February 21, 2017

emerge85 lab co-director Afshin Molavi speaks to Saad Mohseni, founder and chairman of the Moby Group. With operations from Afghanistan to Ethiopia, and India to Iran, the Dubai-based media company now has plans to expand across the emerge85 world.

The Intro 
In 2003 Afghanistan, over a crackling FM radio signal, Saad and his two brothers started a media revolution. Though they did not know it at the time, they had just launched the most dynamic media company in their country’s history, one that has since made inroads into Africa and West and Central Asia. In 2003, however, the company started life as a radio station, ArmanFM, playing Western pop songs alongside Bollywood, Afghan, and Persian hits.

It was, Saad says, “an accidental business”, given the brothers’ original goal was simply to use some of their savings to invest in companies and help them grow. “We didn’t know what to expect with Arman FM,” Saad says. The brothers did not have to wait long for an answer. Within a week of the launch, “it was clear that we hit a nerve”, Saad adds. 

Listeners flocked to the station, as did critics, and Saad Mohseni, son of an Afghan diplomat and former investment banker and entrepreneur, had a new full-time job. 

The success continued: ToloTV, a popular entertainment and news station; ToloNews, an acclaimed news channel; culture-shifting reality show Afghan Star, now in its twelfth year; an Afghan football premier league; a 2012 deal in which Rupert Murdoch’s News Corporation invested in Moby; and numerous press awards, accolades, and coverage in Western media.

Moby eventually grew beyond Afghanistan into other frontier markets: Ethiopia, Iran, and Iraq. Now, it has entered more mature markets like India, and has inked a deal to bring US network and content producer Vice to West Asia and North Africa.

Saad’s “accidental business” has become one of the most interesting and dynamic media companies in the emerging world, and it’s only just getting started.

The Scene

The Four Seasons Hotel outdoor courtyard, Washington, DC, late afternoon, November 2016 

Saad: English Breakfast 
Afshin: Moroccan Mint 

Saad is visiting the US to accept an award on behalf of his groundbreaking Afghan-wide television channel, Tolo TV. Wearing a dark grey suit and tie, the collar of his white shirt sits slightly askew. His salt and pepper hair has a windblown look, and his eyebrows are constantly raised, creating a playful image that belies the seriousness of his enterprise: An expanding frontier and emerging market media empire in some of the world’s most challenging markets.

“It’s good to see you,” he smiles. “I’m sorry, I only have 30 minutes,” he adds, as we find a spot to sit. “It’s one of those days.” He looks at his phone, sends one last message before placing it firmly on the table, and orders English Breakfast tea. “In Afghanistan, I drink a lot of tea. It’s a part of life; a part of business. But, to be honest, when I’m outside or in our headquarters in Dubai, I’m more of a coffee drinker.”

The Conversation

Arman FM and “an accidental business” 

“If the business had failed, I don’t think it would have disappointed us. I think we wanted to give it a go and it was certainly a lot of fun setting it up.”

Arman FM was our first media venture. That became the basis for everything else we have done, subsequently. When we started Arman FM in 2003, we didn’t have any expectations to be honest with you. The three of us brothers – Zaid [currently chief operating officer] and Jahid [chief digital officer] – are generally financially responsible and we view ourselves as astute investors, but, to be honest, there wasn’t much of a business plan because there was no advertising market, so it was very much one of those Hail Mary-pass type business ventures. If the business had failed, I don’t think it would have disappointed us. I think we wanted to give it a go and it was certainly a lot of fun setting it up.

When we first went to Afghanistan after the fall of the Taliban [in 2002], our initial effort was to go back and see how we could be of help. In subsequent visits we thought we could invest in a number of ventures financing smaller companies; then, when we got into media, we realised it would be difficult to be in more than one sector. It’s kind of an accidental business. And here we are today. 

“We knew we hit a nerve.” 
With Arman FM, we knew we hit a nerve right away, within a week or so. We had a soft launch, I went away, and then within a week we certainly had enough pushback, and it was controversial enough that I knew I had to get back quickly. So we knew it was going to be successful right away. 

