MxMIndia

Author: mxmadmin

  • The report has also said that with Hollywood already contributing 10-12 per cent of the overall box-office revenue in India, the Indian film industry will witness an accelerated growth

    Indian film trade to benefit from partnering Hollywood: E&Y

    By Nandini Raghavendra

     

    India’s film industry will benefit from an increased collaboration with Hollywood in the areas of film entertainment, education, VFX and tourism, according to Ernst & Young in a report issued for an initiative launched by the LA Film Council.

     

    The report, ‘Film Industry in India: New horizons’, has also said that with Hollywood already contributing Rs850 crore to Rs900 crore, or 10-12 per cent of the overall box-office revenue in India, the Indian film industry will witness an accelerated growth than competition from countries like China, Japan, Russia and Brazil.

     

    There has been 42 per cent increase in the number of Hollywood movies shot in India between 2010 and 2011, and that number is expected to grow, the report said. At least five big-ticket Hollywood productions, including the next James Bond, will be shot in India, while Fox is looking at two more films.

     

    The Indian film industry is projected to grow from $3.2 billion in 2010 to $5 billion by 2014 at a CAGR of 14.1 per cent. With close to a 1,000 films produced a year, India’s filmed entertainment industry is the largest in the world coupled with its theatrical admissions at around $3 billion.

     

    A greater collaboration between India and US will result in increased film tourism, cultural and technological exchanges and boosting local talent, and most importantly serve as a showcase on the global stage for India art, culture, history and talent. Perhaps, this is a beginning of a revolution similar to the one we witnessed in the IT industry at the beginning of this millennia,” Rakesh Jariwala, partner and segment champion, filmed entertainment at E&Y, said.

     

    According to estimates, there are more than 40 major domestic VFX companies catering to domestic and international clients. Currently, India accounts for only around 10 per cent of the total animation and VFX outsourcing pie. However, there is room for growth and the amount of work coming to India from Hollywood is on the rise.

     

    Of late, the VFX industry has been shifting toward higher-end assignments. India has well developed post-production facilities available at low cost. A foreign producer who comes to shoot in India can complete his entire movie here, from shooting to post production to cut costs. Industry players are also tying up with film and entertainment companies on dedicated projects.

     

    As far as India’s travel and tourism industry goes, it contributed $1.7 trillion (or 2.8 per cent of the global GDP), which is expected to rise to 4.2 per cent ($2.9 trillion) by 2021. Furthermore, investments in the global travel and tourism industry are expected to grow at a CAGR of 5.4 per cent to reach $1.5trillion by 2021 from $0.6 trillion in 2010.

     

    Many US states such as California, New York, Michigan, Nevada and Utah offer incentives to film and television production companies from India. Canada also offers incentives to producers of film, television, animation and visual effects from India and has attracted many Bollywood producers, who have shot movies in the country.

     

    Source: The Economic Times
    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • And it does so by innovating and staying relevant every 3-5 weeks, says Henri Holm, Senior VP at Rovio, creators of the game that's a huge rage globally

    Angry Birds forever!

    Angry Birds Space visual Courtesy Rovio.com

     

    Henri Holm is the Senior Vice President at Rovio Entertainment, the creators of Angry Birds. Holm, a Harvard alumnus, has extensive international management experience in consumer electronics, mobile internet, manufacturing, distribution, retail and brand management. At the sidelines of the recently concluded MTV Youth Marketing Forum 2012, MxMIndia’s Robin Thomas caught up with Henri Holm  who spoke at length about his India plans, India as a market for gaming and of course about Angry Birds and much more.

     

    You had said that it took Rovio Entertainment eight years to be where it is today. Tell us a little more about your company and your journey so far?

    Rovio Entertainment is a company which has grown very fast. We grew from a 12 people organization to over 300 plus professionals as of today. In our operations we cover mobile gaming, entertainments which include animations, books and publications, education content or edutainment, merchandising, licensing and sponsorships. In the entertainment space, we also cover advertising, so we are a major premium advertising channel provider. Globally, in fact, our ad impressions reach over 10 billion. It’s a company of young people who believe in their course, who neither give up nor give in.

     

    There are talks about the slow death of console gaming in India with the onslaught of mobile gaming especially with 3G and 4G coming in. Would you agree? Is the next phase of gaming coming from mobile?

    Console gaming is not necessarily as scalable as mobile gaming because I think it caters to a different set of audience or different media consumption or entertainment consumption. The mobile devices, including the tablets, are always with you and you can consume the game anytime anywhere, so the industry is certainly changing.

     

    Can you please throw some light on the entire thought process behind the Angry Birds concept? How did it come about?

    Everything started from the fact that the company has gone through 50 plus games. Being an audio manufacturer, we didn’t own a brand, we wanted to have our own IP and we wanted to build a brand. The thought process started with the characters and with distinctive personalities in those characters. The story was unique too, it was not a me-too story, and besides, the mechanics of the game itself was about simplicity, quality and paying a lot of attention to the details.

     

    You also said that Angry Birds will continue forever and that this is only just the beginning… How do you intend to stay relevant to the audience?

    Yes, we feel that this is just the beginning for us. Angry Birds as a brand, and as a story, will definitely continue. Every three to five weeks we try to keep the game relevant and innovative or new for our audience. However this does not mean that we will not be looking at other games or characters or stories, it’s just that we need to find the right time to introduce something new.

