India is a price sensitive market and its media and marketing industry justifies the trend time and again. The Set Max-Parle controversy has posed a very pertinent question, which stands viable in contemporary times and the advertisers are asking for RoI. Should broadcasters sell their HD feeds as a separate package and not as a single bundle with their regular feeds?
A separate TRP for HD channels
In the previous story, responding to the scuffle with Sony over the HD feed, Pravin Kulkarni, GM – Marketing, Parle Products had mentioned, “Advertisers are paying for the complete property of IPL and not for any one channel of Sony. If we do not get both the feeds, then we are at a loss! Sony should have clarified this at the beginning”.
Vodafone, another lead sponsor of IPL, in the previous story denying any direct comment mentioned otherwise, “Our view is that Set Max should have made it clear at the time of signing of contract that HD feed would be separate.”
After the court’s interim relief, Set Max has carried Parle ads on its HD feed, but the channel insists that Parle will have to pay extra money for the feed. Parle, on the other hand insists that it would go as per the court orders but maintains that Set Max should have cleared the premium issue from very beginning. Many other advertisers have confirmed the fact that there was ambiguity on the part of MSM over separate window for HD feed but none of the advertisers other than Parle have taken the legal route.
A strong sentiment which is now burgeoning in the industry is that of accountability. Advertisers are, therefore, demanding a separate measurement mechanism of audiences on HD feed if they are to pay a premium. HD feeds of channels do not come with separate TRPs. If there is accountability over the number of audiences, the industry considers the premium charged to be justified. Accordingly, the perception which prevails in the industry is that the audiences who watch the HD feed are high-end with deep pockets, owing to the infrastructure of the HD feed (DTH & flat screen TVs).
Although the HD penetration in India is miniscule, the miniscule proportion of India is huge proportionally on the international scale. Thanks to the one billion market size! As per the FICCI KPMG report, HD subscribers account for less than four per cent of the existing DTH subscribers. However, the percentage of viewers opting for HD feeds has doubled during 2012. Growing HD subscription is, therefore, expected to boost DTH ARPUs.
Also, lesser breaks, high quality pictures and affluent audiences who can afford it, HD feeds have all the ingredients of elite feed. So a sound measurement mechanism makes it more credible.
Substantiating the lack of accountability on data on HD feeds, Pratap Bose, COO, Mudra Max said, “My unbiased view is that HD feeds show lesser ads and are high quality oriented. Affluent audiences, therefore, receive high picture quality with less breaks, which makes it quality oriented and not quantity oriented. Advertisers should therefore pay a premium amount for it with better negotiation. But since there is no data available as of now, this trend may come into play five years from now. One has to be certain about RoI as well. So if accountability exists over the number of audiences on HD feed, advertisers may pay, but in today’s times, this is not a possibility.”
Jeffery Crasto, Executive Director, Chrome Analytics and Media said, “If there is a break-up like analogue: 60, digital: 30 and HD: 10, then it makes sense for broadcasters to include HD feed as a separate package. But this break-up does not exist as of now, and till then no amount should be charged from advertisers. One should understand that the HD audience in India is very small and there is no point in paying for them separately and that too when there is no knowledge on their number.”
Sanjoy Chakrabarthy, MD, Zenith Optimedia, India, also echoes similar views, “I just have one point – no accountability, no money. I at least need to know on whom I am spending this premium money.”
But will broadcasters be ready for this. Rohit Gupta, President, MSM, said “We won’t be paying for a separate TRP. If advertisers want it, then they can source it from TAM. Don’t advertisers pay for premium properties on OOH medium? They don’t have audience measurement for that. They pay it on the basis of logic and location. Why create so much fuss about television?”
It is also felt that while DTH players charge an extra buck from the consumer for the HD feed, the channels too have the right to charge extra from the advertisers because they are taking the brands to a home which can pay extra.
Sports HD feeds need to be excluded
An interesting perspective seems to emerge when it comes to sports HD feeds. A President of a leading media agency in Delhi, on condition of anonymity, cautioned, “Fact of separate TRP for HD channel is fine, but for properties such as IPL and cricket matches, there needs to be a single window pricing for all. If they are asking from TRAI to treat sports channels separately over 10+2 ad cap, then why not consider the same for such issues. After all, cricket matches are bound to have more commercials than regular properties showcased.”
This would be another interesting perspective. For sports properties which are flooded with multiple commercial showcases, charging separately for HD feeds would not be a good idea as the number of commercials would almost be the same in all the feeds, unlike in other properties where HD feed has less commercials.
The future road
Approximately 36 channels across all genres such as GEC, infotainment, sports, movies are available on HD and the number may increase to 50 by the end of 2013 (FICCI-KPMG report 2013). It makes sense for the industry to have a separate mechanism to measure audience on such feeds. This would not only augment revenue for regular channels that in course of time will have to compete on the parameter of consolidated content with niche channels post digitisation, but would also give a valid reason to the advertiser to spend a premium amount for the audience possessing certain affluence.