporations (Bagdikian, 1990). The global trends for privatization and liberalization of the media and communication industries helped remove the obstacles preventing giant multi-nationals from entering the formerly protected fields of broadcasting and telecommunications. By the turn of the century, imminent convergence and digitalization of media and information technologies and the growing penetration of the World-Wide Web have further contributed to the economic value generated by those industries, increasing the appetite of global players for a share in foreign markets.

Glocalization of Production, Marketing, and Distribution

Relentless pursuit of higher profits and gains from corporate expansion forced media and information-based companies to seek opportunities abroad. Media regulation, in particular foreign investment rules and regulations, has become a form of negotiated battle between the forces of globalization and the nation states (Morris and Waisbord, 2001). However, crossing boundaries involved serious risks. Global operators had to 'negotiate, and come to terms with particular local context, conditions and constraints, they also needed local expertise and resources' (Robins, 1997).

Corporate strategies for minimizing risks and maximizing profits led media companies operating globally to form international alignments mostly in the form of joint ventures, tie-in relations, or long-term contractual linkages. In these ways, not only were they able to market their products to a multiplicity of audiences as widely dispersed as possible, thus benefiting from economies of scale, but also to customize their offerings locally, thus benefiting from economies of scope (Aksoy, 1992). Marion Banks suggested that joint ventures or co-production deals were survival strategies for small local entities, which had to compete with the lower unit costs of the larger players. Banks argued that business strategies of information and communication companies required fusion of small entities (businesses, regions, countries) with larger players. This, as well as joint ventures, helped them spread risks and reach a larger market (Banks, 1992).

Global companies, adapting their offerings and operations to local conditions, are seen as an important dimension of 'glocalization,' a management jargon term of Japanese origin. Glocalization refers to both the localization processes taking place on the global scale and the adaptation of a global outlook to local conditions and markets (Robertson, 1995). 'While McDonalds serves up the same burgers everywhere and Procter&Gamble sells soap under variety of names, MTV combines a global presence and a single global brand with a product designed for separate regional markets. 'The container's the same' says chair Tom Freston. 'The contents are different' (Levinson, 1995). In the 2000s, 'think globally, act locally' seems to be the motto of global media companies.

Changes in the Electronic Media System in Turkey

The transformation of electronic media sectors in Turkey in the 1990s was preceded by remarkable improvements in the telecommunication industries in the previous decade. Turkish governments, which began to implement liberal free market policies in the early 1980s, endorsed substantial development projects in an attempt to improve the country's telecommunications infrastructure, which had remained noticeably inferior to that of her NATO allies in the 1970s. As a result, in addition to the enhancement of conventional services, various new technologies, such as mobile phones, teletext, videotext, cable and satellite communications, and electronic banking became widely available. In the 1980s, there was widespread consensus in both political and economic circles that Turkey needed reliable and sophisticated communications structures to attract foreign investors.

By the late 1980s, the progress achieved in telecommunications was overshadowed by a speedy expansion in electronic media thanks to the efforts of TRT, the Turkish public broadcaster, in launching several new television channels and exploiting satellite technology. Following the introduction of color broadcasting in 1982 and the inauguration of the second channel on 6 October 1986, TRT launched, on 2 November 1989, TRT-GAP, to this day, its only regional service aimed at the southeastern provinces. On 10 October 1989, TRT-3 began its regular transmissions to three major cities, Ankara, Istanbul and Izmir. On 28 February 1990, TRT-Int, aimed at Turkish communities living in Western Europe, particularly in Germany, was on the air. TRT-Int was followed by TRT-4 on 31 June 1990. In two years, the coverage area of TRT-Int was expanded to include the newly independent Central Asian republics and the service was renamed as TRT-Avrasya (Eurasia), which became an independent channel on 12 April 1993. In a matter of a few years these satellite ventures elevated TRT to the league of major transnational broadcasters in terms of its geographical reach. At the beginning of the 1990s, Turkey, exhausted by the discouraging attitude of the European Union regarding her full membership, was in search of new alliances. The newly independent states of Central Asia, where most people speak Turkic languages, were, seen as a natural area of expansion and there was considerable enthusiasm to develop political, commercial, and cultural links with them. The same incentive was also evident in PTT's endeavor at the beginning of the 1990s to launch the first-ever Turkish satellite, TÜRKSAT, by 1994. It was planned that TÜRKSAT, which would provide opportunities for television transmissions as well as other high-speed data, telephone, fax, and telex traffic, should be used for telecommunications and broadcasting links with the Central Asian republics.

