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Indian TV Channels- market share Vs profit?

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There is a race. A race with no real goal. A race where anyone can compete as they are fed with ample food to get started, and then they are asked to RUN! But there is no direction and no ultimate goal, do you think the race will do any good to anyone in longer run? Or, do you think that at the end of the day it will be a blood bath? Or, do you think someone else will come up with a different kind of race and will win-it-all? Sounds interesting?

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Well, this is exactly what Indian TV Channels are facing right now! There is a race to get ahead of competitors without even knowing the real time response of consumers using it. Most of the channels are in losses including some big one’s and every investor is betting on future! But the very term ‘future’ in TV Industry is what which is very unpredictable! Future is NOT how much money Broadcasters will be able to pocket from advertisers but transformational technologies like ‘Pay-per-view’, ‘Internet TV’, ‘Online Videos’ i.e. services like Hulu, Google/Apple TV, Miso etc.

There are various genres in Television viz. GEC, Reality, Music, Business, News, Education, Kids, Sports, Comedy etc. Today one can see competition in every available genre (“Music” genre is no more since Indian music is constantly degrading in both quality and originality). In United States there are 3 major Television broadcasters (ABC, CBS, and NBC) and several others including Fox, MyNetworkTV, ION and The CW and this is a stable market now! But in India we currently have Star, Zee, TV18, UTV, Sahara, NDTV, Times TV, Sun TV, Doordarshan, 9X Media etc. Also, we should not forget to mention Big TV which is going to launch 8 new channels in India very soon!

What keeps these channels happy is the fact that there is an agency called TAM (Television Audience Measurement) which gives them a feeling that their shows are rocking among viewers and the fact that they can charge a premium on their ads based on reports from TAM. Very recently I read, that ET Now is now neck-in-neck with CNBC TV18 with an increased market share of 31%, lagging behind CNBC with a mere 5%! Now that’s some news to increase advertising costs per slot, isn’t it?

I’m not doubting these Channels performance here, but the high reliability, a bet on future these Channels are making, based on some reports and not reality! Reality is that the consumers are always confused what to watch, when to watch and how much to watch of what to watch.

Those ads which are shown on a Channel become the best excuse to switch over to a competitor’s channel. So on what basis they are charging a premier rate to advertisers?

Another story which I was reading, talks about how WB movies has grown up 50% over last year? Their ad revenue has doubled up since last year (no numbers disclosed), and yea no discussion on the loss numbers off course! When we dig into the news we can see that their reasons for growth include features like “single-break movie”, movies with maximum 2 minutes of ad-break etc. Did you get the point? You need to “engage” users in order to charge a premium for your ads. Reports always tell viewer-ship numbers based on how many viewers are watching the show but doesn’t (usually) include average time of show (i.e. total show time minus ads time) vs average time of watch (total viewed time divided by number of users watching the show).

Indian TV media is really getting into an speculative mode! I don’t know from where the investors are seeing money? If it’s based on an increase in RPU (Revenue per user) due to an increase in content revenue sharing, then it’s not correct! Because by the time Indians switch on to DTH and IPTV, “forced content” will be a thing of past, “pay-per-view” and “content-on-demand” are the future of Television. Don’t you think so?

  1. balaji yadhav says

    Now let me give my thoughts on the media industry cause i have a lot of experience on it (especially on the US media industry)
    In the US (the king of media in the world) the TRPs are measured demographically and even every 5 seconds.This would present a true picture to the advertisers.If Im an advertiser i would not feel obliged to sponsor a show which i know that the viewers will switch once the ad starts even though the program by itself has high viewership.
    Recently the CNN chief said that FOX NEWS is running over them because viewers of FOX tend to stick to the entire length of the program whereas a CNN viewer will switch within 5 minutes once they hear the news.The initial viewership in CNN is actually higher than FOX but they simply dont stick with it for the full 30 minutes.
    If a rating system similar to in the US is implemented then we can have a real picture.Demographics is extremely important in any viewership study even a person in the 20s like me watch channels like Disney,Hungama regularly but all the ads in these channels seems to target kids between ages 5-15 and moreover even kids in age group of 5-15 watch the late night movies in HBO etc where the ads seem to concentrate on adult groups.Once a rating on demographics is done we might have a surprising viewership data.Theres no point advertising in a popular program if people dont watch the full length of the program.
    As the ad space in our country grows we need to have mature/credible viewership rating machinery inorder to break the monopoly of TAM.

