Star India had recently announced that it would be offering its channels on reference interconnect offer (RIO) to multi-system operators. This will mean that Star India channels will be offered individually rather than in the form of a package. TDSAT further directed that all MSOs should either sign the new incentive based RIO or the old RIO starting today, November 10, or face disconnection of Star India signals. With this decision hanging in the balance, we asked marketers about their opinion on how this would impact the TV broadcast industry.
Impact of RIO
Most marketers were of the opinion that it was a positive move for the TV broadcast industry. Mayank Shah, Dy. Marketing Manager, Parle Products says that people would now select channels for quality of the content and value for their money. “If the quality is good, they would not mind paying a little more for that channel, as opposed to the other channels they are watching by default now, in which they find no value,” he said. This will have a huge impact on the viewership of channels that offer only one or two good programmes, as viewers will not select them, he said. “Channels will have to be more concerned about the quality of their content… they will have to offer good programmes all through the day so that consumers pick up their channel over the others… it seems like a positive model in the long run,” he added.
The new RIO could affect marketers’ decision about where to put their money, says Chandru Kalro, COO, TTK Prestige. “Marketers like us would pick only the top channels and all the FTA channels would be taken on the merit of where they are reaching. The important factors here are - who is the decision maker on the list of channels that are going to be taken and what is the actual data on the availability of the channels… People like us would play safe and pick only the top channels because they are more likely to be chosen by consumers than not.”
The other factor is the digitisation process. Anisha Motwani, Director, Chief Marketing & Digital Officer, Max Life Insurance pointed out: “The industry, even after the digitisation in phase I and phase II areas, has not yet moved to complete addressability. Channels today are still being offered as a single bundle and negotiations have happened on one aspect only, and that is price. There is differential treatment of small and big operators. The concept of packaging has not been implemented yet and as a result of which the true benefits of digitisation have remained unlocked.”
In this scenario, the new RIO could sit well with digitisation, introduce transparency. Sanjay Tripathy, Senior EVP – Head Marketing, Product, Digital & E-Commerce, HDFC Life said, “If you look at RIO, it is the deal with the cable operators. I think it will be pretty transparent in dealing with the distributor fraternity, so it will go with the digitisation economy. The pricing structure will empower both the consumers and the platform owners.”
Will it affect Star India?
According to Tripathy, Star India is confident about going ahead with RIO because they have evaluated their content. “That they are suggesting that consumers pay only for what they pick from their bouquet, means they are confident about their content and believe it will work better for them. They must have evaluated both sides,” he said, adding that the broadcaster would be well aware of how revenues will be affected if viewership goes down for any of their channels.
Shah too feels that Star India’s viewership would not be affected as much. “They have maximum programmes in the top 10 already…their viewership is spread across quite a few programmes… Considering their channels are already leaders in their respective genres, the new RIO will definitely benefit them in the long run and encourage other broadcasters to adopt the same model.”
As a media planner, Dinesh Vyas, GM, India, MEC, does not see the new system affecting Star India’s viewership. “I don’t think there will be any substantial difference in the ratings as far as the media planners goes. I don’t see Star Plus’ ratings going down and Star World Premiere ratings shooting up… viewers are already watching what they want to with 15 other channels”. He further added that Star would be looking to rationalise their revenues by adopting the RIO. “As far as the Star India goes they are rationalising their revenues very clearly by putting a price on a channel that is already popular. So if in the next two months if there is a keenly awaited cricket tournament happening, you will automatically see subscription charges for Star Sports channels going up,” he added. The only issue he says will be niche or less popular channels struggling to be picked up because of not being included in a package. This is something that happened after digitisation happened and the channels could not be sold individually.
The new RIO is evidently being welcomed by marketers, despite the fears of niche channels suffering and the pressure on the broadcaster to serve riveting content through the day.