     

    Where is the Angry Birds audience coming from?

    Today’s audience primarily comes from the android and IOS platforms, however there are other very significant platforms besides the androids and IOS. So today we can cover all operating systems in mobile devices ranging from the smallest screens of the feature phones to the largest of the screen which are the tablets. So the mobile space is certainly growing the fastest. When you move away from the mobile to the web we cover the operating systems where Chrome has been leading the web experience supported by flash and now the social gaming like Angry Birds on Facebook. So each one of these platforms needs to be looked after individually and what is important is that we present the channel and the content where the fans are. So, if the fans are moving primarily into one operating system or one type of access into the content, we move with it.

     

    What is the role social networking sites have played for the success of games? According to a survey, young people in the west visit social networking sites only for friends and not necessarily brands…

    We are an entertainment company and we engage our fans on social media so, we are living social media 24×7 and we are participating in conversation all the time. Our business is about the fan engagement, delighting them and therefore I believe that social networking sites play a huge role in the success of any brand.

     

    What is the business model of Rovio Entertainment? Is it advertising led and how much has Angry Birds contributed to its revenue share?

    We have different business units, we have the games business unit, entertainment business unit and merchandising and licensing business unit. Each one of them contribute their own revenue but, they also complement the entire brand experience and the brand presence because of the huge opportunity to manage and monetize the brand. So our business model is purely based on the fan and the brand.

     

    How has 2012 welcomed you? What are your business plans this year? When you compare it with 2011 how has the growth been so far?

    In 2011 we launched one game and this year we have already launched two and have several more to go. The year 2011 was about building the infrastructure and the making the organization ready, 2012 on the other hand is about finding the right partnership and making the entire business ecosystem stronger and more global.

     

    So are you looking for more expansions and new partners?

    We are constantly looking for new partners and expansions as we need to build a very robust business and country plans before this.

     

    What is your view on India as a market for gaming and for your business?

    India is a very important market for us, as of now we are scouting for partners and once we find the right partnerships here it will give us better footprint and presence. We are looking for partnerships in the media space, in the digital distribution space, operators, and the major brands and all the big movers and shakers in the country.

     

  • The News Broadcasters Association (NBA) has expressed 'shock" and "dismay" at TRAI's Tariff Order.

    [60 Days to D-Day] NBA damns Order for ‘legitimizing’ carriage fees

    By A Correspondent

     

    News Broadcasters Association (NBA), the apex association of Indian news broadcasters, has expressed “shock” and “dismay” at TRAI’s Tariff Order.

     

    The Notification has legitimised the very practice the NBA had hoped would be ended, said secretary general Annie Joseph in a communiqué, referring to the payment of “steep” carriage fees by broadcasters: “The primary purpose of digitisation was to increase the number of channels broadcasted. The objective was to give consumers greater choice and to eliminate the phenomenon of ‘carriage fees’, which were being charged due to capacity constraints. However, the NBA is distressed and disappointed that TRAI’s new notification has actually legalised the practice of ‘carriage fees’ and given distributors the freedom to unilaterally set the amount of ‘carriage fees’ broadcasters must pay.”

     

    Ms Joseph added: “This unfairly penalises broadcasters and threatens the very survival of the broadcasting industry.” The NBA has urged the government and TRAI to take corrective action.

     

    A member of the cable trade pooh-poohed the NBA’s reaction as childish. “Let them set up their own distribution mechanism and see how much they will need to pay. If we bleed, they will cease to exist,” a senior industry person told MxMIndia, requesting anonymity.

     

    We are fine with rationalising carriage fees, but not eliminating them, the industryperson from the distribution sector added. “They should look at increasing ad rates to earn more,” he said, arguing that carriage fees are justified

     

  • We shall all have to brace ourselves to a large surge in operational logistics at the last minute, but yes all this is surmountable, says Neeraj Sanan, EVP- Marketing and Distribution, MCCS

    [60 Days to D-Day] All stakeholders need to work together: Neeraj Sanan

    The Telecom Regulatory Authority of India (TRAI) issued new rules refurbishing the regulatory structure of the broadcasting, cable and DTH industry ahead of the digitization switch over in four metros, Delhi, Mumbai, Kolkata and Chennai from July 1. The order deals with issues such as channel availability, channel pricing, carriage fee and revenue sharing.

     

    Digitization is being seen as the game changer for the Indian TV industry, expected to bring a sea change for viewers, broadcasters and cable operators. The broadcasting industry is expected to see a growth in subscription revenue post digitization, as opposed to the present model where they depend largely on advertising revenue.

     

    As per the new guidelines, ‘The Broadcaster would enjoy ‘must carry’ provision from 1.1.2013 or 1.4.2013 as the case may be, for Hindi, English and channels in the regional language of the concerned area.’  In the order, TRAI has also addressed the much debated issue of carriage fee. The order states, “Keeping in view the fact that substantial investment for implementation of Digital Addressable Cable TV Systems is made by the MSO and the cost involved in carriage of channels, the Authority has decided that every MSO may fix the Carriage Fee. However, it should be published in the Reference Interconnect Offer and applied in a uniform, non-discriminatory and transparent manner. The Carriage Fee cannot be revised upward for a minimum of 2 years. The Authority would intervene in case it is felt that the Carriage Fee is unreasonable.”

     

    The regulatory has also prescribed the MSOs to increase their channel carrying capacity, stating that every MSO should have a minimum capacity to carry 200 channels by July 1, 2012.