However the forces that made the 1990s truly revolutionary years for the Turkish electronic media were private broadcasters who beamed their signals from various Western European countries, effectively demolishing the state monopoly over broadcasting. Private satellite channels that followed the example of Star, the first ever Turkish-language private channel, which started to broadcast on 1 March 1990 from Germany, transformed the sixty-year-old state monopoly into a burgeoning commercial system. By November 1994, there were 372 television, and more than 1,500 radio, stations in Turkey. (1)

The explosive proliferation of commercial media in Turkey was facilitated by a number of social factors. First, in accordance with the political spirit of the 1990s, which aimed to eliminate the anti-democratic residues of the 1980 military coup, the climate of public opinion was receptive to, and in favor of, privatization of broadcasting. The traditional strong state control of broadcasting had led to calls for a more liberal and democratic broadcasting system. Moreover, the rapid take-up of private channels revealed the consumer dissatisfaction with the TRT services. Although it provided a mixed programming schedule with an emphasis on entertainment, TRT maintained a distinctly paternalistic and elitist approach to its programming and observed strict codes that sometimes amounted to censorship (Çatalbas 2000). With the arrival of private channels, it became clear that TRT's program policy would be its Achilles' heel in a fiercely competitive commercial environment. The screens of private media were filled with everything TRT always tried to ration and regulate and there was a mass exodus of the audience to commercial screens.

By 2000, there were 16 national, 15 regional, and 229 local television stations in Turkey. Out of 1200 radio stations, 30 were broadcasting nationally, while 108 were regional and 1062 were local. Among the national television stations, the largest four, namely Star, Show TV, ATV, and Kanal D, attracted around 70% of the audience and received around 90 percent of advertising expenditure for television. (2) The down-market majority programming strategy implemented by the major commercial broadcasters alienated certain sections of the population, including well-educated, cosmopolitan, middle-class professionals. This created niche consumer markets, which could be exploited for their up-market advertising potential. From the late 1990s onwards, there were some new channels like NTV and CNN TÜRK (both 24-hour news networks) and CNBC-e (primarily a financial news and entertainment broadcaster) that started to cater for those niches with quality news and analysis as well as popular foreign-language, particularly American, programming, mostly with Turkish subtitles.

Changes in the Legal Framework

From the launch of the first satellite station in 1990 to the abolition of the state monopoly by a constitutional amendment on 8 July 1993, private media in Turkey had no legal basis. The outcome of the legal vacuum was total chaos on the airwaves and confusion in judicial matters. Many Turkish politicians explained the situation with the advances in satellite technology by arguing that "the law was defeated by technology." After three-and-a-half-year-long parliamentary proceedings and in the midst of intensive speculations and lobbying attempts by private media interests, the new broadcasting law, No. 3984, was finally adopted on 13 April 1994.

In accordance with Law No. 3984, the 'Radio and Television High Council' of the 1980s was replaced by a 'Radio and Television Supreme Board' with considerably greater powers. From the day of its inception, the composition of the regulatory body was subjected to severe criticism. Law No. 3984 asserted that the Supreme Board would be composed of nine members, five of whom would be chosen from among the ten candidates put forward by the government while the remaining four would be chosen from among eight candidates determined by the opposition parties. This scheme, which did not incorporate other democratic institutions, was objected to on the grounds of political interference and favoritism. Another bone of contention concerning the Supreme Board was its method of funding. Law No. 3984 demanded that TRT and private broadcasters pay 4 percent of their monthly advertising earnings to the Board. Private media spokespersons objected to this scheme, arguing that this was an excessive amount for a bureaucratic institution.

