Wait for the action

FREEZE FRAME

The broadcasting industry is set to see a for a lot of action in the months to come. The conditional access system (CAS) imbroglio notwithstanding, almost everyone in the business agrees that the much-missed growth is all set to happen in Indian broadcasting.

It is estimated that of the 90 million TV households in the country, almost 55 per cent, that is, 50 million, are cable passed. A buoyant economy and rising ad spends together with aggressive rollout plans of Direct-to-Home (DTH) and broadband and internet protocol TV services should bring cheer not only to the broadcasting industry but also to the consumer. There will be more TV homes. More cable homes. More broadband homes. More value-added services. More TV channels. Hopefully the consumer will get more for less. Perhaps 2004 will be a year of change for TV as 2003 was for telephony.

Why is that something as simple as addresibility has become such a fiasco? That's because successive governments have failed to frame a comprehensive broadcasting policy. Piece-meal legislation has only added to the woes of an inorganically developed business. Cable operators are licensed by the post office. State governments levy sales tax on them.

A Union copyright law is seldom enforced by the police, which falls under state governments. Again a National Cable Act lays down absurd provisos like holding cable operators responsible for the content on foreign channels.The Central Board of Film Certification keeps making noises about censoring content. Two versions of Broadcast Bills have lapsed and one on convergence is dying a natural death.

There are different investment limits for different services, some ridiculously linked with the point of uplinking. The government continues to waste money on Doordarshan (Prasar Bharati), a slovenly, inefficient organisation which hardly does anything a public broadcaster should do. Whatever it does is more to do with state protectionism and its huge terrestrial network. Even the once creative All India Radio is becoming an archaic faceless monstrosity.

The FM radio chaos is only another indication of government ineptitude. The absence of a regulatory framework has created an inert environment where planned growth in an otherwise healthy sector is nearly impossible. After months of dithering, the CAS ball has been lobbed in the court of the telecom regulator. If the Telecom Regulatory Authority of India (TRAI) has to frame a broadcasting regulation, why not get a fully empowered Convergence Commission?

Well for that we will have to wait for much after a new government takes office after the elections. Meanwhile, in spite of the mayhem the feel good factor is palpable in broadcasting circles. All major broadcasters are hurrying to launch new channels. Zee has already started beaming 'Jagran,' a spiritual channel, and has several premium movie-based channels ready for launch on its DTH platform. Sony has announced the launch of its animation channel 'Animax' and is also reportedly looking at a lifestyle channel.

Disney should beam into India soon and Cartoon Network has brought in its Pogo as a pre-emptive move. A Hyderabad-based IT company is launching a children's channels. Rajat Sharma is starting India TV and Raghav Behal will launch a Hindi business channel.

Star, now that is DTH project is materialising with the Tatas, will not only bring several News Corp foreign channels but will launch a slew of niche channels.

Sun and Sahara too have ambitious plans of adding to their existing bouquets. So, in the next few months you should see at least a dozen new channels, with more to follow in the second half of 2004.

According to a report by Media Partners Asia (MPA), the Indian cable and sattelite TV industry grew by 27 per cent year-on-year in 2003 to $2.5 billion. The report goes on to say that it expects the industry's economics to improve in the long term with three competitive and addressable platforms (CAS, DTH, IPTV). The segmentation of the market into three different platforms should give consumers more choice and drive market penetration. MPA estimates that the subscription revenue in 2004 will cross $2.3 billion and the advertising revenue will be around $640 million.

I personally believe these numbers are on the conservative side. If we add Doordarshan's earnings and some peripheral revenue, the industry should be worth well over $3 billion this year. This excluding the broadband forays of business houses and companies like Reliance, the Tatas and Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd.

However, the problem of under declaration by the last mile operators and the consequent revenue leakages needs to be addressed seriously if the Indian broadcasting industry is to maintain its aggressive growth.

In programming there is much less to cheer about. There is clearly no major innovation happening. Soaps and movies will continue to dominate the general entertainment channels. The general elections will be a major driver for the news channels, both in terms of advertising as well as viewership. Cricket, specially the Indo-Pak series (Ten Sports) and the ICC Trophy (SET Max and Doordarshan), along with the Olympics, will help the sports broadcasters to bolster their bottom lines.

Another trend that's emerging is cross media promotion. The movies and music industries are leveraging ground events to attract consumers.

Some amount of interactivity is there with major telcos running dedicated SMS services. Reliance Infocomm with its R-World services on mobiles and its Web Worlds that offer video chats has been running several movie and TV promotions. This trend should catch on in the months to come.

There's a lot of action happening in broadcasting in India. Yet if India Shining is to be more than a mere TV commercial for broadcasters, they have to awaken to the huge potential. Creative innovation is ultimately the key differentiator between players. Simultaneously, the sooner ground distribution is put in order the better it will be for all stakeholders.

What can the government do? Create a basic regulatory framework and keep out of the way. I'm sure both consumers and the industry will be happy, if that happens!

Amit Khanna is chairman of Reliance Entertainment and the views here expressed are his own