     

    MxMIndia’s Shruti Pushkarna spoke to Mr Neeraj Sanan, EVP- Marketing and Distribution, MCCS to get his response on the Tariff Order and Interconnection Regulations for the Digital Addressable Cable TV Systems issued by TRAI.

     

    What’s your first response to the Tariff Order? Specifically the MCCS position?

    It is a reaffirmation of the government’s stated position and something that TRAI has been working towards for a long time.

     

    The TRAI observes that the Order will help profitability of channels. But carriage fee exists. Do you think your bottomline will be impacted in a positive way with this?

    The TRAI’s order will help all stakeholders move to a position of working in a structured manner. A well-run business can hope to get its deserved profit.

     

    Do you see the implementation happening in the four metros before July 1?

    I understand that a lot of intelligent people in well-run MSO and LCO organizations are working round the clock to make it happen. A key factor here will be for the government to continue to do what it has been saying. We shall all have to brace ourselves to a large surge in operational logistics at the last minute, but yes all this is surmountable.

     

    What are the marketing initiatives you are undertaking to ensure that you retain viewers?

    This is a challenge more for a distributor.

     

    Do you think the government is doing enough to promote the switch to digitization and explain the benefits to consumers?

    There is always something better we could do, but yes, government has been consistent in it’s thought. Now it is for all stakeholders, including all state governments to realize the prudence of digitization and work together to make it happen.

     

    Are there any areas of worry in the run-up to digitization (given that we have just 60 days to go)?

    No constructive business happens without risk and yes there are a lot of things that could go awry but if all players remain aligned, this is achievable. We should all realize that it is history being written everyday for distribution and we need to carefully tread this path.

     

  • MxMIndiaspoke to Sahil Gupta, Senior Manager, Tax and Regulatory Services, PwCIndiato get his reading of the tariff order for cable TV issued by TRAI.

    [60 Days to D-Day] Digitization good for industry: Sahil Gupta, PWC

    The Telecom Regulatory Authority of India (TRAI) issued the Tariff Order and Interconnection Regulations for the Digital Addressable Cable TV Systems on April 30.

     

    Aimed at providing the viewers with a better viewing experience and maximum choice, digitization is being seen as the biggest change broadcast and cable industry in the country is set to witness. Television viewers will get to choose a minimum of hundred Free to Air (FTA) channels at a maximum retail price of Rs100, as per new tariff rules for Cable TV announced by TRAI.

     

    The order states: “The basic purpose of digitization is to ensure ample choice to the consumer as well as to enable him to budget his subscription according to his paying capacity. Accordingly, the Authority has mandated MSOs to carry a minimum of 500 channels from January 1, 2013. However, keeping in view that the smaller MSOs having less than 25000 subscribers may need some additional time for building the capacity, they have been given time up to April 1, 2013. Besides, to ensure that the consumer is not adversely affected, the Authority has prescribed that every MSO should have a minimum capacity to carry 200 channels from July 1.”

     

    In the new guidelines issues, TRAI has also addressed issues pertaining to revenue sharing between MSOs and LCOs, carriage fee paid by broadcasters, channel pricing and so on.

     

    Mr Sahil Gupta, Senior Manager, Tax and Regulatory Services, PwCIndia shared his analysis of the recent order with MxMIndia’s Shruti Pushkarna and how he sees digitization as a win-win for all.

     

    What is your view on TRAI’s Tariff Order? 

    It’s a pro-consumer directive. Consumers can now pay for what they want to see, unlike in today’s time when they purchase a bouquet which has unwanted channels as well. Hence a la carte selection works more cost-efficient for consumers.

     

    So do you see digitization as a win-win for all?

    Digitization per se is good for the industry – consumers get better quality reception, broadcasters can know their exact consumer base, which will help them realise full value from MSOscable operators (which gets under-reported in current times based on what subscription base the intermediaries disclose to broadcasters). Moreover, it helps in bringing addressability in the system.

     

    Do you think the government is serious about the July 1 deadline?

    The government is taking a lot of initiatives to push digitization – it has a stakeholders’ meeting every week or two weeks and is helping stakeholders migrate to the new system. They are thus doing their bit for helping meet the deadline of July 1.

     

    But on the ground we hear that there is much to be achieved?

    The infrastructure is what is taking time. The digital/upgraded set top boxes need to be procured and be ready for installation at the consumer’s end. Some MSOs/cable operators are looking at funding mechanisms for meeting these procurement needs, while others are working towards building a right procurement strategy for the same. All in all, the industry is gearing up for it and all stakeholders doing their bit.

     

    Your view on the guidelines for carriage fees in the Order?

    Carriage fee is what MSOs charge broadcasters for carrying their channels to viewers. Some element of arbitrariness gets reduced from this Order as it needs to be uniform and non-discriminatory across all broadcasters. The TRAI will step in if it’s unreasonable and this will help.

     

    And on pricing of channels?

    The limits on pricing mentioned in the order is aimed mainly at ensuring that channels, especially popular ones, are not priced high.