In addition to its responsibilities for supervising radio and television broadcasts, the Supreme Board was also responsible for the allocation of all the available national and regional frequencies for a maximum period of five years. However, the main difficulties that the Board had to face were the absence of a national frequency plan and the de facto distribution of frequencies among the existing stations. The broadcasters that were then on air saw the frequencies they occupied as an acquired right and were lobbying to maintain the status quo.

Although it had the power to take sanctions against broadcasters who insisted on breaching the law, the Supreme Board, at first, did not seem to be able to bring any order into the chaotic state of affairs. Private broadcasters continued to ignore the warnings issued to them.

However, the dismissal of the Director General and the Administrative Council of the TRT on 27 November 1995 proved that the Council was willing to use its draconian powers. From the mid-1990s to this day, private channels were, and still are, given harsh sentences and forced to suspend their broadcasts for one or more days. However, the most controversial features of the legal framework of broadcasting in the 1990s proved to be the limitations imposed on the ownership and advertising time. Law No. 3984 required that one company could not own more than one radio and one television station at the same time. It also defined the maximum amount of the shares that could be possessed by the same person as 20 percent. Similarly, the proportion of foreign investment and the number of shares that can be owned by the Turkish newspaper companies were limited to 20 percent. These provisions, which aimed to prevent concentration and cross-media ownership in order to safeguard pluralism and diversity, were never really effective. As usual there was more than one way of circumventing the law and media companies had the best legal consultants, who knew all about them.

Since the day of its approval in 1994, Law No. 3984 remained a matter of public dispute. There were constant calls from many different quarters including politicians, intellectuals, and journalists' associations and private media organizations to rectify its imperfections. However, although different parties agreed that there was a need for an amendment, they could not agree on how it should be carried out. Thus, when certain provisions of Law No. 3984 were amended on 7 June 2001, very few in the civil society, except private media conglomerates, seemed satisfied. Private media interests actively supported the amendments, as they would liberalize the regulations concerning ownership limitations and lift restrictions on the commercial activities of media owners. The new Law No. 4676 permitted media companies whose annual viewing or listening share was not more than 20 percent to own, partly or wholly, one or more radio and television station. The share of foreign investors was increased to 25 percent. The owners of private media were also allowed to submit bids for public works and speculate in stock markets. Instead of screen blackouts the new law endorsed large fines, which were well beyond the means of small regional and local operators. Spokespersons of large media conglomerates such as Dogan Media Group welcomed these amendments as legal acknowledgment of the actual situation. They argued that in this way there was no need to resort to deceptive ways in order to conceal the identity of the owners. However, President Ahmet Necdet Sezer was not convinced. He sent the law back to Parliament to be discussed again. In his veto statement, dated 18 June 2001, Sezer objected to the amendments, as 'they would lift all the obstacles preventing media from having a commercial nature which would serve individual interests.' Almost a year later, on 15 May 2002, parliament approved the same law without any change except in its number, making it impossible for the president to veto it the second time. In return President Sezer referred Law No. 4756 to the Constitutional Court and asked for the annulment of certain articles, which he thought would harm the freedom of the press and the diversity of the public sphere. On 12 June 2002, the Constitutional Court ruled for the annulment of five provisions and certain paragraphs of Law No. 4756, turning broadcasting legislation into an even more complicated matter than before.

Cross- media Ownership and Concentration

The integration of media and other industrial sectors in Turkey goes back to the late 1970s when businessmen like Aydin Dogan, who had accumulated their wealth in non-media fields, started to buy traditional titles. Aydin Dogan, the owner and the chairman of the Dogan Media Group, the largest media conglomerate in Turkey, made his debut in media sector in 1978 by purchasing the prestigious daily Milliyet from the Karacan family. The transfer of newspaper ownership from journalist families to entrepreneurs in the 1980s paved the way for the industrialization of the Turkish press, which forced newspapers to work as part of a larger entity with significant stakes in several non-media sectors.

