How often do we pause and ponder about industry issues that have a bearing beyond just our rigmaroles? Share insights that can further the common understanding? Or, at the very least, point at things that need to be set right.
View Point - an exchange4media platform, will fill this void and become a source of understanding, action and perhaps some inspiration.
"Broadcasters are today putting the distribution and pay related issues as top priority and factor in new concepts like 'Opportunity To See'"
Amitabh Srivastava, - Network Development, GM Aaj Tak
Distribution of a channel is indeed the mantra for its success. There is a cutthroat competition between channels of different hues to attract more and more viewers and penetrate in as many C & S homes as possible. Ground distribution of a particular channel can be ensured with the help of cable operators and MSO's who control the distribution network of a given constituency in a particular city. The distribution aspect in the last year or so has become even more pronounced as almost every channel bouquet has turned pay, thereby opening up another revenue stream.
Unique content broadcasters and all other bigger players seem to be determined to ensure that this trickle becomes a healthy revenue stream fast. Some of the reasons driving this are Stratification of broadcasters into 'leading bouquets' and 'the rest' and Consolidation of cable distribution business
Some estimates put the total 'potential' subscription revenue to be close to Rs. 76 billion for 2002. These are however only indications of potentials and not anywhere close to actual revenue, since the actual revenues are much lower due to incidence of under-declaration and under-payments.
Keeping distribution as a key business driver, at Aaj Tak appointed a team of dealers to cover whole of India, with particular emphasis on North and Hindi belt in East India to assist the distribution team. At that point of time I guess we were the only channel to appoint dealers on Free to Air status. Aaj tak was fashioned as a digital channel and while cobbling dealership network, we took extra precaution to check the antecedents of individual dealer and his reputation in the market was the sole criterion of his appointment. They were allotted specific area of their operations and, in turn, they had to ensure a perfect, foolproof distribution strategy for the channel. We monitored their performance and gave suggestions for improvement wherever necessary. In order to increase our rapport with the cable operators, we went about traveling from city to city to ensure the availability of the channel to small operators and attended to their problems. We sought feedback from our dealers and implemented the sound suggestions that we received from them. We also appointed battery of technical staff to assist our cable operators and solved all their grievances not only related to our channel but in general. Along with the unique content this led Aaj Tak reaching out to 30 million households.
While India has almost 80% of China's population, the figures for TV penetration look dismal. For every one TV set that India has, China has 3.4 sets. With rising rural incomes and improvement of basic infrastructure like electricity and roads, India has significant scope for increase in TV penetration. The current growth rate is a pointer. The TV penetration in India increased by 13% in one year flat (01 vs. 00) to account for 79 million HHS.
As the basic TV penetration continues to grow rapidly, Cable and Satellite (C&S) penetration is almost galloping. C&S penetration grew by 23%, last year.
Exhibit 1: India and Rest of Asia - A comparison
(mn) TV households
(mn) CS TV
Penetration (%) CS TV
India 1,012 79 48 37.9
China 1,278 269 26 70
Thailand 62 13 3 0.4
Philippines 79 11 6 0.7
Korea 47 14 28 4
Source: Government of India Census, NRS-2001
As per National Readership Survey (NRS) 2001, total C&S homes has risen to almost 38 mn. This is a high 23% growth in connectivity in one year. 48% of all TV homes are connected to CS.
Exhibit 2: Estimates of TV and C&S hh in India
2000 2001 2002 E 2003 E
All India (mmHH)
TV 70.4 79.4 87.6 95.5
C&S 30.9 37.9 43.9 49.8
TV 38.4 42.3 45.8 49
C&S 43.9 47.8 50.1 52.2
TV penetration =TV HHs/all HHs/TV HHs.
All India (mmHH) NRS 01 & 00 % growth in Television and CS HHs projected
TV 13% 10% 9%
C&S 23% 16% 13%
As a corollary to the above, I expect Satellite TV to 'reach' more individuals. 'Reach' is the key matrix used by advertisers while accessing a medium and allocating marketing funds. 'Reach' typically implies %age of people that can be accessed thru a medium and is measured and reported by readership surveys like NRS.
As per NRS 2001, the reach of C&S TV was 43% in Urban India. In Rural India, the reach is abysmal 9%. Total TV reach (Terrestrial and C&S), is pegged at 82% in Urban India. C&S reach, in Urban India, should be looked alongside pint media. Reach of Print is 49% compared to 43% reach of C&S.
Broadcasters are also evaluating new concepts like OTS (Opportunity to See, a product from Media Reach Research) which gives the true picture of number of C& S households receiving a particular channel and it covers 292 one lakh plus towns in India.OTS is based on the fact that all C&S homes cannot receive all the channels and channel availability depends on type of TV set and frequency band on which the channel is delivered by the cable operator. The channels can be located on 5 different bands namely prime, tunable, mid, and hyper and uhf. Broadcasters at looking at OTS, which certainly would have an impact on viewer ship, and rating data.
Some estimates suggest that cable TV industry is poised for the next phase where the environment gets regulated, thru legal and quasi-legal interventions, and business receives fresh technology and investments.
Broadcasters will put the distribution and pay related issues at top priority and do all they can to ensure regulated environment and better disclosures.
Today stage is set for dynamic MSOs to grab the opportunity and upgrade their services thru fresh technology investments. They however, need to come clean on disclosure for a better long-term relationship with broadcasters. Average household subscription costs are also going up and helping MSO in better disclosures.