Did Sushil Kumar’s win on Kaun Banega Crorepati (KBC) give you that warm fuzzy feeling? Thank the English for it; KBC is based on an old English show, Who Wants to be a Millionaire.
It is, however, just one such show. Over 40 per cent of the “unscripted” or reality-show formats aired across the world in the first six months of 2011 were supplied by the UK. Britain’s Got Talent, Idol, MasterChef, X-Factor are British shows, created by British production houses that have gone on to be licensed in scores of languages and hundreds of countries, says The Economist in a recent article.
It’s not just reality shows. I would add that Britain is also the creator of some of the best written and produced television dramas and sitcoms — from Yes Minister to the latest shows like Hustle, Spooks and Sherlock. Many of these shows – like Hustle – are bought by American broadcasters – such as Fox Crime – after first being aired on BBC Entertainment.
How did a country where ad revenues from television are lower than those online become the wellspring of all things original on television? And what lesson does it offer to India’s television content industry, which is grappling with the issues of scale and creativity?
The answer is simple: intellectual property rights (IPRs), their ownership and the freedom to trade in them have made British production firms global powerhouses. The explanation follows.
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India has more than 600 channels, at least half of which need anywhere between five and eight hours of original content. This makes it a huge market. It is, however, very fragmented and competitive. It is estimated that there are more than 6,000 production firms, most of which are one-man shows. This means severe undercutting on prices and, therefore, costs.
For more than a decade now, ever since the TV broadcast market took off, investors have desired to put more money in content. There are at least half a dozen mandates from content firms that investment bankers have been sitting on for as long as I know. Yet deals are rare. The big blocks are: scale and profitability.
Only a handful of firms have managed to achieve any scale, Balaji Telefilms being the biggest with Rs 152 crore in revenues. A bulk of the bigger firms, such as Vikatan Televistas, are in the Rs 50-200 crore revenue bracket. The others are all between Rs 2 crore and Rs 50 crore, most being under Rs 10 crore.
Competition is not the only dampener. A bulk of the programming created, about 70 per cent, is commissioned. Almost every major broadcaster – Sony, Star, Zee – commissions its local programming and then owns the IPR. The remaining 30 per cent of the programming created in India is based on a telecast-fee or a sponsored model. This means the broadcaster leases airtime, say a half hour slot, to the producer. The producer then makes the show, sells the advertising time on it, and tries to recover the money he has paid to the broadcaster and makes a profit. In this case, the IPR rests with the producer. Roughly half of Sun TV’s programming, and all of Doordarshan’s, is based on this.
In the UK, a 2004 change in trade regulations ensures that the IPR is retained by the firm that makes the shows, not the one that broadcasts them. This was a turning point of sorts. Now production companies such as FreemantleMedia (Britain’s Got Talent, Idol) and Shine (MasterChef, Got to Dance) own the rights to their own shows. Therefore, they are very aggressive about creating formats that can be exported across world markets.
In India, on the other hand, this economic incentive doesn’t exist. Nor is anyone clamouring for it. Most producers are happy with the commission-based model since they don’t have the scale, ambition or appetite for taking the risk of owning the IPR.
Only three things could cause a shift. One, broadcasters are so strapped for cash that they prefer the telecast-fee model, in which they get cash upfront, instead of waiting for advertisers to pay up.
Two, digital and overseas revenues become so significant that some of the larger producers start insisting on owning the IPR even for commissioned shows.
Three, a media regulator or the government decides that the best way for this industry to reach scale, quality and global power is to ensure that IPR stays with the producers.
There is little chance of any of this happening in the near future. So don’t look out for any original formats from India, for now.