As developments in the broadcast industry propel TV players to be more accountable and transparent, the President of the Indian Broadcasting Federation, Man Jit Singh, feels that in spite of questions over tractions of advertisers with other media, TV remains a strong medium for advertisers as well as audiences.
In an exclusive conversation with exchange4media, Singh, who is also the CEO of MSM Network, speaks about carriage fees and content strategy post digitisation, among other things…
Media experts cite that the 10+2 ad cap will augment the scope of the sector, irrespective of the timing of its implementation. What are your thoughts?
Apart from everything else, I think, the biggest winner here is the consumer. Secondly, over the time broadcasters will be bound to increase ad rates as the supply of ad time would be curtailed, but the demand is either the same or growing; so this has to be complemented by increase in inventory rates.
Thirdly, content is king. So good quality content is imperative! But, as a medium, TV is still the cheapest way to reach the audiences and the advertising fraternity knows it very well. Hence, the regulation is good for the industry-scope in the long-run.
Do you think broadcasters will be compelled to rework or change their content strategy?
As I said, TV is still the cheapest medium and RoI is huge as compared to other media, so it won’t make much of a difference to the content strategy as such. But having said this, the player with the best content will surely lead the way.
Do you agree that 10+2 regulation and digitisation have benefitted niche broadcasters more than the GECs?
I think it has worked for everyone. 12 minute rule brings discipline and most importantly, it benefits the viewers. It is very good initiative and the industry is realising that.
In terms of digitisation, certainly some niche channels have benefitted as they get sampled more because of their availability. But here too, if the content appeal and quality do not resonate with the viewers, it would be of no use. For all the broadcasters, lesser carriage fees, higher subscription revenues are becoming reality and this is a positive sign for the industry. That means it is benefitting not only niche channels but also general entertainment broadcasters. This is largely affecting the entire industry.
How much has the carriage fees been reduced post DAS Phase I, and how far do you think the fees would be reduced in the future?
For IBF members, the reduction is anywhere between 15-20 per cent. Part of this reduction is deliberate. The reason behind the deliberate factor is that the MSOs have put in a substantial amount of investment to install the set top boxes. Though, as broadcasters we might want to get benefits of digitisation from day 1, the reality is that we have to first enable those (MSOs) to get a return on their investments. Therefore, we have to be a little patient in the recovery process, but slowly over time, we will realise full benefit.
We have started with small benefit of 15 per cent in some cases to 20 per cent in others, but over time this figure would be substantially more. The carriage fees may potentially go down by 80 per cent from the peak. The subscription rate should double or triple. Therefore, channels will rely more on subscription and less on advertising, which again will benefit the industry as a whole.