Is there a case for having a ceiling on how often and how much any media should be measured? The latest Indian Readership Survey shows once again how little the variation is quarter-on-quarter in newspaper readership (see “Timing issues in checking on media readership”, Business Standard, October 5, 2011). No one disputes the usefulness of quarterly readership data. There are launches, new editions, supplements or innovations in content or marketing almost every day in some city or the other in India. A quarterly view allows publishers and advertisers to track the impact of changes better.
However, it also becomes the reason for rate negotiation every time there is a fall of a few thousand copies. As any analyst will tell you, it takes a long time to build newspapers. Unlike television viewership, readership and circulation rarely move overnight. But most media buyers and advertisers use high-frequency or in-depth data to drive down rates instead of using them to monitor trends. This is true across the media.
Take a look at TV and the internet. On TV, it is easier to track how many people have watched a show and for how long. As competition has grown to 650 channels, and counting, ad rates for TV have either stagnated or fallen. This is what some patchy cost per thousand or CPT data and loads of anecdotal evidence suggest. The financial data are more conclusive. In the five years ending 2009, operating margins for the Indian broadcasting sector had halved to about 13 per cent. This has been largely owing to stagnant advertising revenues, the bulwark of most broadcaster balance sheets.
On the internet too, there are a lot of data, all on a real-time basis: who went where, watched what, clicked where, paid how much and so on. Yet, advertising rates for the internet are lower than those for many other media.
Now look at the print media. Outside of some basic demographics it is impossible to know what a person has read in the 25-odd minutes he spends on newspapers every day. Not coincidentally, print is best placed when it comes to ad rates and margins.
Put all media together and in a market with 700 million TV viewers, 330 million newspaper readers and 100 million surfers, ad rates have not grown in real terms. According to data from Media Direction, the specialist media arm of R K Swamy, media inflation has remained steady at 7.5 per cent from 2001 to 2008. That means in real terms the cost of buying advertising on any media in India has fallen hugely. A bulk of that fall comes from television.
It would seem, therefore, that in a hyper-competitive market too much measurement is a drag on the bottom line. Excessive competition has made the $17-billion Indian media and entertainment market a buyers’ haven for advertisers. But it has also eroded huge amounts of value.
That brings us back to the question: should there be a ceiling on the frequency and depth of data on offer till the market matures a bit? Can it act as a lever for ensuring profitability? Another way of doing that is to limit competition itself. For example, Indonesia is one of the fastest growing, most profitable TV markets because TV licences are scarce. The two players who have them are happily placed.
You could argue, rightly, that competition is good — and so are robust, granular metrics. Each industry fixes its own metrics in tandem with industry bodies and research agencies, so it is their business to negotiate on the frequency or depth of information.
That is what news channels are now doing. They want ratings data to be released on a monthly basis instead of weekly. They contend that the chase for eyeballs is harming the quality of content. Though content standards have been falling, to conclude that ratings are to blame is incorrect. India has about 130 news channels, unheard of anywhere in the world. Many belong to politicians and local builders who are more interested in using it as a power tool than as media to disseminate news. So you have a bunch of serious news broadcasters keen on making money, fighting a not-so-serious bunch burning capital for the heck of it. This forces not just undercutting of prices, but also a race to the bottom of the heap in programming standards. How can fixing the metrics help?
Of course much of this may be evolutionary. One round of consolidation, three-four big players in each segment and suddenly this whole discussion will be history. Then we will be discussing monopolies and what they do to media markets.