     

    There’s also a mention on the revenue sharing between MSOs and cable operators…

    There seems to have been certain disputes between MSOs and cable operators in regard to sharing of distribution revenues. Prescribing the revenue sharing formula, in absence of an agreement between them, will help and bring in transparency…

     

     

  • We will need a postponement of at least three to four months. The tariff order has just come; there are so many other issues such as DAS licenses being not issued till date, says JS Kohli, CEO of Digicable

    [60 Days to D-Day] Digitization in 4 metros will not happen by July 1: JS Kohli

    Late Monday night, Telecom Regulatory Authority of India (TRAI) announced the new tariff structure for digital cable TV services. Under the new rules, all cable operators will have to mandatorily offer a Basic Service Tier (BST) to viewers which would consist of 100 free to air channels, including 18 mandatory Doordarshan channels, as well as the Lok Sabha channel. The tariff order states that apart from the mandatory channels in the BST, cable operators and Multi System Operators (MSOs) will have to provide customers a minimum of five channels of different genres.

     

    The authority also stated that MSOs will have to increase their channel carrying capacity. TRAI stated: “The Authority has mandated MSOs to carry a minimum of 500 channels from January 1, 2013. However, keeping in view that smaller MSOs having less than 25,000 subscribers may need some additional time for building capacity, they have been given time up to April 1, 2013.” The TRAI has prescribed that every MSO should have a minimum capacity to carry 200 channels by July 1.

     

    TRAI has also established new guidelines for revenue sharing between Multi System Operators (MSOs) and Local Cable Operators (LCOs).

     

    MxMIndia’s Shruti Pushkarna spoke to Mr Jagjit Singh Kohli, a veteran of the cable industry and CEO of cable distribution firm Digicable, on his reading of the latest order issued by TRAI and if he thinks the sunset date of June 30 is still achievable.

     

    What’s your first response to the Tariff Order?

    Well, the order is on expected lines, no big surprises there. Given the circumstances, I am happy with it, in the sense that we know the regulatory has been operating under tremendous pressure from various stakeholders, so given that situation, I am actually happy with the order.

     

    TRAI has observed that the Order will help profitability of channels. But carriage fee exists. Do you think the bottom line will be impacted for both broadcasters and the cable trade?

    The channel capacity is increasing to 500 channels, so automatically the pressure on carriage will reduce. So, although the carriage fee remains but the channel capacity itself is increasing so much that the price per channel will come down.

     

    Given the status as of today, do you see the implementation happening in the four metros before July 1?

    Now, that I don’t think will happen. We will need a postponement of at least three to four months. The tariff order has just come; there are so many other issues such as DAS licenses being not issued till date. To meet the deadline the industry needs to deploy atleast 150,000 boxes every day, only then will we be able to meet that deadline, and that’s impossible.

     

    What about the availability of set-top boxes?

    Even that is an issue. But even if set top boxes were to be made available, it would be very difficult to meet the deadline.

     

    Do you think the government is doing enough to promote the switch to digitization and explain the benefits to consumers?

    Yes, you can’t blame them on this. They have been quite aggressive on the timelines and in their campaigns.

     

    Are there any areas of worry in the run-up to digitization (given that we have just 60 days to go)?

    The only area of worry is that we will need some more time to meet the deadline, otherwise everything is fine.

     

    Photograph: Fotocorp

     

  • The genuine fear is that the BARC initiative will again slow down or worse – get delayed due to lack of clarity or infighting amongst the associations/players

    By Invitation | Atul Phadnis: Will TV measurement in India finally get its logical direction?

    By Atul Phadnis

     

    In March this year, three industry associations that have a significant say in television broadcast and TV advertising jointly announced a new chapter in the TV Ratings Measurement initiative. Broadcast audience Research Council (BARC) is the joint venture that has been in discussion, for the longest time, between the three stakeholder associations – Indian Broadcasting Foundation (IBF), Indian Society of advertisers (ISA) and the advertising agencies association of India (AAAI) to measure nationwide TV audience viewership. BARC has taken birth where a lot of earlier industry initiatives have failed to take off – hence, a lot of folks (including me) are watching these events very closely and curiously.

     

    Yes. There are cynics who doubt whether the BARC initiative will be able to streamline the industry ambitions for a wider and robust TV audience measurement thereby recasting/enhancing the offerings of the current ratings provider – TAM Media Research (a joint venture between Nielsen and Kantar-WPP).

     

    The genuine fear is that the industry initiative will again slow down or worse – get delayed due to lack of clarity or infighting amongst the associations/players. It’s a legitimate concern based on what we have seen in the past. In fact, the recent announcement has been possible only when a formula for compromise was reached after months of stalemate on the BARC shareholding and composition of its board.

     

    The genesis of the industry initiative that has now taken birth as BARC has in its vision the Rs329 billion TV industry that to a large extent depends on ratings and viewership information for key decisions, growth and business. So what are the key expectations of the industry that should get addressed if BARC is the answer to the TV industry’s call on TV Ratings?

     

    1. The Burden of Transparency

    For years now, TAM has been criticized, publicly and privately, for alleged opaque policies relating to aspects such as third-party audits, pricing, technology R&D results and panel performance KPIs. as is the case with any competitive industry bustling with cut-throat competition, rumor mills and conflicting agendas of different players, the transparency burden had been conveniently dumped on TAM. after all, we do see from time-to-time the so-called ‘open letters’ that certain channels would send out to TAM asking for explanations on why their blockbuster programs did not do well in terms of TRPs. Irrespective of where the answers for failure lie, these occasions, nonetheless, cast all sorts of aspersions on the trading currency and are hardly constructive. I haven’t seen a single such instance over the last decade produce any positive reaction – either in providing more answers on causality nor a bettering of the ratings system. and these instances surely can’t be healthy for the industry that has dependencies on advertising that in turn needs TV measurement.