“We turned the whole thing on its head. We went with something revolutionary for Afghanistan, but something that is quite common for other countries.”

We had young DJs speaking very colloquially, men and women in studios together. This was clearly different. The tradition in Afghanistan until then was much older people behind the mics and virtually no females – certainly not in 2002/03. We turned the whole thing on its head. We went with something revolutionary for Afghanistan, but something that is quite common for other countries. 

Financially, it took a bit longer, almost a year before we knew we had to do more, so we went national and set up a TV station in 2004. That’s when we realised we could be onto something even bigger. 

Television: Threats, soaps, and a tea house conversation 
When we started with television, someone warned us: I know you guys have copped some criticism with radio, but you’ve seen nothing yet. Any reaction you see, by comparison, will be on steroids – both positive and negative. As always, we didn’t think it through and we would have done it regardless, but the pushback was serious. 

“It was life threatening, business threatening, everything. We have lost people over the years.”

It was life threatening, business threatening, everything. We have lost people over the years. [In January 2016, a Taliban suicide bomber attacked a minibus carrying ToloNews staffers, killing seven]. It’s a serious issue.
Originally, we went with known formulas: Soap operas from India, then we went with Turkish soaps, and European shows, and telenovelas from South America, and then we also began some local shows. We had a show called Taxi. One of our hosts would get into a cab and chat to the driver for 20 to 25 minutes. We had a show called Chai Khaneh (tea house), a bunch of guys sitting around talking about [the] history of Kabul and the good old days, tall tales, that sort of thing. That show is still going on. We had roundtables, discussion programmes; programmes on poetry. Fairly simple production values, but people were watching.

The Afghan star breakout and fast-tracking inevitable change

Editor’s note: In 2004, ToloTV launched Afghan Star. Descending on a country still reeling from the Taliban’s harsh crackdown on any form of entertainment or cultural expression, the show captivated audiences nationwide, gained global attention, and inspired an award-winning documentary.

We knew that the pop idol format worked so well everywhere else, so we were confident that it could work. We were also so dominant at the time we launched the show that people would watch whatever we put on air. 

“Afghan Star certainly broke some taboos, but, in Afghanistan, change was inevitable. It was either us or someone else.”

For us, the real challenge was teaching people how to text. We had these public service announcement campaigns, 24/7, to teach people how to text. It was extraordinary how the number of texts increased during that 4-5 month period when we aired. At the beginning, people were totally oblivious to what texting meant. 

Afghan Star certainly broke some taboos, but, in Afghanistan, change was inevitable. It was either us or someone else. People since the 90s had been buying satellite dishes and slowly but surely they were going to get to this. What we did was fast track the inevitable change and we localised it. Even if the Taliban had prevailed in Afghanistan, people would have been able to get foreign content using a satellite dish. In this globalised world, although we are seeing a backlash now, there are certainly no boundaries when it comes to entertainment and content.

Tokyo youth 

My father was a diplomat, [so] I grew up in many places, but I think Tokyo was particularly formative. From 1978 to 1982, I was in Tokyo. I also spent time in Kabul as a kid. We lived in London, Islamabad, Melbourne, and Sydney. 

Tokyo was my early teen years, [aged] 12 to16. Those are important years in terms of life, in general. You begin to learn what aesthetic appeals to you. We were exposed to a lot of television as kids, and I often just think back on those Tokyo years as very important to my media work. 

Beyond Afghanistan 

Editor’s note: In 2009, Saad, who holds dual citizenship, partnered with fellow Australian Rupert Murdoch to launch Farsi1, a satellite channel. The relationship eventually led to Murdoch’s News Corporation investing into the Moby Group in 2012. Farsi1 mostly played dubbed entertainment shows from the West, as well as Turkish and Colombian soap operas. Soon, it will become a solely digital channel.

Our first venture outside of Afghanistan was going into Iran via satellite, Farsi1. We launched technically in 2009. After Farsi1, we went to host [in] other countries. We launched a channel in Iraq in 2014 ( editor’s note: The show no longer airs), and Ethiopia in April 2016.