When Turkish electronic media were privatized in 1990, major press companies saw this as an opportunity to diversify their operations. They entered the market either by launching their own radio and television stations or by acquiring shares in already established companies. In this way a large amount of capital was transferred from the press sector into broadcasting.

Many non-media companies too scrambled to grab a share in what was perceived as a flourishing market. Mustafa Sönmez (1996) argued, however, that the investments made in electronic media could not be explained by their economic benefit, for the profit rate in the media sector in the 1990s was much less than that in other sectors. It was argued that many groups wanted to possess media power as a 'weapon' to bargain with politicians and scare their competitors.

Sönmez (2002) also contended that the growth in media sectors in the 1990s should be seen as artificial, for it was largely financed by the advertising expenditures realized by the banking and finance sectors. While the Turkish economy grew only 3 percent in the 1990s, the growth rate in the finance sector was 13 percent. Thus the collapse of many banks and the subsequent contraction of the banking sector both in November 2000 and in February 2001 affected media companies a great deal. The economic crisis in 2001, in particular, led to an important restructuring in the media industry. 'While some players undergoing financial distress were forced to reduce their presence, some others divested their media ventures and pulled out.' (3)

Throughout the 1990s and in the 2000s, the ownership of some television and radio stations kept changing hands due to financial instabilities or transactions between different media groups. However, this did not change the fact that extensive cross-ownership and concentration are the defining features of the media landscape in Turkey. To this date, the Dogan, Bilgin, Uzan, Ihlas, Çukurova, and Dogus groups have succeeded in becoming the major players. Among them the Dogan and Bilgin groups, in particular, control most of the press and television market. Following the collapse of Dinç Bilgin's Etibank and his imprisonment for fraud, Dogan Media Group attempted to control Bilgin Group's media operations. (4)

Advertising Market

The liberalization of foreign trade since the 1980s has caused world brands to enter into Turkish markets. The resultant competitive environment increased the significance of advertising and contributed to the enlargement of the advertising sector. With the arrival of private channels in 1990, television became the major advertising medium. Its share in the total advertising expenditure increased from 43.72 percent in 1990 to 51 percent in 1992. (5) The bulk of this increase, however, was shared between large private channels.

In the early 1990s, large commercial stations that belonged to rival press conglomerates like the Dogan and Bilgin groups, engaged in fierce battles for a lion's share of the advertising market. Later, however, they formed alliances to sell their commercial time through a joint company. In this way they were able not only to reduce the pressure of competition but also to share the operating costs. ATV, Show TV, and Kanal D sold their commercial airtime through BIMAS by 2001.

Between 1993 and 2000, total advertising spending showed a steady increase, except in 1994, and the advertising market grew gradually from around 650-700 million US dollars in 1993 to 1,055 million US dollars in 2000. There was a significant decrease in 2001 due to the most important economic crisis in the republic's history. The contraction of the Turkish economy by 9 percent in 2001 was reflected in the 50 percent decline in the advertising market. Total advertising expenditure of 734 million US dollars in 2001 was shared by different media sectors as follows: newspapers (including magazines), 31 percent; television, 32 percent; radio, 5 percent; open air, 6 percent; cinema, 1 percent; and other, 25 percent. (6)

Foreign Investment

Since the early 1980s, successive Turkish governments have implemented policies and have made modifications to relevant legislation to attract foreign investors. Foreign investments are invited in the belief that they will improve competition and standards in the national economy, generate employment opportunities, and allow transfer of technology and know-how. However, despite the implementation in January 1996 of a customs union with the EU, foreign direct investment remained limited due to certain disconcerting economic indicators such as high inflation as well as the unpredictable political atmosphere.

To the present day, American companies, which have investments in manufacturing, automotive, pharmaceutical, and the aerospace and defense sectors, have been the biggest foreign investors in Turkey. (7) The Foreign Commercial Service of the US Department of Commerce indicates that most US investment in Turkey is in the form of joint venture or licensing operations. (8) Legal experts contend that joint ventures are popular because they are easy and they have minimum legal obligations.

