The TV business, explained a very senior member of the fraternity over a decade ago, is like fire. It needs to be constantly fed with more – more shows, more content, and more money. And, the more you feed it, the more it consumes. If you look at the media landscape today, one realises that statement to be more valid than ever before..
Every TV channel has seen an increase in cost of content – not just in producing it but marketing and distributing it. Channels have to do more to attract and retain audiences. Bigger Stars, more chutzpah, more on gloss and glamour, the newest films, breaking news, – everything geared towards grabbing the attention of the viewer for that split second, and keeping it for as long as possible. There are costs – not insubstantial ones – attached to doing this.
Channels hope that their revenues will offset these costs. There are traditionally three sources of revenue. Worldwide, TV channels earn their money from advertising; from subscriptions to households; and through licensing their content to other channels. In western countries apart from a handful of terrestrial (usually under 10) channels that are free to the household, the rest are subscription based. The free to air terrestrial channels carry a mix of programming – and is paid for by advertising; while the subscription driven channels tend to be far more focussed on a certain kind of content or audience – cookery channel, golf channel, religious channel or a children’s channel; adult channels, old age channels, pet lovers’ channels and more. These are evolved and sophisticated markets that are structured and transparent in their functioning.
In India the market is still evolving. According to TRAI, there are 800 channels and 160 of these are pay channels. Out of 24.7 crore households in India, there are 14.7 crore TV households out of which 9.4 crores have access to cable TV and the rest only receive Doordarshan. Conditional Access – where you pay for the channels that you view and only those – has been promised for a decade or more, but not delivered. The cable lobby is simply too strong. Channels earn a fraction of the revenue that is collected by the cable operator from the household. The rest is not declared. In addition to under declaring the number of households in their locality, cable companies also demand a fat carriage fees for carrying the channel. The world of cable operators is still the proverbial ‘wild west’ – they rule their roost with an iron hand. Channels that push too hard do not get seen.
Most channels rely on advertising as the main source of revenue. The rates they can command from the client is dependent on only one metric – the TRP that is monitored and reported by a monopoly agency TAM, owned by international giant A.C.Nielsen. They monitor 8150 households across India and the viewership ratings are based on these households. In each of these households a meter is fitted to the TV set. The family is given a remote control. Each family member is identified by gender & age by a button on the remote. While watching TV, they are supposed to push their button followed by the channel number. If it sounds complex and unintuitive, it is. Not only that, it relies too much on manual inputs and prone to error. But, it is the only system we have for monitoring viewership. The advertising budget that is spent on various TV channels is determined by ratings..
There have been murmurs and sporadic raised voices for over a decade on the system of monitoring. There have been questions asked about the sample size, about large states being left out, about representation. There have been accusations of fudging the ratings. It was rumoured that for certain large sums of money you would get a list of households that form the sample. In turn you would give money to these households to indicate on the remote that they were watching the channel or programme that you represented.
Ratings always mattered, but, as competition grew, every fraction of a rating point counted. The agencies are squeezing channels on advertising rates. It is estimated that over 80% of all Channels are making losses. It is against this background that NDTV has taken on AC Nielsen in a court case on fudged ratings. And this has opened a floodgate of complaints across broadcasters.
This is an opportunity for broadcasters, agencies & clients for creating a robust rating system that is comprehensive, representative, allows for customer choice and is trusted by all industry stakeholders. It is about allowing niches to be created that can be targeted with appropriate content. It is about allowing diverse voices to be heard. And, that can only be good for the industry as a whole.