The future of television

What is the future of television in India? Will it become a more rural medium? It would seem so from the numbers released by the Broadcast Audience Research Council or BARC last week. It shows that the number of Indians watching television rose from 836 million (in 197 million homes) to 892 million (in 210 million homes). Of these, over 508 million viewers in 119 million homes are rural against 384 million in 91 million city homes.
 
A closer look at the numbers for 2016, 2018 and 2020, shows that just over half of TV viewers and homes have always been in rural India. More importantly, on time spent, which drives ad revenues, urban India rules. A city viewer spends an average of four hours and 27 minutes against three hours and 43 minutes for a rural viewer. Some of this may be because of lower sampling or electricity issues. The bottom line is, while rural viewing remains strong, so does urban. Television remains a mainstream, mass medium with the largest share of both audience and revenue in the Rs 1,38,300-crore Indian media and entertainment industry. The rise in time spent and TV homes across the country then is part of the growth trajectory.

 
 There are two signs of its future in the BARC, FICCI-EY and Media Partners Asia reports released recently.  The first is the clear delineation of the pay market and the free-to-air market — by homes and audiences across technologies and geographies. It is like two parallel ecosystems are being formed within the Rs 68,500-crore broadcast business. There are the 60 million-odd free-to-air homes — 40 million-plus of DD Freedish and 20 million that take only basic cable with no pay channels whatsoever. These are emerging as the biggest force in the Rs 25,100-crore TV ad pie. Earlier most Indian homes, perforce, took a mix of pay and free channels.

 

 According to the FICCI-EY report, in 2020, subscription revenues fell by 7 per cent, though TV homes rose. While pay TV still dominates, over two million homes moved away from pay as a result of the Telecom Regulatory Authority of India’s New Tariff Order, which makes it difficult for broadcasters to sell bundles. And it makes choosing channels a nightmare for consumers. Add to this the rise of a free platform (DD Freedish). It explains the growth of an unknown free channel like Dangal TV, the launch of Shemaroo TV, another free channel in the middle of the lockdown in May 2020, and the skyrocketing prices of a slot on DD Freedish. From about Rs 6 crore, the highest bid in the last auction earlier this year was Rs 21 crore, according to news reports. It is emerging as the most important platform in this ecosystem. This is also where YouTube and MX Player, the two largest ad-driven and largely free over-the-top or OTT brands in India, fit.

 
 If the increasing pressure on pay TV is pushing people at the middle and lower end to free content, at the top end, it is pushing them to subscription-driven OTT. According to Media Partners Asia, India had more than 50 million OTT subscribers in 2020. This is people paying anywhere between  Rs 100 and Rs 800 every month to watch good quality drama, films or documentaries on OTT. The three biggest players in this game — Disney+Hotstar, Netflix and Amazon Prime Video. The addressable market for this is the 67 million pay DTH homes and maybe another 10-20 million high-end cable homes. Towards the end of 2020, over 400 million Indians were streaming video. This figure has huge overlaps with the 892 million TV viewers.

 
This brings it to the second sign on the future. Will television lose to OTT?
 
 That implies that the two operate in distant silos, they don’t. They are critical to each other’s growth. TV is helping OTT scale up and vice versa. Some of the biggest OTT players in India come from broadcast firms (Zee5, Disney+Hotstar, Voot). More than 50 per cent of the viewership on OTT is catch up TV. Kedar Gavane, senior vice-president and head APAC, ComScore, had said to Business Standard last year; “The biggest shows on Star Plus will be the biggest shows on Hotstar. Ditto for Zee5 or Colors. How strong your content is on TV is the defining factor on OTT.” Of the top 10 Indian OTT brands, only three are technology firms, the rest are backed by studios or broadcasters. Globally, unlike print, broadcast firms have been proactive about investing online.

 
 Eventually, streaming will land on the TV screen a la the US. The price point of a smart TV (which is internet-enabled) is down to Rs 7,000 and broadband is now cheap in India. In 2020, smart TV penetration went over 25 million and continues to rise. At a conference earlier this week, Vivek Couto, executive director, Media Partners Asia, said: “TV is still profitable and scalable, often funding and anchoring key players’ investment and content offering in OTT; this is especially the case in Australia, India, Indonesia and Japan.” Even if the linear mode gets relegated to a smaller market, broadcast firms with their understanding of audiences and content will dominate the streaming business. This will be one long, happy partnership.

 
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