The Broadcast Audience Research Council of India (BARC) had stopped the publication of TV measurement on public platforms, calling the data ‘against public interest’. TRAI forced it to resume publication and therefore after a gap of eight weeks, BARC released the numbers for Week 13 on the public domain on April 8, 2019.
Dangal wins this maha Dangal:
Perhaps, only a segment of society might have heard or watched the Bhojpuri channel Dangal before the new tariff order. However, when the BARC resumed publication of data recently after several weeks due to tariff order, Dangal, a free-to-air Hindi general entertainment channel (GEC), had successfully dethroned Sun TV to emerge the most-viewed in week 15 (March 23 to March 29) of 2019. The channel, owned and operated by Enter10 Television, has raced to the top with a weekly viewership of 1.1 billion impressions! It was followed by Sun TV with 1 billion impressions.
Dangal became overnight famous, thanks to DD Free Dish, the distribution platform launched by Prasar Bharti. But at the same time, it gained because of the withdrawal of multiple private free-to-air (FTA) channels from the platform in recent months. Due to TRAI Tariff Order, Multiple popular private FTA channels such as Zee Anmol, Rishtey, Rishtey Cineplex, Star Utsav, Sony Wah, and Star Utsav Movies withdrew from Free Dish on March 1.
But it would spell doom for DD FreeDish if popular FTA channels keep withdrawing from the platform.
As per a BARC India spokesperson: “This is an early trend and should be read with that perspective. Dangal was always available on Free Dish, however, with the exit of the key FTA (free to air) GEC and movie channels, which drew viewers to the platform, the other available channels have benefited as consumers spend more time on these channels.”
However, top GEC like Colors, Sony Entertainment Television, and Zee TV witnessed a drop of between 13 and 16 per cent; only Star Plus saw a marginal increase (1.2 per cent) in viewership.
Many broadcasters termed the first set of BARC data after the tariff order rollout as unreliable. They said that BARC tweaked its sample homes for calculating viewership data as the current sample doesn’t fit well according to the new TV ecosystem.
As per an industry expert: “In order to have reliable measurements, it has been suggested that BARC will have to reconsider its sample homes as the current sampling won’t be accurate for the new TV ecosystem.”
Broadcasters did not like TRAI for forcing BARC to make the viewership data public. TRAI might have wished great results after the implementation, but the ground realities were brutal.
Overall, the poor and shoddy implementation shows us the lack of foresightedness of the policy makers in our country. Many LCO’s succumbed to the financial pressure and some of them left their subscribers and businesses and vanished as subscribers wanted them to refund the security deposit of the STBs before switching to the DTH platforms. Therefore, the top gained of all this chaos were DTH platforms, and not MSOs.
There was great disruption caused in the TV distribution ecosystem after the implementation of tariff order, as the ratings have been projected on the universe of 200 million homes. A broadcaster’s spokesperson rightly commented,“There are some people who are yet to choose their packs. As a result of this, there have been blackouts. You cannot rely on 35,000-40,000 homes on the universe of 200 million homes?”
Industry faces huge losses:
The new tariff order causes massive erosion in losses of not only multi system operators (MSOs) but also broadcasters as advertisers stayed away not knowing where to place the ads. Hathway Cable and Datacom Ltd’s (Hathway Cable) said that the new tariff order resulted in changes in pricing mechanism and arrangements amongst the company, LCOs and broadcasters as well as equity infusion.
The MSO called these adjustments, having a one-time impact on financial statements have been disclosed as 'Exceptional Item' in its financial results for the period. And as per report, exceptional items in FY 2019 impacted the company to the extent of ` 429.62 crore as compared to just ` 5.34 crore in FY 2018.
The media conglomerate TV18 too said the introduction of a new tariff order by TRAI has impacted both its advertising revenue as well as subscription income. Its total revenue from national news channels fell 1% on year to ` 224 cr, even though there was a 6% increase in regional news channel revenue to ` 64 cr.
Due to this Tariff Order, several broadcasters started off with relatively high channel prices, which impacted their reach and affected their ad revenue. Broadcasters thought the high channel prices would oost subscription revenue, which seems to have failed to materialize so far.
The Mukesh Ambani owned TV18 said in its quarterly update: “Viewership has been impacted for all major broadcasters as process of consumers choosing channels/packs and on-ground realignments in distribution value-chain are still underway. This has led to volatile viewership, which is expected to take some more time to settle.”
It added: “Gross subscription revenue growth has been impacted too, as subscriber base has yet to normalize due to implementation challenges. We have increased our marketing intensity, as consumers are in the midst of exercising their choice.”
