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Digitalisation rollout in India by 2013: TRAI Chairman J S Sarma

31-July-2010
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Digitalisation rollout in India by 2013: TRAI Chairman J S Sarma

Telecom Regulatory Authority of India (TRAI) Chairman JS Sarma has announced complete switchover from analog to digital broadcast signals in the country in a phased manner by December 2013. Addressing industry leaders at the CII organised conference on Managing Digital Media and Entertainment Business in the Digital Era (in Mumbai via video conferencing), Sarma called for support from industry in one voice for the digital switchover. “We are forward looking and proactive on regulation on digitalisation,” he affirmed.

The broadcast industry leaders welcomed the recommendation by TRAI as they were expecting digital switch over by 2017. TRAI’s final consultation paper on digitalisation would be released next week, Sarma added.

Emphasising that human capital would ride technology, Amit Khanna, Chairman, CII National Committee on Media & Entertainment and Chairman, Reliance Big Entertainment, maintained that media companies have to transform from products to relationship with audience in the future. He said that there was extreme polarisation and predicted more event based (FIFA World Cup, ‘Avatar’, ‘3 Idiots’) things in the emerging digital world. “We are moving away from economy of attention to economy of in attention and there is too much distractions,” he added.

Ronnie Screwvala, Co-Chair, National Committee on Media & Entertainment and Chairman & CEO, UTV Software Communications, commented that with the spurt in the number of DTH households in India, the overall industry had witnessed a remarkable growth in the country. The industry has witnessed tremendous growth on the DTH front and India will emerge as the world’s largest DTH subscribed nation when it surpasses (32 million US DTH subscribers) in the next 12 months. India has a DTH subscriber base of around 25 million in just four years.

Sam Balsara, Chairman & MD, Madison World cited that Digitisation and Advertising had a direct link to a considerable extent. He said, “Digitalisation holds the key to the rate at which advertising will grow. Earlier, for the media the revenue model was 50:50, that is, 50 per cent revenue from readers and 50 per cent from advertisements. However, today the ratio is 80:20, that is, 80 per cent revenue from advertisements and 20 per cent revenue from the readers. This equation has tremendous debilitating effect as an increased load on advertising will reduce the rate of returns for the advertisers. The economic returns to Indian advertisers are not as high as compared to other countries due to the 80:20 ratio. Digitalisation will help balance the ratio, efficiency and effectiveness and improve returns for advertisers.”

Speaking of digitalisation of Pay TV, Vikram Kausik, CEO, Tata Sky, said, “Digitalisation today is inevitable and the scale and potential of the volume of this business in India is huge. However, the players in this sector with a focus on achieving this volume are adopting disastrous margin cuts, which are leading to very low average revenue returns for the industry.” He further said, “The major challenge of digitalising is the fragmented economy, due to which the industry is losing large amounts of money. It is critical for proper implementation of digitalisation it has to be mandated.”

Throwing light on the business model for the social gaming industry, Vishal Gondal, Founder & CEO, UTV Indiagames, said, “In the social gaming industry, business models are changing every day and content is becoming the game changer. Today, users want everything free, thus in this industry Freemium is the New Premium! Revenue generation in this scenario is challenging, however the industry has also monetised on this challenge. Although 85 per cent are free users of the social gaming industry, they act as viral/ marketing agents and popularise the platform and these users can be enticed to various advertisements and offerings. Twelve per cent users engage in micro transactions and 3 per cent are premium subscribers. Thus ensuring that the industry earn revenue from users as well as from advertisers.”

Similar to CII’s series on Reel World and the Law, CII will continue its initiative in managing media and entertainment business in the digital era space. This is first of CII’s digital media series and will continue to bring IT and entertainment companies to deliberate on evolving best practices.

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