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NewsNext 2010: Relevant subscription charges - the only means to build a successful revenue model

03-September-2010
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NewsNext 2010: Relevant subscription charges - the only means to build a successful revenue model

Revenue model for news television came under the scanner at the exchange4media NewsNext 2010, held in Delhi on September 1. The panel was chaired by Rahul Kanwal, Editor-in- Chief, Headlines Today, while the panellists included Sandeep Lakhina, COO, Starcom Worldwide; Seema Mohapatra, Regional Director – Advertising Sales, South Asia, BBC Worldwide; Avinash Pandey, Vice President, Ad Sales, MCCS and Sandeep Sharma, SVP, Sales and Maketing, Times Television Network. The industry experts agreed that subscription model was the way ahead to generate revenues in the news television business.

Kanwal kicked off the discussion by asking a few rhetorical questions- whether there is money to be made in the news business and if at all there is a successful revenue model. Sandeep Sharma began the discussion by saying “There are too many new players entering in the genre of news, so much so that the genre has become crowded and cluttered. This is one of the problems as to why a successful model could not be conceived. The market is constantly adding news players and there are new problems to cope up with. However, the news genre has galloped over the years. The ad-sales revenue too has done well of late,” added Sharma.

Adding to the discussion, Pandey said “There is a revenue model, but no profitability model. The business model followed today is probably not right.” However he was quick to point out that “The ads that comes on a news channels, as compared to other channels such as GECs, are manifold.” Even as the news channels are doing better than their counterparts, there is not one profitability model in place yet.

Sandeep Lakhina too agreed that there were too many channels entering the genre of news because it is profitable. From a consumer perspective, it creates a ‘disconnect’ of sorts. “The most important thing for any news channel is still credibility, without which they will falter”, added Lakhina.

Seema Mohapatra saw a flaw in the way news channel business is running in India, which is increasingly dependent on the advertisers. She voiced her concerns by comparing the Indian model with those abroad and said “Indian channels need to get relevant subscription fee. This will decrease the dependency on the advertisers and help build a successful revenue model.”

The panel accepted that there is an increasing dependency on numbers today against credibility. Often, advertisers go for channels with higher numbers, rather than those with higher credibility. Hence, to create a successful revenue model for the news channels, one has to be creative, at the same time operate within the editorial guidelines.

Soon, news channel across India will have to become a paid channel to create revenue. If the content is compelling, people will watch it. People have to be inculcated with the habit of paying for news, in the same way as they pay for newspapers. However, Lakhina said that one has to approach the Indian market with kid gloves. “It is not always feasible to apply the global standards to India, because India is different and more diverse from the rest,” added Lakhina.

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