     

    It’s high time the industry associations, perhaps via BARC, put their necks on the block and take frontal onus and responsibilities on transparency elements that will boost confidence on TV Ratings. Not only will this sharing of burden save the industry the blushes in front of the advertisers, it will also have a correctional effect with the routine debates being laid to rest. Hopefully, BARC is able to bring in transparency by defining deliverables and quality parameters clearly to the Ratings vendor(s) in the new scheme of things.

     

    2. Evolving data reporting policies

    Transparency in KPIs will also have an effect on how TV ratings data should be reported in our industry. There are a host of mature markets, in particular theUK, that have a threshold viewership criteria for TV program ratings to meet; if those numbers have to be reported in the weekly data. This ensures that viewership estimates for very small channels and very niche programs inside very small market groups are not reported. However, in our market, if the 700th channel gets launched tomorrow, TV ratings for that channel for very small markets and microscopic audience definitions will be available. Lack of industry understanding and consensus has stopped from any policy to take shape and solidify in this specific issue. This, in turn, has led to a sad saga of inexplicable rating fluctuations for specialist channel genres in small markets/ audiences. With the BARC coming in, certain wise old men (and women) can roll out this policy of releasing viewership numbers of only those channels and programs that are in the permissible and acceptable error level range.

     

    3. Structural changes in panel construction

    The methodology for TV Ratings in India- especially the way panel homes are selected from a neighborhood has remained largely the same. The criteria is defined through Primary Control Variables, a system to carve out quotas of what sort of homes should be selected to enter the panel. However, the dramatic changes that have occurred in the last 5 years – that of DTH now forming a large part of the TV universe – requires the Primary Control Variables to reflect an acceptance of that new reality. Earlier, say 8-10 years ago, cable monopolies in a neighborhood within an area, city or town ensured homogeneity of received signals in spite of the heterogeneity of viewing. That signal homogeneity within the neighborhoods would ensure that thousands of homes within that area would receive the same input from their cablewallah into their TV sets. Today that cable structure lies shattered wherein one single neighborhood would have the cablewallah’s analogue signal in certain homes, his digital (CAS) box in certain households as well as scores of homes with DTH connections from 7 DTH providers.

     

    Now layer this information on the specific channels or channel packs subscribed by DTH or Digital Cable viewers – and you have a distribution complexity that snarls into existence, dramatically affecting TV viewership. This distribution factor needs to be well modeled inside the Primary Control Variables to construct the panel. It is not there at the moment and neither has there been an active industry debate on how to bring newer factors such as these into the panel construction/ panel design exercise.

     

    4. Critical Measurement/ Panel Decisions (including R&D, Technology)

    Consumer patterns of TV consumption are dramatically changing with the advent of set-top-boxes, recorders, mobile TV, and so on. Viewing is also happening when people are on the move rather than only in-home TV viewing. In India, ratings are reported only for in-home TV viewing. TV consumption on mobiles, tablets, IPTV, computers or outside-of-home is unmeasured. If these new patterns need to be measured, a significant emphasis would be needed on R&D. This R&D and Trial Panels have to be budgeted by a vibrant industry determined to capture every viewing instance so as to analyse and eventually monetize those audiences. It would be a disappointment and a terrible waste if BARC did not have this early in its agenda.

     

    5. TV Measurement Vision

    It might seem unbelievable but it is true – the largest customers and users of TV ratings info today do not have a common goal or vision for the future of TV measurement in our market. Issues such as Rural versus Urban, increase coverage vis-a-vis better representation, upscale versus mass-market – would find distinctly different views within the industry. In the absence of a common vision, the strategy to expand, enhance, improve the measurement system is clearly not going to be very effective. With a forum like BARC, the attempt should be to collectively define the vision as well as the timelines and path to attaining that goal by mobilizing opinion and the industry war-chest. This is, perhaps, the most crucial aspect of the success or failure of BARC, the failure of which would risk reducing this initiative into a rudderless and spineless wonder.

     

    6. CPM versus CPRP

    In the last few years, broadcasters have tried, albeit unsuccessfully, to correct a long standing trading currency aberration in our industry. While the world uses CPMs (Cost per thousand ad impressions) to price benchmark TV ad inventory, our market has erroneously got locked into CPRPs (Cost Per Rating Points) – thanks to the myopic vision of media agency AORs of the 90s. While the entire industry (including media agency heads who publicly oppose change but privately admit its fairness) wants transition to the correct trading currency, the longstanding question has been who will do it first on both ends – advertisers and channels. Perhaps with BARC, the opportunity is in planning that roll-out as a coordinated industry action.

     

    7. Redressal Forum

    One of the biggest opportunities for BARC is to streamline the custom arguments, debates and requirements that individual players have on TV ratings into an ever evolving bucket of policies. In the current scheme of things, individual players have their differences with the TV ratings company, but not really have an escalation route to get their views heard. These issues range from pricing (dis)parity to use of raw data to choice of ratings software to conflicting TAM’s policy of not selling their data to certain client categories. Perhaps the most common arguments relate to unexplained fluctuations and peaks-troughs in the ratings data.

     

    BARC would be better served to pursue an approach built on open, transparent debates and a clever commercial policy in such instances that might see lesser open issues but greater revenues into the industry kitty.