We are launching Vice in [the Middle East and North Africa, MENA], and are looking at a venture in Bangladesh. We are doing a Netflix type JV [joint venture] in a number of countries in South Asia. It will be a platform that will have thousands of programmes, and we have an online news site in India targeting the country’s millennials, 101 India.

We’re potentially looking at going [farther] east into South-east Asia, and always looking to expand in MENA. We love sub-Saharan Africa. Ethiopia for us has been a huge success, so we are looking at countries like Kenya, Tanzania, Nigeria, and Uganda. 

In search of India’s male millennials 

In India, web access is growing, but what we realise is web access is going to come mostly thanks to a mobile device. In India, at some stage, we will see numbers pick up dramatically. Right now, the cost of downloading is very high. 

“One challenge everyone faces is how to reach the millennials, especially young male populations. It’s very difficult.”

So, most people, even if they have a smartphone, they use a wi-fi connection to download. But with [the] emergence [of] new players like Reliance that have launched 4G in India, we will see costs come down so much that the middle-class kids will be able to get packages where they have unlimited data or lots of data, and for lots of people that will be a game changer. One challenge everyone faces is how to reach the millennials, especially young male populations. It’s very difficult.

General entertainment channels have a hard time reaching these people because the average viewer for a soap opera is like 35, and she is a housewife and a mother, more often than not. So, the target market we are able to reach through 101 India is the one that everyone is after. 

“To be in media in Ethiopia just makes sense.” 

“I really like Ethiopia. They have an optimism about their future.”

I really like Ethiopia. They have an optimism about their future. They’ve had an extraordinary decade of growth. Given the tragedy that nation faced in the 80s, they’ve come a long way. They will have teething problems, of course. The median age is 18, it has a population of 95m, set to double by 2050. The country has significant potential, but it will have its challenges. 

It has a great music scene, a great jazz scene, [and] rising urbanisation. To be in media in Ethiopia just makes sense. 

Ethiopia is small but we knew with our presence that market would grow. Today, 20% of advertising goes to television, but when we went to Ethiopia, only 10% of advertising was going to television, so we knew there was an arbitrage opportunity, so to speak. 

Entrepreneur advice 

  • Experience your mistakes 
  • Don’t fear cutting your losses 
  • Don’t stick to a rigid philosophy 
  • Invest in people 

When entrepreneurs ask me if I regret anything, I usually say that it’s important to experience mistakes. You don’t wisen up unless you experience these things yourselves. 

But one thing that’s important is when something is not working out, you need to have the discipline to cut your losses. There have been situations where we have persevered when we would have been better off cutting losses. Sometimes, we have taken longer than we should. 

You also must be willing to change your philosophy as the sector changes. As the sector changes, as the environment changes, you need to adapt. The sector has changed so much in terms of how people view content or consume content, what devices they use to view a programme on, the duration of a programme, and the like. Fifteen years ago, if someone told me that people want to watch two-minute clips, I’d say you are crazy. Today on Facebook that is the length of an average video people would want to watch, so we must be prepared for that and adapt as we go along. 

“It’s very important to invest in people. Our business is about creating content that in particular resonates with young people.”

It’s very important to invest in people. Our business is about creating content that in particular resonates with young people. We can’t do that without investing in the right people. 

The future of broadcasting: Platform agnostic

When I say broadcasting, I mean distribution. For us, we are fairly agnostic when it comes to the platform. They could be linear channels, digital channels, over-the-top platforms – as long as we have a way to deliver content to our viewers. 

And the other more important aspect of our business is content, developing [intellectual property]. We produce already something like 7,500 hours of content annually. We dub about 4,000 hours of content. So, that’s nearly 12,000 hours of content annually. 

Why Dubai? 
Dubai is our hub for many reasons. It has great infrastructure, easy access to our markets with all of the international carriers flying through, a flexible business environment, [and] a good lifestyle for expats. It just makes sense to be in Dubai.


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Source: http://emerge85.io/tea/the-afghan-media-mogul-goes-global