 "The new rules of content")
Just a month before that Zee launched ZeeQ, its kids channel. One of its popular shows, Teenovation, is produced in association with the National Innovation Foundation. The show explores the stories behind innovations such as automatic food makers and shock absorbers for crutches, among others. By the end of 2013, Subhadarshi Tripathy, business head, ZeeQ, hopes to have a million subscribers paying Rs 82 every month to watch shows such as Teenovation.
Welcome to the new TV screen. The world's second largest television market is rushing to meet the 2014 deadline for digitising all of its 153 million TV homes. This is changing everything about the Rs 39,000-crore TV industry. And nowhere is this change more evident than in programming. (Click here for graphic)
The launch of three well-produced channels aimed at children in one year, the focus on youth and English entertainment are a result of the data that digital homes, already one-third of the total, are throwing up. (These include both digital cable and direct-to-home or DTH homes.) Going by Television Audience Measurement (TAM) research data for the first few weeks post digitisation, there are many more surprises. Like Tamil programming, which is growing off the charts in Delhi as you will read later.
“Digitisation is the biggest change that television in India has seen since cable and satellite took off in 1991,” says Sanjay Gupta, COO, Star India. This is because digitisation broadens the cable pipe, adding ten times as much capacity. In the long run, this eliminates carriage fees and increases pay revenues. These two things alone could bring back roughly Rs 15,000 crore to the broadcasters. By removing bandwidth shortages from the equation, digitisation changes the nature of the broadcasting game — from an eyeball-driven, advertiser-centric one to a pay-driven, consumer-centric one.
The game changer
In a hyper-competitive market, limited bandwidth meant that distribution was the core of a broadcaster's strategy, not the consumer."When you are in a primarily free-to-air (FTA) environment then you are chasing eyeballs at any cost and that gives rise to sensationalism," says Rahul Johri, senior vice-president and general manager, Discovery Networks, South Asia.
However, that's slowly changing with the arrival of DTH and the amendment to the Cable Act in 2011 that made digitisation mandatory. It means television signals can no longer be sold without a digital set-top box. The first phase of digitisation in the four metros of Delhi, Mumbai, Kolkata and Chennai was completed in November 2012, and the second phase in 38 cities is due to end on March 31 this year. There may be delays but the process is underway.
L V Krishnan, chief executive officer, TAM Media Research,reckons it is too early for clear patterns to come out, but three things are emerging.
One, sampling has increased, which in turn has led to a rise in the reach and time spent for several genres. There has been, for instance, a 58 per cent jump in sampling for English entertainment in Delhi, largely because of availability and the electronic programming guide, which improves a viewer's ability to navigate within a genre or between genres. Since there are no capacity constraints, all channels are available for anyone wanting to watch them in digital homes. "Our channels now rate higher in the digital universe than in the analog one because the availability is higher," says Johri.
Two, differentiation is now critical. This means that news, music, or any category with low or no differentiation will have few takers. For instance, one can access news anywhere, in newspapers, online or on free-to-air TV channels. So one would subscribe to a news channel only if there was something exceptional about it.
Three, digitisation helps increase the "long tail" of content either by shifting the place or the time of consumption. This allows broadcasters to reach out to new markets or smaller clusters of audiences profitably. For example, operators such as Airtel offer 27 Tamil channels (among others) all over the country. This means Tamil consumers anywhere could watch shows in their language. The combined Tamil offerings of operators has actually pushed up the sampling of Tamil general entertainment channels (GECs) and films by a whopping 76 per cent in Delhi, considered for long a "Hindi" market.
The growth of pay-per-view is another example of the long-tail effect. "A decent movie gets 200,000-300,000 views on DTH and this is a completely new revenue stream. You can try creating this window from day zero up to say day 21 or more. On day zero a film could be priced at Rs 1,000 on DTH, decreasing progressively and going to Rs 50 per view in the last phase," says Harit Nagpal, CEO, Tata Sky.
Content matters
The implications are clear. "The people who do not invest in content will be decimated," says Gupta. Star has been spending heavily on movies, dramas and chat shows such as Satyamev Jayate. Last year, it paid Rs 3,800 crore for cricket rights from BCCI, the board of control for cricket in India. In the same year, its Channel V morphed from being a music channel to a youth-oriented one after digital homes showed a clear skew towards youth programming.
"We see a lot more shows being commissioned by niche channels," says Anupama Mandloi, content head, Fremantlemedia India, the producer of India's Got Talent and Indian Idol, among other shows.
Srinivasan B, head, Vikatan Group, the company behind some of the biggest hits on Tamil television, reckons that markets such as Tamil Nadu that have been ahead of the curve because of superior and progressive storytelling will adapt well to the post-digital world.
Besides identifying and investing in content, packaging and pricing will become critical as well. Someone in Nagpur may want two Malayalam channels and your system should be flexible enough to give those. In the analog mode it wasn't possible to meet such demands, but the back-end investments in call centres and subscriber management software make it possible in digital TV. "The ability to handle customer preference at single channel level is the biggest advantage we (DTH operators) have," says Shashi Arora, CEO, DTH and media, Bharti Airtel.
The bugbears
However, several factors, besides the speed of digitisation, could deter content innovation. Mandloi points to one: "We need to either have a system (for data collection) which reads the digital universe separately or a system that addresses the entire C&S (cable & satellite) universe. Till that happens, there cannot be much change in the content for general entertainment platforms. We will continue to cater to the largest common denominator."
The structure of the content industry needs a reorientation as well. More than 70 per cent of the shows in India are commissioned. This means programme producers have no stake in the fate of the show, and therefore, no incentive to innovate. In the UK, for instance, producers own the intellectual property right over their ideas. This eggs them to create exportable formats such as Masterchef and Who Wants to be a Millionaire. In the US broadcasters have their own content production arms. So their interests are aligned.
There is also the concern of hyper-fragmentation, says, Anita Nayyar, CEO, Havas Media Group, India and South Asia. "The cost of reaching the audience will increase over a period of time. This will also provide the possibility of targeted reach (which is currently not possible)," says she. The upside is it will mean better yields for broadcasters.
The mysteries of what digitisation could do, will continue to unravel for a long time.