     

    Summing up…

    The above piece is my attempt to get a constructive dialogue out in the open on a matter that deeply concerns TV Media professionals cutting across organizational lines. I personally have tremendous respect for professionals in this stream including those within the TAM Executive team as well as the industry folks driving the BARC initiative. It is my sincere hope that a constructive dialogue followed by clear and rapid forward actions by stakeholders leads to the World’s finest and biggest TV measurement initiative! amen…

     

    Atul Phadnis is Chief Executive, WHAT’S-ON-INDIA

     

  • Ensuring a "must carry" clause for all TV channels and putting an end to their regulatory pricing wherein TRAI mandates the price that viewers pay for every channel, are also critical to revive the sick TV broadcasting industry

    Govt can plug revenue leakage by banning carriage fees, says broadcasting industry

    By A Correspondent

     

    Industry sources have said that banning carriage fees in the new digitisation of cable distribution regime w.e.f July 1 is necessary to ensure that government can plug the huge revenue leakage upwards of Rs10,000 crore annually due to cable companies levying huge carriage fees and grossly under-declaring their subscriber base.

     

    Moreover, ensuring a “must carry” clause for all TV channels and putting an end to their regulatory pricing wherein TRAI mandates the price that viewers pay for every channel, are also critical to revive the sick TV broadcasting industry, which continues to reel under the triple burden of usurious carriage fees, regulated tariffs for their channels as well as getting a fraction of their due subscriber revenues.

     

    At present, over nine-tenths of TV channels are in the red and are unable to invest in quality programming, while many smaller/niche channels with big-ticket pedigrees – Imagine TV being the latest – have had to shut down.

     

    Another fallout of these distorted industry practices has been that potential new export avenues have closed, because India is not able to export television formats and finished content – while other industries like software, music and animation (which do not suffer such a usurious regulatory/industry scenario) have been big-ticket forex earners for over a decade.

     

    Industry sources said that TV channels collectively paid at least Rs3,500 crore last fiscal to cable companies and distributors as carriage and placement fees, of which news channels alone paid at least Rs1,500 crore. These carriage fees turned many profitable TV channels immediately into the red, thus denying the government a large income tax earning opportunity upwards of Rs1,000 crore per year.

     

    According to another industry estimate, given the estimated subscription revenues of all MSOs/LCOs in the country, the government has lost about Rs5,950 crore over the five-year period from 2006 to 2011 in service tax alone by reason of under-declaration while the evasion of income tax is about Rs17,413 crore over the five-year period 2006 to 2011; and loss of entertainment tax by states is in addition to that amount.

     

    Additionally, TRAI had, itself mentioned in a March 2010 paper that “there is evidence of tax evasion in the cable industry…the last publicly available CBEC report of 2005-06 shows only Rs75 crore of service tax being collected from the industry on a base of 68 million subscribers paying an average of Rs165 per month, the estimated service tax collection from analog cable should be in the range of Rs1,400 crore per annum”.

     

    Another estimate – from HSBC for 2011 – says that the government lost around Rs1,380 crore last year in entertainment and service taxes alone due to cable companies under-declaring their subscriber base by as much as four-fifths. This estimate assumed the potential revenue to government at Rs1,725.90 crore given a Rs165 ARPU for 67 million analog pay TV households and entertainment tax at Rs20 per household along with 12 per cent service tax.

     

    But because only 20 per cent or 13 million households are disclosed, the actual revenues collated were estimated to be only Rs 345 crore even as TV channels lost out on the bulk of their subscriber fees. These practices have ensured that India now has a cash-rich last mile; India already has the third-largest TV distribution industry in the world where viewers can and are willing to pay for content – borne out by the fact that pay TV penetration is as much as 80 per cent in India, which is amongst the highest in the world.

     

    On the contrary, TV channels, who actually create the content, get less than a fifth of what viewers actually pay the cable companies. However, broadcasters say that the only opportunity to correct these distortions and ensure that TV channels do not continue to close due to extraneous factors, lies in the digitisation of cable distribution, for which the government is currently putting together relevant rules.

     

    Under this, it will be mandatory for all viewers to get a digital set-top box and for operators to distribute channels in a digital and addressable format. This will give viewers a wider choice of channels with better viewing quality. In fact, digitisation is now being seen as the game changer for the entire Indian TV industry as it will also significantly benefit distributors the multisystem operators – (MSOs) and local cable operators (LCOs) – whose paying base will improve even further.

     

    In this regard, Dr Prannoy Roy, chairman, NDTV told ET, that “digitisation of cable distribution is a major step towards making India’s media achieve truly global quality”. However, Rajat Sharma, chairman, India TV, pointed out that digitisation will be “meaningless unless all channels are made available to the consumer and he is given the power to make a choice”.

     

    He told ET that this can be done “only if it is mandatory for the cable operators to carry all channels and ensure that set-top boxes have the capability to carry more than 500 channels” and added that the government must curb any effort to create an artificial scarcity at the head end or in the box in carrying the channels.

     

    Pointing to the other issue of price controls on TV channels, Uday Shankar, president, Indian Broadcasting Federation, told ET: “IBF has always believed that channel pricing should be kept under regulatory forbearance and market forces should be allowed to discover channel valuations. Internationally, apart from countries like China or Taiwan, there are no instances of government regulating the pricing of channels. Freedom in pricing is essential for channels to offer best in class, quality programming. In the absence of this freedom, broadcasters are compelled to somehow match spiraling input costs with regulated prices thereby running the risk of compromising quality”.