“Subscription dynamics are likely to improve in future as the broadcasting business moves to B2C (pull-based) rather than B2B (push-based). Our channels (through ‘Colorswala pack’ as well as distributor packs) have witnessed strong uptake in this transition phase; led by breadth of content at a value price-point, and improved distribution tie-ups.”
The group elaborated: “However, we believe that in the new tariff regime pay-channels shall have better consumer connect as well as distribution economics in the medium-term. This shall also improve the monetisation of primary pay-GEC Colors, which had faced some viewership/ advertiser cannibalisation.”
According to financial services company Nomura, the new tariff order has huge impact on advertising revenue as well as subscription growth for Indian media companies. It predicted that Zee Entertainment Enterprises’ advertisement revenue growth will be at about eight per cent year-on-year (YoY) in Q4. It expects Sun TV to also report a similar growth rate due to TRAI’s order and competition in the Tamil language genre. It also predicted a five per cent revenue growth for Dish TV in Q4.
As per MPA analysis, overall trade on TV was down by 15-20% through February as some ad categories chose to reallocate spends to other mediums. Some advertisers are hoarding spends for high impact events like the general elections and Indian Premier League. In general, advertisers remain committed to mass genres, while niche genres have lost business. For instance, Sony India recently shut down three premium HD channels—Sony Rox, Sony LePlex and Ten Golf.
The report by MPA added that as of mid-March, about 40% of direct-to-home subscribers and 70% of digital cable subscribers have migrated to the new regime. However, a majority of these customers have been made to migrate to “Best Fit Packs", as back-end systems for most distribution platforms are not robust enough for consumers to exercise their right to choose à la carte channels.
It said: “The operator-created ‘Best Fit’ plans are not widely accepted by the consumers. Besides, to expedite subscriber migration, several cable networks have resorted to frequent black-outs. Industry stakeholders are therefore unable to capture true intrinsic demand for TV channels. More clarity will emerge in the coming months."
TV channels are also experiencing some loss in advertising revenue during this transition phase before viewership ratings settle down.
Jehil Thakkar, partner at management consulting firm Deloitte India, said: “Advertisers are confused. They are gravitating towards what they think are known properties. For everything else, there is confusion."
TRAI defends its Tariff Order:
Though chaos persists in broadcasting sector and consumers are at the receiving end with high rates, TRAI Chairman RS Sharma continues to defend the order.
H said: “New framework has been designed after balancing and providing for the proportionate revenue for various service providers in the service provisioning value chain. The basic architecture of the framework provides for fair competition among broadcasters and the real prices will be discovered after a few months of market play. The analysis of preliminary data of a few large DPOs reflects actual savings by subscribers to the tune of 10 to 15 per cent in metro towns and between 5 to 10 per cent in non-metro (DAS 3 and DAS 4) areas.”
Deadline could be extended:
Many industry people and even subscribers are of the opinion that deadline to implement or migrate to new order could be extended one more time. It was 31 March. Many people are still not aware of the new regime and TRAI’s 'non-exercise of the option' should not create any inconvenience.
As per an industry insider: “Elections will play an important role in pushing the deadline further as the government and TRAI will never take the risk of annoying consumers by disconnecting their television connections.”
An extension will ensure people continue to receive the signals of the channels in an uninterrupted manner.
Migration to OTT:
Many experts say that the new tariff order has done further damage to already damage caused to TV by OTT platforms. Households with multiple televisions will no longer be able to avail a discount on their second or third TV connection.
Therefore, many consumers are lured and may choose to migrate to online platforms, like Airtel TV and Jio TV, which offer live TV feeds of 300-500 channels for free.
The reach of most pay TV channels has fallen. As the television market matures, it should move towards pay TV rather than be advertising-driven. But the new order is killing the pay TV market.
Also, according to FICCI-EY report ‘A Billion screens if opportunity’, the OTT platforms will benefit due to increased parity between television and OTT consumption, both in terms of content choice and costs.
The DTH operators, Tata Sky, Airtel Digital TV, Sun Direct and the broadcaster Discovery Communications India are still fighting the case at the Delhi High Court against the sector regulator, TRAI. The Delhi High Court has adjourned the matter to April 25. The applicants have challenged the new tariff regime.
But in this case, unlike Star India wherein it questioned the regulatory powers of TRAI, the matter in the Delhi HC questions the regulator’s power to wipe out deals that operators enter into to fix commissions and rates for customers.
Let’s wait and watch who are buried and who all come out as victorious once the dust of this poor implementation settles down. A bit more farsightedness was needed on the part of policy makers to achieve the seamless transition. But it was not to be.