 "Sunil Lulla")
Sunil Lulla, managing director and chief executive officer, Times Television Network, which operates Times Now and ET Now, says the news sector is going through a tough phase and many channels may have to shut down. In an interview with Sahil Makkar, he says big entertainment broadcasters could be behind the Telecom Regulatory Authority of India's sudden plan to cap advertisement. Under the new rule, channels cannot run advertisements for more than 12 minutes in an hour. Edited excerpts:
You have said only five-six news channels will break even this year.
This is a statistically correct fact. The current intervention of Trai to regulate the (advertising) inventory has come at an inappropriate time. This business needs time. There is lot of inventory available but it is cheap inventory. The regulation will kill large number of news channels. If news is under threat, the society is under threat. It is important that news have economic independence.
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This rule to cap advertising was introduced long back. Didn't you have enough time?
Some one would like to explain why it was not done before and why they suddenly woke up one morning and decided it was the right time to implement it.
Does it mean people should not follow the law?
Then, it should be applied to everybody from 2006 onwards. Today, the pressure is coming from the big entertainment broadcasters. They want inventory balance, as it will benefit them the most due to increase in price. The reason why niche and news broadcasters want the matter deferred and be left to self regulation is this would hurt the news business. Nobody is saying don't do that. But do it at the appropriate time, when carriage fees are lower and more channels can partake in the subscription fee. The business model can be corrected.
When is the right time?
Allow digitisation to go through over the next two years. We don't understand why when the information and broadcasting ministry wants to allow the existing model for some more time, the regulator is going hammer and tongs.
Is the entertainment segment lobbying for such a cap on inventory?
Possible, I don't know. As a part of this industry, I think competitiveness and fighting for a market share is absolutely fair. But I think we should get above petty politics. If the big guys are feeling the pinch then I am sure so are the smaller guys.
Should parameters differ for news and entertainment broadcasters?
It is time we separate them both.
So, how are you going to handle this matter?
We are a strong brand. The economy in such a poor shape and I don't think many of the channels would like to have chopped inventories. The companies will have to take tough calls and many of us are prepared to do so. Some of the companies are downing shutters; many more will do in the next seven to eight months. If this continues, the situation will get worse.
Why don't you increase advertisement rates?
Will people pay? Advertisers are facing the same pressure with the dollar (strengthening against the rupee), (high) inflation, slow growth. They are not willing to pay.
There is a perception that companies exploit such opportunities to cut flab?
It is a very wrong notion. There is a negative economic environment. The digitisation was supposed to bring down the carriage fees. In three cities - Mumbai, Delhi, Kolkata - it came down 20 per cent but (that's) not very significant. No real growth (is) coming from subscription fees. If you want to have a situation, where many news channels wither away or weaken and die, which entrepreneur or media company would accept that. Look at the harm it would cause to the society.
When do you think the economy will pick up?
I don't think this is happening in the next 12 months. There is a gloom across the market.
