The ministry of information and broadcasting has been displaying schizophrenic behaviour for some time now. The government branch that functions as the policymaker for the Rs 83,000-crore media and entertainment industry has in the last few months made some pretty ad hoc and counterproductive moves. Some of these steps could undo all the good that the ministry has been doing. Here are three examples.
In 2011, the ministry made digitisation of television mandatory, thereby tackling the biggest structural problem with the Rs 40,000-crore TV industry. Just when the industry was starting to invest in the infrastructure that would make pay revenues a reality, the Telecom Regulatory Authority of India (Trai), India's broadcast regulator, started enforcing an old rule stipulating only 12 minutes of advertising per hour. There is nothing wrong with enforcing the rule - except that it made sense to do it only after digitisation, which would tackle the fundamental reasons why advertising duration was irritatingly high.
Why not wait for the process, which is almost 100 per cent complete in the three metros plus 38 towns, to be completed in the rest of India? Many smaller channels in news, music or movies are now looking at annihilation. This is because pay revenues haven't started coming in even as the rule on advertising time has kicked in, pushing down substantially what they make from advertising. The big broadcasters, who control 70 per cent of the total time Indians spend watching TV, are enjoying the prospect of smaller rivals getting kicked. It makes the market less competitive and, therefore, increases rates for both advertisers and consumers. Surely, that is not the outcome the ministry intended?
Take its strange reluctance to action the policy for the third phase of the licensing of 839 FM radio stations, cleared by the Cabinet in July 2011 - even as the licences for the second phase (2005) are set to expire. All the stuff that the proposed policy tackles is now happening in a haphazard fashion. There is a Trai consultation process on the licences due to expire next year. The consultation process will lead to and ensure the "survival for radio networks whose licences start expiring from April next year," says Uday Chawla, secretary general, Association of Radio Operators for India. In October last year, a public interest litigation filed in the Supreme Court questioned the ban on news on private radio networks. The Supreme Court has now lobbed the ball back to the government. For those who don't know, the phase-three policy allows news on radio.
Why is the ministry allowing this disaggregated, disorganised, somewhat random discussion - and implementation - of a good policy that it has thought through, articulated and got Cabinet clearance for?
Here is another one. After years of inaction, the Broadcast Audience Research Council, or BARC, finally got its act together to think through a better way of doing ratings with a larger sample and at a lower cost. The new ratings under the BARC should be out by October this year. But the ministry, for some reason, still found it necessary to issue a set of guidelines for rating agencies early in January this year. Many of these guidelines, which may or may not apply to the BARC, are somewhat too specific and strange. There is a need for nodal officers, grievance cells and a toll-free number to address complaints. For a small business-to-business service, the guidelines impose an unusually heavy cost.
They give existing agencies, which currently is only TAM Media Research, 30 days to untangle their cross-holdings in advertising, broadcasting or other related businesses. TAM is owned by Kantar Group (a part of global marketing services major WPP) and Nielsen. While the stipulation is fair, 30 days is too short a period for a large international firm to untangle its stake. Kantar has filed a suit against the government in the Delhi High Court, so it may buy more time. However, chances are that we are up for a rating-dark period when TAM's ratings aren't there and nor is BARC. This will cause chaos.
Ratings are an industry metric. The industry was lazy about fixing them even though they were faulty - but that still does not merit a government mandate detailing everything from sample size to audit procedures. If the new ratings are robust, TAM will lose customers. Or it may invest heavily to improve its services. That is the market-oriented way for things to pan out. Why policymakers are muscling in on this territory is not clear. And if the government can mandate such detailed rules for how TV ratings should be measured, then can it also dictate how newspaper readership or box-office gross for films or statistics for a website should be researched, audited and analysed?
The ministry of information and broadcasting is unique because it is the policymaker, regulator and one of the biggest advertisers. This creates tremendous conflicts of interest anyway. By micromanaging issues or coming out with counterproductive policies, the ministry is causing long-term structural harm to its own power and to the industry's growth in the long term.
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