Disruptive innovation in media: Regulatory imperatives

The recent season of the Indian Premier League, IPL, witnessed an interesting experiment with JioCinema carrying the matches in the free ad-supported live streaming mode for digital viewers even as traditional television viewers had to subscribe to pay TV channels. This pricing disruption was as much about trying to flip television audiences to digital as it was about a fundamental schism within the media and entertainment sector in India. Recent news about Disney’s woes in India even as the Sony-Zee merger has had to weather issues of corporate governance point to a deeper blight afflicting the industry. The malaise may be best understood from the manner in which TV audience measurement became a battlefield for competing interests over the past three years. While the news broadcast fraternity remains deeply divided over the integrity of the television ratings, the ratings framework remains trapped in a pre-Covid era model of the TV audience universe. JioCinema’s gamble on free ad-supported live streaming of IPL needs to be understood from this standpoint given how media consumption behaviour has undergone a fundamental shift during the Covid-19 pandemic.

While claims of demise of broadcast TV are vastly exaggerated, there is no denying the forces of technology convergence heralding the rapid shift towards on-demand consumption of content over smart and connected devices. This fast-changing media consumption behaviour necessitates the need for the audience measurement framework to provide a 360-degree view across digital and traditional broadcast to both advertisers and content providers. The unseemly manner in which the integrity of the TV ratings system has been undermined by both acts of omission and commission is a sad commentary on an industry that has failed to innovate and is now faced with disruptive business models posing an existential threat. As the chairperson of the committee to review the television ratings system in India, it was illuminating to me how the industry remained in denial of the malaise within while being reluctant to take the tough measures needed to restore confidence in the system.

The ratings system being hostage to dubious business practices such as landing pages and the underlying model of the audience universe being outdated has resulted in a perverse feedback loop. This effect is most pronounced within the news genre to perversely influence editorial decisions on both choice of content topics and the manner of content delivery guided by flawed ratings. Barring a few notable attempts at innovating news content through new digital channels and formats, the industry has little to show by way of content innovation. This perhaps explains the runaway digital success of the podcast series by the editor of a leading news distributor, highlighting how innovative and compelling digital content is having a deeper and long-lasting impact on audiences in stark contrast to the cacophony on prime-time news TV.

This failure to innovate in the face of shifting consumer behaviour to digital is most visible within the cable distribution segment that is facing an existential crisis. Regulatory interventions over the past few years aimed at continuing the life support to the cable industry have resulted in tariff controls on content, without a precedent anywhere else in the world, further exacerbating the distress within the media sector. Rather than allow the forces of the market and consumer choice determine the fate of an obsolete industry, the regulator’s misguided attempts at enforcing tariff controls have only hastened the shift away from broadcast to digital and DD freedish with pay platforms seeing a decline in subscribers. From seeking to regulate OTT applications to artificial intelligence algorithms, the sectoral regulator has cast a wide net of consultations, raising apprehensions within the broader industry from digital players to traditional media.

Disruptive innovation has been the one constant over the past two decades the world over, resulting in new ways of creating, disseminating and consuming content. India, with its centuries’ old traditions of story-telling, is a powerhouse of creativity. With perhaps the exception of the IPL, there is little that has emerged from India by way of innovative products or formats that have made an impact globally. From a stifling regulatory environment to a lack of vision, a variety of factors have contributed to this poor culture of innovation. The prospects, however, are not as dire, with promising developments in India in emerging technologies such as direct-to-mobile broadcasting (D2M) where India has the opportunity to lead the world. Similarly, artificial intelligence, with recent advances in large language models, holds immense potential for disruptive innovation within the creative industries.

Harnessing the potential of these promising technologies calls for a light-touch regulatory approach that incentivises innovation and creates conditions for competition where upstarts can disrupt markets dominated by larger incumbents through new business models and innovative products and formats. The recently approved legislation on personal data protection is a good example of such a light-touch and progressive regulatory framework that creates ample space for innovation and competition while protecting against harm. With its emphasis on conducting its proceedings digitally, it reflects the emergence of convergent design thinking in regulating a sector known for continuous innovations and disruptive business models. Such an agile and responsive approach to regulation becomes imperative for the broader media and digital industries. This is also the need of the hour if India is to emerge as a creative powerhouse projecting its soft power globally in line with Prime Minister Narendra Modi’s vision for Amrit Kaal.  

The writer is former CEO, Prasar Bharti