More than two-thirds of analog cable-TV homes in the four metros in India have been digitised. Going by the information and broadcasting ministry’s numbers, released last week, we are well on our way to 100 per cent digitisation by October 31 this year. That is the deadline for digitisation in the four main cities under an amendment to the Cable Act last year. The entire country should be digital by December 2014, says the law.
Can we now have a serious look at what complete digitisation of the world’s second-largest TV market could mean?
One, it means more pay revenues in the Rs 33,000-crore, 146-million TV home industry. As leakages of more than Rs 10,000 crore get plugged, expect broadcasters’ top-lines to improve.
Two, it means more bandwidth. For every analog channel you can shovel along 10 digital ones. More bandwidth means no shortages and, therefore, no carriage fees. This cuts 20 to 30 per cent from costs for broadcasters.
This double impact on both revenues and costs means better margins. With any luck broadcasters will spend that extra money on better programming.
And this brings me to the third impact, and the point of this column. It will mean far more segmentation of both channels and programming than you see currently. So far, because of the way viewership is measured and lack of digitisation, advertising revenues – and, therefore, eyeballs – were crucial. You had to have a show that posted crazy numbers on rating charts for advertisers to give it a second look. In the next two years, as pay revenue climbs from 10-15 per cent to 30-50 per cent of broadcasters’ top-lines, their dependence on advertising revenue will go down. Simultaneously, their ability to experiment with programming, to do all sorts of channels and shows, to segment the market and serve its heterogeneity much better, should go up.
You can see the beginnings of the segmentation. Almost every major network has a main general entertainment channel (GEC) and a second-rung one. So, Star has the successful Life OK, Sony has Sab TV and Zee has 9X. These are clearly meant for the middle-of-the-pyramid audience — the one that likes the TRP-busting shows like Mahadev on Life OK. The main ones such as Star Plus and Sony remain at the higher end of the mass market.
At the other end, the Discovery, Fox and Nat Geo clutch are expanding their range into what seem like micro-specialised genres. Discovery Turbo or Fox Traveller don’t seem to make sense in a world where Saathiya or Kaun Banega Crorepati are the big shows. They will make sense in a world where people are able and willing to pay for the true value of this programming. TAM Media Research data have shown again and again that people in high-end digital homes tend to spend more to buy English entertainment, English movies and other specialised niche genres. And almost every major network – Star, Sony and Zee – is busy building such a bouquet or aligning with one. For example, News Corporation owns Star and Fox, which operate as separate entity in India. And Sony is a distribution partner with Discovery.
Most broadcasters are also investing in shows that will eventually spawn channels of their own. For example, look at the number of food shows on air in India — over 200 at last count. They are the equivalent of reality shows for the top-end homes. And yet we have just one food channel. Wait, then, for a dozen food channels once digitisation happens.
Ditto for kids’ programming. It gets almost eight per cent of national viewing time, more than news on most days. But we haven’t seen a boom in the genre simply because it is expensive to put together a proper kids’ channel. Disney and Hungama (both owned by Walt Disney India), for instance, get a bulk of their viewership from dubbed versions of Doraemon, an old Japanese 2D series. It was, arguably, licensed at a lower cost than it would take to produce an original series out of India. If digitisation happens and pay revenues open up, kids’ programming is one of the first genres you will see action in.
But nobody seems to be discussing segmentation or a programming revolution for now. The Indian television industry is busy doing what it does best - arguing over the numbers released by the ministry.