Among the media sectors, advertising has been the first to integrate with global markets. During the 1980s, the Turkish advertising sector opened up to foreign ownership and many local companies formed partnerships with international agencies such as Thompson, Gray, McCann, Ericsson, and Young and Rubicam. According to the Association of Advertisers, 13 of the 66 member agencies 'transferred their shares to a foreign advertising agency and became partners and nine of them co-operated with a foreign agency.' (9) In the 1990s, foreign capital moved into Turkey for audience and market research. In 1992, AGB Anatolia, a subsidiary of AGB Italy, which was operating in six other countries including Italy, Greece, Portugal, Hungary, the United Arab Emirates, and Venezuela, was awarded the right to undertake audience research. AGB Anatolia had been operating in Turkey since 1989.

In the early 1990s, foreign investors also showed interest in acquiring ownership and establishing joint ventures in media fields. For instance, in 1993 RTL signed an agreement with the Inter Group to launch a radio station called Radio Contact. It was also reported in the press that before launching its television channel, HBB, Has Holdings had sought a partnership with Pepsi. In September 1992, Time Warner and its Turkish partner, Koç Holdings, one of the largest industrial groups in Turkey, attempted to purchase TRT-3. The Italian media tycoon Silvio Berlusconi was also said to be seeking opportunities in the thriving Turkish television market. In September 1994, during his visit to Turkey to sign a cooperation agreement with the Dogus Group, which then owned Kanal D, Adriano Galliani from Fininvest declared the group's intention to make substantial investments in Turkey. (10)

However, by the end of the 1990s, there was no significant foreign involvement in Turkish electronic media. CNN TÜRK of Dogan Group has, therefore, pioneered the joint ventures with foreign partners in the television sector. DMG has another joint venture with Burda RCS in the magazine market. The group also signed a licensing agreement in 2001 with Bertelsman Music Group to sell 1200 music albums in Turkey. Dogus Media Group, which launched CNBC-e in 2000, also owns NTVMSNBC news portal, launched in cooperation with MSNBC. NTVMSNBC is linked with MSNBC and uses its technology.

Dogan Media Group

Dogan Media Group has investments across all media sectors in Turkey. Its CEO, Mehmet Ali Yalçindag, describes the Group as 'the youngest conglomerate with the fourth biggest paid-in capital among the conglomerates.' (11) He says, '(n)ot only do we access every household in Turkey via our 8 newspapers, 24 magazines, internet company, two TV channels, and 3 radio stations, we have also become an indispensable part of their lives.' (12)

Non-media investments of Aydin Dogan, the owner and the chairman of DMG, cover a variety of sectors including banking, telecommunications, marketing, tourism, and energy. Dogan Holding bought Disbank in 1990 and acquired various companies with financial difficulties. Moreover, it took part in bids for privatized state companies in energy, banking, and telecommunications sectors. Through its subsidiary, Zigana Electric, it entered the energy sector. In 2000, it bought POAS, the petroleum company, in cooperation with Is Bank. Its four companies are publicly traded on the Istanbul Stock Exchange. The total value of the shares for these companies is estimated at 825 million US dollars.

Table 1:
Corporate Holdings of Dogan Media Group (13)

Newspapers Fanatik; Finansal Forum; Gözcü; Hürriyet; Milliyet; Posta; Radikal; Turkish Daily News
Broadcasting Television Production and Broadcasting: ANS Film; Cable TV (Bravo TV and Galaxy TV); CNN TÜRK; D Production; Euro D; Kanal DRadios: Radyo D; Hür FM; Radyo Forex
Magazines and Books

DBR (joint venture with Burda Rizzoli, publishes magazines Tempo, Ekonomist, Auto Show, Hafta Sonu, Capital, Elele, Hey Girl, Formsante, Focus, Atlas, Burda, Klips, Max)
Dogan Books
Dogan Egmont (joint venture with Egmont Denmark) publishes books for 3-14 year olds, licensed publisher of Walt Disney books and magazines

