Has the Indian television broadcast industry grown up? Last week the Indian Broadcasting Federation (IBF) released the much-awaited self-regulation code. This 22-page document lays down the principles and the related guidelines that television companies should follow while creating non-news programmes. It contains the usual sensible stuff that all programming guidelines do.
The code, however, is peripheral. It is the fact it came about that is interesting to investors and anyone doing business with this Rs 30,000 crore industry. It implies that the men and women running the business have managed to sit down, talk and formulate a code. This is a far cry from the usual lack of unity this industry has shown in the 19 years since private television took off. Ironically, for an industry that influences more than 600 million Indians, television broadcasting has almost no voice and no lobbying strength to make regulators listen to its point of view.
Is this then a symbol of maturity? Will this “new” co-operative spirit help deal with some pressing business issues — price control or lobbying for higher foreign direct investment (FDI) or more satellite space in the direct-to-home segment? No, it won’t. It is a good sign, but it does not indicate that the IBF will become the National Association of Software and Services Companies (Nasscom) and that the television broadcast industry will become as big as IT — though that should be the aim. It simply shows that small positive steps toward co-petition are working.
Why does it matter? The TV industry is in big trouble. Even as ad revenue growth has slowed, content and carriage costs have doubled in the last four years. Meanwhile, pay revenues continue to stagnate at 10 to 15 per cent of the topline for most broadcasters. The operating margins for the industry halved in the last five years. The title of being the world’s second-largest cable TV market has not amounted to much — either in returns for investors or profits for media owners.
Higher limits on FDI in different distribution technologies, licensing in cable and dismantling price controls alone would release $2 billion in additional revenues. Take price regulation, for example. Cable prices have actually fallen in the last decade. Instead of using data to prove its point to regulators, the industry is busy fighting operators and distributors.
More From This Section
Much of this didn’t matter for long since growth in the first decade from 1992 to 2003 was powered by pent-up demand — from audiences and advertisers. Today, growth hinges on the industry’s ability to tackle these structural issues. That means everyone has to sit down and have a “chat”. They have to agree on the battles they will fight and back it up with data and lobbying power with the public, regulators and the trade a la telecom and IT.
Till about four years ago, none of the “sitting together and talking” was happening. Then, two things happened simultaneously.
One, new – and younger – guards took over at most major TV companies. Puneet Goenka at Zee and Uday Shankar at Star, among others, decided that it made sense to tackle long-term growth issues instead of fighting each other. Regulation soon became a priority for most bosses. Almost every CEO turned out for a closed-door interaction with the minister of information and broadcasting, organised by the Confederation of Indian Industry in New Delhi in April last year. Something like this was impossible earlier.
Two, news channels started coming in for a lot of flak. That is when the News Broadcasters Association (NBA) was formed in 2007. A content code was brought out in 2008 and a News Broadcasting Standards Authority started functioning under former justice J S Verma. Though complaints still exist and scope for improvement remains, the code has worked better than expected.
This is where the good news ends. The NBA, news code and, now, the non-news code could be made possible because the government forced the industry to do something . Left to its own devices, the industry has achieved little. What the news code and the non-news code show is that when the need arises, the broadcasting industry can get its act together.
Here is hoping that these guys chat more often.