Imagine if restaurants started serving stale food when their chefs are on strike.
That is what television broadcasters have been doing for three weeks. Ever since the Federation of Western India Cine Workers went on strike there has been no fresh programming on Hindi general entertainment channels (GECs). For three weeks broadcasters have let prime time, which brings two-thirds of their revenue, remain open, undefended and sagging with reruns.
Even if broadcasters did not know that a strike was brewing (not possible), now that it is on, why are those highly -paid programming teams not in a huddle trying to keep viewers glued to channels. Why are there no blockbusters on any GEC at prime time? In case a broadcaster does not have a library, surely they can buy a few films. The average successful broadcaster is way over Rs 500 crore in revenue size. The three largest ones are bigger than that. Star India is about Rs 1,600 crore in revenues (not including its share of ESPN-Star Sports), Zee is Rs 1,949 crore and Sony is about Rs 800 crore in size.
None unfortunately have shown any pizzazz in the face of this crisis.
This means just one thing — they really don’t give a damn about viewers who have paid for their TV and advertisers who have paid for prime time. Some of India’s top broadcasters protest vehemently at the suggestion. Says Uday Shankar, CEO, Star India; “What the striking workers are proposing will eventually mean an increase of 30 per cent or more in content costs. In a softening advertising market, with a freeze on pay revenues, there is no way we can afford it.”
So all broadcasters with Hindi GECs decided to stand together and not blink. Adds Nitin Vaidya, COO, national and regional GECs, Zee Entertainment Enterprises; “Broadcasters decided unanimously not to do any original programming, not even to premiere films and to only use reruns. Big Boss and Saregama were the only exceptions. And that spirit has been maintained.”
It is a ‘spirit’ that broadcasters have rarely shown for the more serious structural problems that have brought them to this point. Shankar outlines some of these problems. “In every other market, subscription drives revenues and that is how broadcasters invest in content,” says he. He is right. More than sixty per cent or Rs 13,000 crore of India’s Rs 21,000 crore broadcasting revenues come from subscription, but only 20 per cent of that goes to broadcasters. Cable operators under-declare actual penetration. For years, broadcasters were all right with the situation, because under-declaration meant that the real penetration numbers never had to be proved. And they could always get a better share from the operators by ‘negotiating a higher declaration.’
It is only when the regulator, the Telecom Regulatory Authority of India, (unfairly I agree) froze tariffs in 2003, that stagnating pay revenues started pinching. Till then none of the broadcasters showed any enthusiasm for pushing for digitalisation or more transparency.
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Then came carriage fees — a charge by the trade (operators and signal distributors) for carrying a channel. Many broadcasters, especially new ones, actually upped the ante on it by starting a bidding war. This even while they were locked in competitive bidding for shows from top-notch content firms. Many channels paid ridiculous sums of money to (fading) actors to appear on their dance and reality shows, or to filch TV stars from some other channels’ highly-rated shows. As a result from about 30-40 per cent, content costs now form 50-60 per cent of total costs for most major GECs. With ad growth expected to fall and several advertisers actually voting with their pockets on lower budgets this year, the revenue squeeze is real enough to hurt. Therefore the brinkmanship and the ‘spirit.’
Going by the ads for fresh episodes in the newspapers this Monday, it is evident that broadcasters have won this battle. In spite of their clashing interests, broadcasters got together to fix a short-term, operational issue because their revenues were under pressure. If only they continue to show the same ‘spirit’, they could tackle carriage fees, transparency and lobby for a more even broadcast policy. That really is when their spirit could do some long-term good.
The writer is a media consultant and author of The Indian Media Business.