    1. rabi gupta says

      Hi Balaji,

      I’m really thankful to you for giving such great insight! Also let me know if you have some idea as to what difference in the techniques which they use in US as against meters set up by TAM here?

      Thanks,

  2. Shrikant Joshi says

    I disagree.

    Relying on the DTH industry is NOT a good idea. How many households in the country actually bother to turn off their set top boxes when not in use – say, at night? For example, I don’t. In fact, every time you call the DTH company for something (upgrade, renewal, etc.) they ASK you to keep the set-top box ON. That will drive up a channel’s viewership even though the consumption is actually zero.

    There is NO method that can actually collect accurate (or even, near-accurate data) – ask students in Media Research, they’ll tell you. TAM & its TRPs are used only because there is nothing better available – doesn’t mean it’s perfect.

    As for Pay-per-view & On-Demand Content, they will start making sense only after the humble set-top box becomes ubiquitous enough.

    Also, one more thing, every media house has some or the other figure that shows them to be “Number 1”. And yes, ALL figures come from credible, third-party sources. Who do you believe?

    Plus, the licensing & operational fees demanded by the govt. for setting up a media entity such as a TV network, radio station, etc. are so humongous that they are forced to charge high advertising fees, which in turn causes them to bend over backwards to accommodate the advertiser’s whims, which in turn means highly-intrusive advertising. And don’t blame the advertisers – if you were to advertise, you would want to squeeze every penny’s worth too!

    Sorry for the long rant. The subject’s been quite close to my life over the last three years. :)

    1. Arun Prabhudesai says

      Hey Shrikant…It is a very very interesting point you made – About research numbers and about how DTH numbers get bulged. Never thought of that…yes, not once have I shut my set-top-box :)

      What I want to know about this “Number 1” game is – Cant the competitors sue for giving out wrong information…Like you may know, one of of the FM stations in Pune calls themselves “Pune’s only music station”…How can that be when obviously there are 4-5 others..

      I think you are the best person to answer this :)

      1. Shrikant Joshi says

        That’s the beauty of hyperbole – you can’t be wrong if you word your claims correctly & then tag it with “Conditions Apply” to be on the safer side.. To point it out in the example that you have stated the sentence/claim can be read as “Pune only MUSIC station” – the stress being on MUSIC, while the others are “Pune’s RADIO stations” – the stress being on RADIO.

        So you see, no one’s wrong and everyone’s right at the same time! :)

        The catch lies in the way YOU define Number 1. If I were to advertise myself, I’d probably call myself the Number 1 commenter on this post – in terms of comment length! Or maybe even the Number 1 commenter on trak.in – based on the average number of words per comment!

        See what I mean? :)

        1. Arun Prabhudesai says

          Shriks….yeah got it – Thanks for taking time to explain. Play of words…thats all !!

          In the end, consumer is taken for a ride :( . But thats Business…

    2. rabi gupta says

      Hey Srikanth you made some real good points there. Thanks for digging deeper! The point you made about DTH box is absolutely correct, and the other fact is that we can only record the timings when a particular channel is switched and that doesn’t tells the DTH other important details like- who is watching the TV, whether the Channel is switched due to Channel content or Ad etc. Can you connect me over rabi[at]idubba[dot]com? Would like to discuss out few things with you :)?

      1. Shrikant Joshi says

        My pleasure, Rabi. Plus, you have made some more interesting points yourself!

        My email id is contained within the comment’s details. In case it is not accessible to you, I will also be sending you a separate mail at the address you have mentioned.

        In corporate slang, “Let’s take this offline!” :)

        1. rabigupta says

          Shrikant: Thanks. Have added you over Gmail. Will get back to you soon :)!

  3. Aditya says

    Interesting post. Its true that the Indian TV industry, for a lack of a reliable model uses speculation and exaggeration to drive up advertising. With DTH, actual user viewership is being now captured by the likes of Tata Sky, who know how many sets played what channel at what time. The aggregate of DTH reports will be far more accurate than whatever TAM can provide using its surveys. Moreover, the shift to online videos for TV content is already happening in US, and as soon as India can get enough broadband, it will start here as well.

    1. rabigupta says

      @Aditya: thanks for bringing this out. I hope DTH industry can give some sane data to open the eyes of both broadcasters and advertisers. But that’s something which is yet to be seen, plus it will only help those who are looking at the program’s data and not user’s data.

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