     

    He added that there is enough competition in every genre to “remove any fears of exorbitant pricing”, given that the consumer has a choice between multiple DTH platforms and cable operators and “as a result of that, we have seen that the ARPUs have been flat to down”.

     

    Source: The Economic Times
    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • The much awaited TRAI order on tariffs is out paving the way for the digitisation regime in metros starting July 1

    TRAI issues tariff order for cable TV

    By A Correspondent

     

    The Telecom Regulatory Authority of India issued the Tariff Order and Interconnection Regulations for the Digital Addressable Cable TV Systems late yesterday.

     

    While the Tariff Order has been issued as an amendment to the existing Tariff Order for addressable systems, the Interconnection Regulation is comprehensive one for the Digital Addressable Cable TV Systems.

     

    As per the communiqué, here are the salient features:

     

    1. All channels (pay and free-to air) to be offered on a-la-carte basis to subscribers.

     

    2. There will be a Basic Service Tier (BST) consisting of a minimum of 100 free-to air (FTA) channels comprising at least 5 channels of each genre namely news and current affairs, infotainment, sports, kids, music, lifestyle, movies and general entertainment in Hindi, English and regional language of the concerned region. 18 channels of Public Broadcaster and Lok Sabha channel will also form the part of the BST. While Multi-system Operator (MSO) has to offer the Basic Service Tier, it is not obligatory for subscriber to subscribe to the BST. Instead subscriber can form his own package of a maximum of 100 FTA channels.

    In either case the MSO cannot charge the subscriber more than Rs100 per month.

     

    3. It shall be open to the subscriber to subscribe to the BST or one or more FTA channels or one or more Pay channels or bouquets offered by MSO or any combination of these.

     

    4. In case subscriber chooses Pay channel(s) with or without FTA channel(s) the MSO can fix a minimum monthly subscription not exceeding Rs150. If the total value of the channels/ bouquets opted by the subscriber exceeds Rs150 then actual subscription charges has to be paid.

     

    5. The basic purpose of digitisation is to ensure ample choice to the consumer as well as to enable him to budget his subscription according to his paying capacity. Accordingly, the Authority has mandated MSOs to carry a minimum of 500 channels from 1.1.2013. However, keeping in view that the smaller MSOs having less than 25000 subscribers may need some additional time for building the capacity, they have been given time up to 1.4.2013. Besides, to ensure that the consumer is not adversely affected, the Authority has prescribed that every MSO should have a minimum capacity to carry 200 channels from July 1, 2012. Authority expects that all the MSOs operating in areas of Phase-II onwards to take suitable measures to enhance the channel carrying capacity to 500 channels.

     

    6. Only those MSOs that have the requisite capacity, as mentioned above, can invoke ‘must provide’ clause. The broadcasters shall not provide their channels to MSOs who have channel carrying capacity of less than 200 channels immediately and less than 500 channels from 1.1.2013 or 1.4.2013 in case of smaller MSOs.

     

    7. The Broadcaster would enjoy ‘must carry’ provision from 1.1.2013 or 1.4.2013 as the case may be, for Hindi, English and channels in the regional language of the concerned area.

     

    8. The provision relating to amount charged by broadcaster to MSO remains unchanged. They can charge a maximum of 42 per cent of the rate, they charge in the non-addressable systems.

     

    9. The Authority has addressed the issue relating to the Carriage Fee. Keeping in view the fact that substantial investment for implementation of Digital Addressable Cable TV Systems is made by the MSO and the cost involved in carriage of channels, the Authority has decided that every MSO may fix the Carriage Fee. However, it should be published in the Reference Interconnect Offer and applied in a uniform, non-discriminatory and transparent manner. The Carriage Fee cannot be revised upward for a minimum of 2 years. The Authority would intervene in case it is felt that the Carriage Fee is unreasonable.

     

    10. The MSOs can fix the retail tariff and also package and price offerings. However, the sum of the a-la-carte rates of channels, forming part of a bouquet, shall not exceed 1.5 times the rate of the bouquet. Further, the a-la-carte rate of any channel shall not exceed 3 times the average channel rate of the bouquet.

     

    11. The July 2010 Tariff Order provides that the revenue share between the MSO and LCO shall be based on mutual negotiations. The Authority has now prescribed that in case the mutual negotiations fail, the revenue share shall be in the ratio of 55:45 (MSO: LCO) for BST or FTA channels. The revenue share for Pay channels or bouquet of Pay channels with or without FTA channels shall be in the ratio of 65:35 (MSO: LCO).

     

    12. Implementation of Digital Addressable Cable TV Systems will lead to better choice to consumers, variety and quality of content, adequate revenue to stakeholders and healthy environment for the industry in addition to bringing in transparency in the business transactions and subscriber base. It would also ensure that the Government receives the due revenue.

     

    Details of the Interconnection Regulations and Tariff Order are available on TRAI website: www.trai.gov.in.

     

  • Cartoon cannot be promoting somebody, cartoon is always attacking somebody, says Hemant Morparia

    The Anchor: Hemant Morparia on 5 reasons why cartoons can be more lethal than text

    By Hemant Morparia

     

    1. Cartoons are about satire

    Now satire is something that all people in power fear, because the last thing they want is ridicule. So when they face ridicule from ‘janata’ which they are trying to rule over, that is the last thing they would want. For them to appear ridiculous to a reader is a deadly blow.

