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?
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?