Delivering first of the special addresses at the NewsNext 2009 was Aroon Purie, Founder and Chairman, India Today Group. Purie took up quite a few important issues facing the broadcasting industry today, such as carriage fees, too many channels, but only a handful of them making money. He was, however, optimistic given the open and liberal attitude of the I&B Minister Ambika Soni.
Purie started his address by acknowledging, “Though it has not been the best of years in revenue terms. I am glad to have our new Minister (I&B Minister Ambika Soni) here and one thing that your presence has done very quickly is that you have soothed the nerves of the media industry. We certainly feel that nothing knee-jerk is going to happen here. The Government is not out there to get you, but to be with you. I think that is a great achievement in a very short time. We are a country which is constantly in a makeover.”
Commenting on the theme of the NewsNext 2009 – ‘Triumph over Travails’, Purie said, “Let me talk about the triumphs first. I truly believe that 24-hour news channels are a force to reckon with in India. They are doing a great job and are revolutionising the way we live our lives.”
“The number of news channels have mushroomed from six in 2002 to 95 in 2009 and still counting, and this is right across regions. With this exponential growth in news channels, viewership has grown from 18 million in 2001 to 101 million in 2009. That’s a tremendous growth,” he added.
Purie further said, “With this growth in the number of news channels and the growth in viewership has also come in the money. Advertising revenue has grown from Rs 150 crore in 2001 to Rs 1,300 crore in 2009, which gives us an annual compounded growth of 36 per cent. Which other industry gives such growth?”
However, the television industry is not without its share of problems. Picking up the travails, Purie said, “While the growing number of channels has led to the growth in the industry, there is also a problem of too many news channels. When there were six news channels, they all made money, and today there are 95 channels, but only a handful make money. The reason for this is the rising cost, and that too in one major area – distribution and carriage fee. When we started our channel Aaj Tak in 2001, our distribution cost was zero. Now carriage is the major expense item in our profit and loss statement, more than that that of our salaries. It now constitutes 40 per cent of the total cost of channel.”
Speaking further on the hurdles and problems that TV news channels face, Purie said, “Which business can survive a cost slide that constitutes one-third of the operating expenses, if it increases at this rate? The other problem is that revenue generating potential of the GECs are much higher that the news channels.”
Emphasising the fact that the cable operator did not care, he said, “They do not care which channel it is, the cable operator is selling his space as real estate and gives it to the bidder. Cable distribution has become such a profitable business that in certain states that even politicians are getting into it.”
Purie suggested, “I think that the Government should make it mandatory to be digitised within a certain timeframe. The consumers must pay for what they want to see and broadcasters must get a deserving share in that pie.”
The event partner was Encompass