Printing Dogan Ofset; Dogan Printing Centers (DPC)
New Media Dogan Online; Dogan Music production; Ultra Cable TV
Distribution and Retailing Yaysat ; D&R
Ancillary Businesses Dogan News Agency (DHA); Dogan Factoring; Bimas; Hür Medya; Simge Advertising Group; Rekpa
Europe DMG International

Dogan Media Group is estimated to control 40 to 50 percent of the entire media market in Turkey. Its share in the advertising market was 39 percent in 2001, while this figure went up to 66 percent in the press sector. (14) In May 2002, the total circulation of daily newspapers in Turkey was around 4 million. Dogan Media Group papers accounted for 40 percent of this figure with a total circulation around 1.6 million. In 2001, the combined average viewing share of the two television channels belonging to the Group, CNN TÜRK and Kanal D, was 17.4 percent. While CNN TÜRK had an average viewing share of 1.6 percent, Kanal D attracted 15.8 percent of viewers (Kaya, 2002).

Group executives claimed that DMG was not adversely affected by the economic crisis of 2001 thanks to cost-cutting measures and the consolidation of some operations, such as merging Milliyet with Simge Yayincilik. DMG stated that 'to merge Simge with our listed company Milliyet not only will release the power of synergies in the Group but also create the second largest newspaper company in the industry.' (15) The Group's official web site revealed that "the merged company will have an ad market share of 24 percent and a daily circulation of 950,000 units, corresponding to a market share of 29 percent of circulation." (16)

Already the largest and most powerful media conglomerate in the country, DMG intends to expand and further diversify. Yalçindag asserts, "We have maintained our leadership in avenues like the Internet, which we believe is a continuum of our business. Perhaps in 2002 or perhaps later, we will certainly take our places in Outdoor, Pay TV and similar avenues…. As the largest media group, we obviously target to maintain leadership in the market while increasing our revenues. However, our duty is to pioneer the formation of sector rules and standards for a healthy development of the sector." (17)

CNN TÜRK

CNN TÜRK was launched on 11 October 1999 as a joint venture between Turner Broadcasting International of AOL Time Warner and Dogan Media Group. It is the second CNN-branded local language service to be operated and controlled outside Atlanta and the first Turkish television channel to have an international partner. Other non-English joint ventures of CNN with local media are CNN+ (in Spanish) and n-TV (in German).

AOL Time Warner Europe's web site explains the reasons for working with regional partners as being "to provide local channels with the benefits of CNN's global editorial and production expertise, its ability to cover breaking news through its international news-gathering infrastructure, and the impartial, world-class news coverage for which CNN is known around the world." (18) Ferhat Boratav, head of CNN TÜRK's news department, argues that "CNN TÜRK is a product of CNN's belief in the principle of 'thinking globally and acting locally'." (19)

CNN TÜRK reaches around 7 million viewers via terrestrial television and can be received via cable and satellite by 40 million people across Turkey. The Dogan Media Group web site states that the channel "aims eventually reach the Turkish-speaking republics of Central Asia and Turkish communities in Europe." (20)

As a 24-hour news broadcaster, CNN TÜRK broadcasts national and international news as well as extensive business, financial, political, and sports news programming and analysis. Based in Istanbul, its contents are written, produced, and presented by Turkish journalists for Turkish viewers. In addition to its every half hour flagship news bulletins, financial and sports news, programs are offered in a variety of interest areas. CNN TÜRK has access to CNN's 36 bureaus and more than 800 affiliates worldwide and makes use of DMG's extensive local newsgathering resources.

