In the year 2014 there were significant developments that took place in the television industry in India. Many of them were originated in the previous year but yet were not completely culminated, creating roadblocks in the path forward for the industry. One was digitization and its implementation which broadcasters have found as the biggest impediment to the progress of the industry. If 2013 was year of turbulence for the broadcast industry, 2014 didn’t quite see the storm pass by. We take stock of some of the crucial ones.
This was the biggest roadblock in the industry according to broadcasters. Not only was the implementation of Phase III & IV deferred by a year to end of 2015 and 2016 respectively from the end of the current year, but there were also significant issues faced by broadcasters with the implementation of Phase I & II of digitization. Addressability and on the ground implementation of the first two phases had not seen the changes expected to be brought in through digitization. Tiering of channels into packages for distribution still has not happened post digitization. As a result broadcasters feel that though they have moved to the digital from analogue systems, the ground reality is that things remain still the same. Transparency has still not appeared post digitization.
Current status: Many markets still remain in the analogue system. The government, in November 2014, held the second Task Force meeting with indigenous set top box manufacturers. This is after Narendra Modi’s flagship campaign ‘Make in India’ came to prominence. With the new government coming in the signs were initially positive for the expedition of digitization by the former Ministry of Information and Broadcast (MIB) Prakash Javadekar announcing that digitization will be back on track. However, a few months later a delay in digitization was announced. Currently, Arun Jaitley, the MIB minister, is looking to get the process back on track.
10+2 Ad cap:
The 10+2 Ad cap is another issue still continues to be an issue broadcasters are grappling with. It began in March 2013 when the Telecom Regulatory Authority of India (TRAI) reinstated the Quality of Services norms (QoS) as per CTNR laws, 1995 for broadcasters. This basically restricts broadcasters their advertising time to only 12 minutes per hour of programming. This includes 10 minutes of commercial advertising and 2 minutes of self promotion. The move had been met by stiff protest from News Broadcasters Association (NBA) which had filed a petition against TRAI in the TDSAT. Other channels opposing it include music channels such as 9XM, B4U, etc., regional channels and some networks too have opposed the move.
Current status: Hearings for the 10+2 cap ad cap case have been deferred for almost the entire year, with the final date of the hearing being January 21, 2015 after it was deferred from November 20, 2014. The reason for this was because the High Court didn’t have sufficient time to hear the case. The previous hearing for the case was on May 6, 2014, Saket Singh, the counsel for TRAI, the respondent in this case, pointed out a few broadcasters have been found violating the ad cap rules, with the violations sometimes extending to almost 20 hours a day. The counsel had pleaded for an early hearing in the case. At its December 2013 hearing, the Delhi High Court had given temporary relief of around three months to broadcasters when it asked TRAI not to take any coercive action against the news broadcasters for not following the 12-minute mandated ad cap.
TRAI in February 2014 released a paper aimed at breaking up the distribution aggregators which it saw as a cartelization from major Indian broadcasters through distribution firms which they hold a stake in. The paper mandated that distributors cannot bundle channels from various networks and broadcasters while at the same time selling content to various cable operator and DTH platforms companies. It further said that only broadcast companies belonging to the same group can bundle their channels and offer them in bouquets separately.
Current status: This has resulted in the breaking up of all major alliance within the distribution aggregators. MediaPro that was a joint venture between Zee Turner and Star Den dissolved in April. It was followed by the dissolution of Indiacast UTV (Viacom18’s Indiacast and Disney UTV’s broadcast arm) in June 2014. Leaving only One Alliance (Multi Screen Media – Discovery) which recently announced that will be ending their partnership on January 1, 2015.
On October 28, 2014 Star India announced that it will only be offering its channels on a reference interconnect offer (RIO) to multi system operators (MSOs). Star India further came out with a revised RIO which offered MSOs incentives on the basis of reach, Star channels being carried and logical position of the channels. The Tribunal Disputes Appellate Tribunal (TDSAT) had further directed all MSOs to carry Star India channels on RIO from November 10. Failure to sign either the old RIO or the revised RIO agreement would mean disconnection of Star India channels. This initiative of Star India was to push for more transparency in the system and make MSOs and LCOs declare subscription numbers. It is also an endeavour by them to bring digitization into force by allowing customers to choose channels on an a la carte system. In the process the system also eliminates the carriage fees that Star India has to pay to MSOs to distribute their channels.
Current status: A majority of the MSOs are carrying Star India channels on RIO basis. With each MSO choosing what will be in the base pack there are many who choose to carry channels such as Star Plus, Life OK, Movies OK, Star Gold, Channel V, NGC and a regional channel. However, apart from these channels subscribers have to pick additional packages for the channels they want. It remains to be seen how other less popular channels have been doing in terms of the subscription numbers. Star India has definitely taken a risk but they are confident it will work in the long run with content growing stronger on each of their channels.
Broadcast Audience Research Council (BARC) which was to roll out its audience measurement tool on October 1, 2014 and become the second currency for TV measurement after TAM. The audience measurement agency, which is comprised stakeholders such as broadcasters, advertising and media agencies, wanted to create a system of measurement that was more robust and covered all the gaps faced in the TAM ratings. This ambitious project will see the increase of audience measurement meters increase to 25,000 from the 10,000 meters of TAM. Added to this it will be placed in more markets all over India and will also compile data on the categories such as education, consumer durable households, income, etc.
Current status: Initially expected to be launched in October 2014, it has now been deferred to early next year although no confirmation on the date or the month has been given. Currently testing of the system is still going on. The postponement of the system’s launch and operations was said to be due to the sheer scale of the set-up, technological rechecks to assure the completeness of the process and results, data availability issues, costs and avoiding plausible anomalies like with the IRS 2013 data.
Other developments: The year 2014 saw the launch of many new channels. In the Hindi GEC space channels such as Zindagi, Sony Pal, and Epic were launched. Sony Max 2 was the latest channel to be launched in the Hindi movie space. Among the English GECs we saw channels such as FX, Fox Crime and premiere channels like Star World Premiere being launched. Discovery launched its new channel Investigation Discovery. There was also the channel brand refreshment of channels such as Zee Studio and Zee TV. In the year 2014 many broadcasters also spoke about content costs going significantly higher than the previous year. A lot of investment was made on the back of digitization and as a results newer markets opening up. However, many say their ARPUs have still remained the same despite the investments. The year 2014 also saw the emergence of different sporting leagues in India other than cricket. This included Kabaddi, Football, Tennis, Badminton and Hockey. Various domestic leagues were created for them but some such as the Pro Kabaddi League and the Indian Super League emerged as winners.