Business model of the factual entertainment genre needs some tweaking: Avinash Kaul
Avinash Kaul, Managing Director, A+E networks I TV18, and CEO Network18, talks about the impact of NTO, the Election Commission documentary, market share of Network18 channels and more
The business model of the factual entertainment genre needs some tweaking, says Avinash Kaul, Managing Director, A+E networks I TV18, and CEO Network18.
In a chat with exchange4media, Kaul elaborated on his ideas for the business model, the impact of NTO and the documentary ‘India Inked: History’s Biggest Elections’ that will premiere on History TV18 at 9pm tonight.
The documentary has been created in association with the Election Commission of India which talks about the many faceless individuals of the whole polling exercise. The content will be telecast in English, Hindi, Tamil and Telugu. Kaul explains why the documentary was necessary and how.
The documentary seems like a celebration of the whole election process. Was it a conscious decision to not get into the nitty-gritty of the process?
The intent wasn’t that, but it wasn’t to find faults in everything either. Many instances happen in any such large logistical exercises. We as content creators look at the big picture. It’s just the size and scale and the fact that it is happening at such a level in that time frame and that is a reason enough. It just opens people’s minds about how complex it really is.
Are ad rates hiked for documentaries of such nature?
Yes, they are. It is somewhere around 4 to 5 times more.
You mentioned that the business model for the factual entertainment genre needs some tweaking. Can you elaborate on that?
If you see the movies, they were mostly theatricals. Then the music rights started getting sold followed by satellite rights separately. There are all kinds of rights. In the factual entertainment genre today, the content that we produce, the return is based on just subscription and advertising revenues. A lot more can happen by looking at digital platforms or syndicating opportunities with content travelling across the world. Even the subscription model is just in its infancy. So by the time it settles down and the true value is effectively taken out, it will take a certain amount of time.
Now we have consumers willing to pay Rs 750 a month for platforms like Netflix and we also see them come up with Rs 200 plans for mobiles. There is a huge spectrum just for one entity. Here, there is no entertainment channel in India who will ask for Rs 200. As regulators, we believe that the price should be as low as possible. When you look at that, you are looking at volumes more than value, that’s what affects the content and its production value. What you see in OTT or global syndicated content, it’s high quality because the business model is not based on just one geography, but across all streams to make the product viable.
So what according to you are the pain points that are obstructing it?
It’s not a pain point just for the genre but generally per se. Like people’s adoption of paying for content, the regulator has now made his first attempts to be able to exercise their own choices. The complexities at the local cable operators, MSOs in terms of invoicing, making different packs available are a logistical challenge by itself.
This industry was not built by broadcasters alone. It was made by local entrepreneurs who made cable networks. All kinds of things need investments. Business models need investments and these are the things which will take time to happen. Then you will see lot more corrections happening. You are already seeing some in Bollywood and you will see it here too. You are seeing a lot of co-productions coming into play where the cost of content is shared between multiple players. That will lead to great quality of content being played. We have already seen two OTT players talking about associations. Those are the models that I am talking about. The value for the viewer will be far more.
The network saw 48% YOY improvement in subscription revenue as per the first quarter results. What do you think were the driving factors?
The value is - we go as a single entity. The kind of proposition made and the value that is offered at, both make consumers make a choice. Perhaps, it is among the few networks which has all the genres covered. The price points are less than three a day.
It has been a while since NTO became active and consumers have moved to their preferred packs. What has been your observation of the trend?
It is early to comment on this because the information and transparency of the system have just started to trickle in. People are now getting used to it. Earlier, not many used to pay attention to this perhaps because there was a lot of cricket going on. When things stabilised, people started noticing what they are paying for. The settled state thus takes a certain amount of time. But these aren’t the most important decisions of your life. So you don’t dwell too much upon it. This time it became very important because TV channels were switched off. So they were forced to take those decisions.
One of the early indicators that have happened is, after conversing with a lot of platform owners, the second TV screen has got affected because people realised they have to pay double. Those questions were raised and certain platforms were given those opportunities to have separate packs. That also depends on the capability of the software with the DTH or cable operators on how much complexities they can have. By the end of next March, we will have a better visibility as we will complete a cycle.
The market share of Network18 channels have gone down due to the tariff order. Your take on that.
We had gone down to 9.3 per cent channel share. But as of last week, we have 11.5 per cent share. We are the number 1 in the country. That has predominantly been the story. But the dip that we saw, we have overcome it and now are higher than the previous number. So we did get affected because we are a pay network. The latter did get impacted due to NTO.
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