CNN TÜRK competes with its main rival, NVT of Dogus Group to capture a larger segment of the television news audience. It has 175 national and global advertisers including major multinational companies, (21) which, CNN TÜRK executives claim, currently provide the channel 5 percent of the total television advertising income in Turkey. (22)

CNN TÜRK remains, to this day, the only joint venture with a foreign partner in the Turkish television sector. DMG and Turner Broadcasting have certain amounts of put-in capital, which they do not disclose. The joint venture deal includes a profit-sharing scheme based on the number of shares that the parties hold. CNN TÜRK is a new brand created within the family of international CNN brands. Through CNN TÜRK, CNN brand enters many more houses in Turkey and its peripheries. In this way, CNN TÜRK allows CNN International to increase its reach and its news gathering resources at no cost. Efe Önbilgen, the deputy director of CNN TÜRK, states that it becomes much more cost efficient for CNN International to have CNN TÜRK rather than a bureau in Turkey to cover the country and its region. (23)

CNN TÜRK brings a number of advantages for the local partner, DMG, as well. Broadcasting with an established international brand helps attract audiences and advertisers. Önbilgen asserts that when CNN TÜRK first began its broadcast it had 21 advertisers willing to place their ads in this new channel only because they trusted the CNN logo. In other words, aligning with already successful and popular brands reduces the risk for the new investment. In addition, DMG makes use of CNN International's worldwide newsgathering resources and shares its technology, know-how, and 20 year-old experience in the business.

CEO of DMG Yalçindag claims that their joint ventures like CNN TÜRK with foreign operators are based on mutual benefits. "These companies are the result of a certain philosophy, acquiring foreign culture, and the sense of partnership. We also want to present ourselves abroad and collaborate with the leading media companies in the world. We have increased our know-how and business perception in order to extend our limits." (24)

Dogus Media Group

Dogus Group is one of the leading conglomerates in Turkey and provides services and goods in seven different industries, namely, construction, finance, retailing, automotive, communications, tourism, and food processing through more than 60 companies. The official web site of the Group reveals that "by the end of 1999, total assets account to 14.4 billion, revenues were 5 billion and operational profit was more than 1.7 billion US dollars." (25) The group provides services in partnership with ConAngra's Lamb-Weston and Italy's Barilla and Neckerman. It is also the distributor of car manufacturers Audi, Volkswagen, Porsche, Seat, Skoda, and Scania. It has license agreements of Gameworks, CNBC and MSNBS.com and holds distribution rights of Jeeves International, Emporio Armani, and Gucci, as well as executive rights of ITT Sheraton-Antalya and Hyatt International-Istanbul. While the Holding had 5.1 billion dollars in earnings in 2001, Garanti Bankasi, the largest company of the Holding in the banking sector, had 1.4 billion dollars. (26)

Although relatively a newcomer to the media sector in Turkey, Dogus Group rapidly expanded its presence. Its major assets are NTV and CNBC-e television channels, NTV radio, and NTVMSNBC news portal.

Table 2:
Corporate Holdings of Dogus Media Group

Broadcasting Television Broadcasting: NTV, CNBC-eRadios: NTV Radio
Magazines and Books Publisher of National Geographic (since April 2001);F 1 Racing (Formula 1 magazine)NTV Mag, NTVstyle, Popüler TarihCNBC-e Magazine, Car (automobile magazine), Tarçin (monthy women's magazine)
New Media Ixir Holding A.S (ISP, new media and online shopping)Okyanux (risk capital company for creative 'startup.com's)Sebit

NTV, which had a head start in television news, competes with CNN TÜRK. An audience survey carried out between 26 and 28 October 2002 revealed that with 12.9 percent of viewing figures, NTV was the first among the news channels and the sixth among the most frequently viewed channels. The survey also revealed that NTV viewers were mostly more highly educated, middle-aged cosmopolitans living in the Marmara region.

CNBC-e

CNBC-e is based on a local economy channel Kanal E, which has been on the air since 11 November 1992. In the late 1990s, Kanal E was bought by Dogus Group, which renamed it CNBC-e on 16 October 2000 as a result of an agreement with American CNBC television. CNBC is a service of the leading U.S. television network, NBC, and Dow Jones. NBC's other international ventures include the National Geographic Channel in Europe and Asia and NBC Europe in association with Deutsche Fernsehnachrichten Agentur. NBC also owns MSNBC, an Internet news service run in conjunction with Microsoft. (27)

Breaking with CNBC tradition, CNBC-e's financial news is produced in Turkish. "Broadcasting live coverage of Turkey's stock exchange and all major European and international financial markets, CNBC-e provides the increasingly significant Turkish market with access to global breaking-investment opportunities." (28) The company web site describes it as an "economy channel useful for both big and small investors." Complementing the financial news service, CNBC-e, unlike other CNBC channels, broadcasts, in the evenings, foreign series and films in their original language with Turkish subtitles.