     

    2. Cartoon is about making somebody laugh

    Why does that person laugh… because he recognizes that there is some truth in that. So there is some truth being outed, a cartoon cannot be bought. You can have a paid media, there could be a planted story but a cartoon cannot be a plant. Cartoon cannot be promoting somebody, cartoon is always attacking somebody.

     

    3. There is an agreement

    There is an agreement between the cartoonist and the reader on the kind of implicit sense of truth. Reader seems to understand that the cartoonist is trying to say something which is true and correct.

     

    4. Cartoon is also something that cannot be edited

    You can edit a text piece but you can’t partially edit a cartoon. Whereas if it’s an article which has a lot of data, different points of views, and so on, that could still be a plant or not telling you some relevant things.

     

    5. Cartoon is an honest voice

    And the reader also knows it. Cartoon is far from being bought.

     

    Hemant Morparia is a well-known cartoonist. Other than a daily pocket for Mumbai Mirror, he toons for various Indian and international publications

     

  • With the overall economy looking weak, customers are tightening their purse strings amid low increments

    Big retailers offer discounts as growth slows

    By Dipti Jain

     

    Just like an unusual April in Delhi when temperatures remained below 40 degress, retailers are dishing out discounts and special offers to attract buyers in early summer. From Future Group’s Big Bazaar to Lifestyle and Marks & Spencer, almost all retailers are courting buyers through special offers as growth remained muted in March and April. With the overall economy looking weak, customers are tightening their purse strings amid low increments.

     

    Big Bazaar just concluded its first-ever public holiday sales, while Marks & Spencer is offering 30 per cent discount to liquidate stocks. Ditto for FMCG major Godrej that has announced offers for its furniture brand. Woodland says it has intensified its promotional activities, Lifestyle Retail is offering discounts and freebies and Shoppers Stop is offering higher rewards.

     

    Although retailers are choosing not to talk at the moment, numbers point to slower offtake. For instance, Shoppers Stop, which reported an 87 per cent decline in fourth quarter net profit, has seen a 3 per cent rise in transaction size, despite the average selling price going up 9 per cent. Even conversion rate is down 5 per cent despite footfalls rising 29 per cent during the fourth quarter.

     

    Spencer’s Retail says its same store sales growth has moderated from 12-13 per cent during 2011 to around 8 per cent during January-March 2012. Same store sales is a measure used to gauge how sales have been in stores that were operational in the previous year.

     

    While brands are aiming to revive buying sentiments, for some the offers are intended to make up for the backlog from the last season. A store manager at a Pantaloon Retail outlet in Delhi said while it had increased prices by 12 per cent last year, in some cases the company has been forced to slash prices by around 20 per cent to boost sales.

     

    “Buyers are waiting for the sale period to make purchases as things have become more expensive. We have to offer some incentives to retain customers even though our profit margins have reduced,” said the Pantaloon store manager.

     

    “It has become more challenging for a retailer to keep his customers engaged. Buyers are now more demanding and are always looking for offers and discounts,” said Harkirat Singh, MD, Woodland.

     

    Godrej Interio associate VP Subodh Mehta said offers tend to get customers to purchase. With sales growth around 25 per cent, compared to the 30 per cent target, the company is not just offering discounts of up to 20 per cent on furniture but is jacking up ad spend by close to 20 per cent. Godrejs’ same store sales grew 15 per cent (3 per cent below target).

     

    “Buying sentiments will remain choppy due to the uncertain economic scenario. Customers need to get back disposable income to start spending again,” said Ankur Bisen, associate director (retail) at Technopak.

     

    Source: The Economic Times

    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • The TRAI chairman has said in a television interview that the TRAI will not relook at the recommendations on carriage fee

    No comebacks on Tariff Order: TRAI chairman

    By A Correspondent

     

    While the News Broadcasters Association has protested against the tariff order for digital cable TV issued by TRAI on April 30, saying that the order ‘legalized’ carriage fee, TRAI Chairman JS Sarma has maintained that there is no cause for dissatisfaction on carriage fee.

     

    In an interview to NDTV 24×7, Mr Sarma said: “Carriage fee is now a well-regulated issue and it should be transparent. We will intervene if required but we won’t relook at the recommendations.”

     

    The NBA claims, “The primary purpose of digitization was to increase the number of channels broadcasted. The objective was to give consumers greater choice and to eliminate the phenomenon of ‘carriage fees’, which were being charged due to capacity constraints. However, the NBA is distressed and disappointed that TRAI’s new notification has actually legalized the practice of ‘carriage fees’ and given distributors the freedom to unilaterally set the amount of ‘carriage fees’ broadcasters must pay.”

     

    The TRAI has also prescribed that the MSOs increase their channel carrying capacity. In its recommendation, MSOs have been mandated to carry a minimum of 500 channels by January 1, 2013. TRAI stated in its order, “The Authority has mandated MSOs to carry a minimum of 500 channels from January 1, 2013. However, keeping in view that smaller MSOs having less than 25,000 subscribers may need some additional time for building capacity, they have been given time up to April 1, 2013.”

     

    The TRAI has prescribed that every MSO should have a minimum capacity to carry 200 channels by July 1.

     

    The Indian Broadcasting Foundation (IBF) convened a board meeting to discuss the issues pertaining to the TRAI order. A press statement is scheduled to be released on the issue later today.