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DD Freedish auction called off, private TV channels to lose huge ad revenue

12-October-2017
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DD Freedish auction called off, private TV channels to lose huge ad revenue

Following the decision of the Ministry of Information and Broadcasting (MIB) to withdraw TV channel slot auction process from platform DD-Freedish, private TV channels are bound to lose huge advertisement revenue. It must be mentioned here that most of the big private TV channels have become FTA channels due to the availability of DD-Freedish reach at a nominal fee and as a result there was a sudden increase of their TRPs, directly also boosting their ad revenue. In fact few of private TV channels which are still a pay channel for private DTH platforms and cable operators have become FTA for DD-Freedish.
The last e-auction took place in July, in which DD-Freedish had earned Rs. 85.10 crore and awarded slots to 11 private broadcasters. Another auction scheduled for August was cancelled by the broadcaster, citing “administrative reasons” as per the notice dated 18.8.2017 (see letter).
DD-Freedish used to hold e-auction once in every couple of months to award vacant channel slots on DD Freedish to private broadcasters. At present, the platform carries 80 TV channels, including private entertainment channels Star Utsav, Sony Pal, Zee Anmol, Rishtey and news channels Aaj Tak, ABP News, Zee News, and News 24 to name a few. At present the platform has two vacant slots but the number will increase to about 10 by the end of this month if no decision is taken by the ministry.
In the last three years, large broadcasters including Zee, Star and Sony have been leveraging the DD-Freedish platform to access the DD stronghold markets by broadcasting their respective content. It is estimated that DD Freedish increased its reach to around 25 mn households in a run-up that is faster than the growth of the entire DTH industry in the last few years. The advertisement revenues of private TV channels have increased manifold. For the year 2016-17, Doordarshan earned more than 30% of its revenue from Free Dish at Rs 264.17 crore, the highest-ever revenue earned from the platform. Overall, the broadcaster earned Rs 827.51 crore in the year ended 31 March, surpassing its annual target of Rs 800 crore, suggest media reports.
The Indian rural market, largely untapped, was hugely being covered by Freedish. Needless to say, this move is now posing as a serious roadblock. Also, the suspension is not in the interest of private broadcasters as they earned heavy ad revenue from Free Dish.
Reports said private broadcasters, while paying an average of about Rs 6-8 crore per annum to DD-Free Dish were earning Rs 500-700 crore per channel in advertising revenue due to the high reach obtained via DD-Direct while relegating DD channels to the category of unwatched channels. This resulted in DD losing hundreds of crores of its own advertising revenue.

More importantly, a review of ratings of channels on DD-Free Dish indicated that the ratings of Doordarshan were not even 10% of the ratings of the private broadcasters. The top rated 15 channels on DD-Free Dish platform had ratings which ranged from 50-80 and almost all of them were private TV channels. DD channels lagged far behind with ratings of zero to three as they were going unwatched, a reason they lost out on advertising revenue due to dismal viewership ratings.

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