CNBC-e's home-grown productions are limited to daytime hours between 7 a.m. and 6 p.m. They include economic news and analysis from Turkish and world markets. After 6 p.m., there are no programs in Turkish. Between 6 p.m. and 9 p.m., American sit-coms like Seinfeld and Frasier and serials such as Dawson's Creek and Ally McBeal are broadcast.

CNBC-e has also two film slots, one at 9 p.m. and the other at midnight. After midnight hours are filled with repeats of the day's programs. CNBC-e broadcasts on Eutelsat W1 for the densely populated Marmara region, which has a potential audience of 22 million. Its core audiences are middle-class professional cosmopolitans. An anonymous commentary on Turkish media on the web describes CNBC-e viewers as "(t)hose relatively intellectual, English speaking petty bourgeoisie who were educated in the 'liberal' 1980s and who speculate in the stock exchange during the day and want to watch a film or a concert in his/her sheltered home decorated with a DVD and a computer with internet connection." (29)

The franchising agreement between Dogus Group and CNBC Europe seems to be generating different benefits for the parties. For CNBC Europe this franchising agreement means differentiating its revenues. Dogus Group pays CNBC Europe royalty fees and a fixed annual sum for using their logo and services. In addition, CBNC Europe gets a portion of the income generated from advertising and sponsorship. (30)

As is the case for CNN TÜRK, the CNBC-e logo was used by the Dogus Group to accelerate the take-up of the channel and increase its market share. In addition to garnering the advantages of broadcasting with an international brand, Dogus Group also shares CNBC's technology, know-how, and news resources. Moreover, CNBC-e can make use of the resources of some news sources, like the London Stock Exchange, as the royalty and blanket fees paid for CNBC Europe's services also cover them. (31)

Though it is only a few years old, CNBC-e has succeeded in becoming one of the prominent thematic channels in Turkey. This is reflected in the business world's appreciation of its broadcasts. In March 2001, the Turkish-American Business Council gave CNBC-e a 'Media Success Award' for its success in attracting foreign capital into the Turkish media sector. (32)

Conclusion

National media spaces are not national anymore in the sense that we knew prior to the emergence of transnational mediascapes, financescapes, and technoscapes (Featherstone and Lash, 1995). Cultural mixing, borrowing, and interchange are happening faster and with fewer intermediaries, increasing the global interdependence of media industries (Morris, 2002).

Joint ventures and franchising deals in the television sector in Turkey have proved to be both mechanisms and consequences of the opening up to global markets. It is seen that foreign partners help local companies to integrate with global markets while local companies provide major international companies a safe passage to an unknown, risky territory.

In most cases, local companies seek foreign partners because they want to make use of their international prestige and standing as well as to exploit their superior resources and technology. Aligning with a strong global partner also provides an opportunity to learn from its experience and expertise. Local companies use these advantages to beat their competitors at home. Global companies, on the other hand, seem to be interested in expanding their reach in different consumer markets and in marketing their brand, products, and services in as many ways as possible. Co-operating with local companies, which have better experiential knowledge related to their domestic market, both reduces the risks for the investment and helps circumvent the rules and regulations concerning foreign involvement in national media sectors. TBS

References

Notes


Dilruba Çatalbas is Associate Professor of Journalism at the University of Galatasaray, in Istanbul. She received her PhD in Communication from the University of London, Goldsmith's College, her MA from Leeds University and her BA from the University of Istanbul. She teaches and researches in areas concerning economic, political, international, and regulatory dimensions of public communication and journalism.
Copyright 2003 Transnational Broadcasting Studies
TBS is published by the Adham Center for Television Journalism, the American University in Cairo
E-mail: TBS@aucegypt.edu