MxMIndia

Tag: broadcasters

  • With digitization benefits yet to solidify, how will the ad duration restriction affect broadcasters?

    Ad cap effect: Rising customer satisfaction & ad rates

     

    By Ananya Saha

     

    Broadcasters have agreed to the toe the TRAI line on 10+2 minutes ad duration in a phased manner and fully with effect from October 1. Is it a good call? Will it impact the broadcast industry as the ad inventory comes down to almost half? What should be the broadcasters’ strategy to balance the revenue since it might take time for digitization benefits (subscription revenues) to shape up? MxMIndia asked industrywallahs what they think.

     

    PM Balakrishna, COO, Allied Media

    The regulation is certainly going to have an implication. There will be a huge change that the broadcast and media industry will have to make. The broadcast industry is skewed towards time bands, where prime time commands higher rates. With lack of ad space, the demand will see an increase. Price will become an issue. It is the medium that will start becoming a problem. At increased costs, the television medium will have to justify the cost to the clients. It is a preferred medium for many brands but with increased costs, they may start looking at other media options. It might create ripples.

     

    At the moment, brands and clients have not looked at it much. The industry is in the habit of not reacting till it lands on their head. But in the next one month, clients will start reacting. Going forward, a lot of advance booking will come into play. The move has been strategically placed around the festive time and hence may become chock-a-block. It will affect client and media agencies – we will have to plan much ahead.

     

    Punit Goenka, MD & CEO, Zee Entertainment Enterprises Limited (ZEE)

    Increasing rates – to keep pace with the increased reach of our media brands – is an on-going endeavour of the sales team. Now, in light of the TRAI directive, requiring us to reduce inventory which will enhance the overall viewing experience to a more engaged audience, the advertisers only stand to benefit multi-fold. So, with our advertisers getting a much better media proposition, the value for the same will also be at a premium. As such, our efforts to increase rates will only get further intensified. The extent of increase in rates will vary across genres and will be through a process of renegotiation of all contracts in a phased manner between July and October.

     

    Nina Elavia Jaipuria, EVP and Business head, Kids Cluster, Viacom 18 Media Pvt Ltd

    There are two implications of it: long-term and short-term. In the long term, it is good for all parties, including the advertisers, broadcasters, audience. It is a win-win situation in the long term, and it is important to keep that in mind when we look at the short-term implications. There is bound to a short-term pain for a long-term gain. The subscription revenues, to start showing results post-digitization, will have to wait. Ad revenues will fall. However, with limited inventory, the ad rates are bound to increase.

     

    The ad rates in kids category has not seen growth in a while. The only increase happens due to FCT or a new channel launch. Most of the growth has come from increased inventory, and it does not make sense since we tend to over-depend on it. With an increase in inventory, the ad rates do not go up. There, clearly, has been over-utilization by about 15-20 percent.

     

    We are looking at increasing ad rates by 25-30 percent. We have started working along with the clients and will comply with the deals and contracts. By the time October comes, we should be ready! However, this 10+2 ad cap assumes 100 percent usage of ad time, which might not be true especially in our category. So the ad rate increase will have to take care of it.

     

    Rahul Johri, SVP and General Manager – South Asia, Discovery Networks APAC

    Our core mission is to satisfy viewers with the highest quality and entertaining programming. We are equally committed to offer the maximum value to our clients who continue to appreciate Discovery’s networks’ efficient and effective inventory.

     

     

     

    Ashish Pherwani, Partner, Advisory Services, E&Y

    Basically, this regulation will have an impact on broadcasters. By reducing the available inventory, it will put pressure on ad revenues. Broadcasters will try to combat this in three ways: (a) reducing content cost (b) trying to increase ad rates and (c) trying to increase subscription income. Channels with a heavier skew towards prime-time advertisements will face a higher impact. What will be of interest to see is how advertisers react to the reduction in inventory available for prime-time shows.

     

    Shailesh Shah, Secretary General, Indian Broadcasting Foundation

    No one is being asked to, and no one is “toeing a line”. Every single broadcaster believes that advertising should be in line with the law enacted in the mid-1990s. There are no exceptions. Some believe this will happen naturally as consumers make choices; some believe it can be done in line with digitization. The zillion-dollar question has always been “by when”. None of the broadcasters are really ready for a fell swoop, however.

     

    Even though the law has been in existence for almost eight years (Advertising Code of the Cable Television Act), it never got enforced as the government probably felt a new industry needs to develop its roots before such a law can be enforced. The authority (aka government) apparently feels the roots have grown well and it is now time to enforce the law.

     

    Broadcasters formed a well-represented committee to find the least-resistant and least-harmful way to help make that happen. The transition it has worked out is best, under the circumstances.

     

    Will it hurt? Most certainly, in the short term it will be agony – to advertisers, to agencies and to broadcasters. On the flip side, it is an opportunity for the broadcasters to come together to ensure digitization is done completely and in a hurry so that the thus-far-elusive subscription revenue kicks in, alleviates the pain and, hopefully, makes it go away. Clearly, it will become difficult to survive if one is at the periphery of the industry or has not become relevant as yet. New entrants will find it difficult to get things going in the short term. Regional players will also face hardships. Over time, as alternative revenues come about, and the battle for lesser space intensifies, I believe the industry will find its new level.

     

    Advertising rates have always been addressed by market forces, and will most certainly continue to do so. Where the enforcement-related water-line settles is to be seen.

     

    The advertising inventory today is an average of just over 11 minutes per hour as measured from daily inventories. The inventory, where it matters, will come down, however, but much less than by half. In general, please understand that it has not been as bad as it is being made out to be.

     

    Here’s the irony. There are well over 60,000 local cable operators. No one in the Government has an estimate of more than 75 percent of these. There are close to a 1,000 MSOs. The Government knows about 60 percent of them. These distributors manage their own (mostly) local channels and, as if it were a cottage industry, are not regulated at all. It is estimated that there are well over 30,000 such television channels operated across the country and several of them produce and carry news too. In comparison, the broadcasters are licensed for just over 800 channels, operate just under 650 channels and quite a few are still reeling under the current economic circumstances.

     

    The broadcasters are the real Davids in all this and the distributors, who purport to catch a cold every time broadcasters sneeze, are the real Goliaths. I really have not understood what is being “regulated” as a result. The complex sagas of the world’s largest democracy are far more interesting than fictional dramas.

     

    To sum up, India needs to digitize at break-neck speed. The industry will hurt in the interim. The quintessential cultural undercurrent of the Indian populace and its businesses that says “this is my fate” will decide what really is the fate of the industry!

     

    Ashok Venkatramani, CEO, MCCS

    Eventually, it is a good thing – especially from the point of view of the consumer. However, the speed and abruptness with which it is being implemented is a serious cause for concern. It puts undue amount of pressure on a broadcaster who is yet to reap the benefits of digitization and is not sure how it will reflect on the revenues.

     

    In the long run, yes, it is good for everybody. It will put pressure on broadcasters like us to create much better content. And of course, it is healthy for the consumer.

     

    We are contemplating an ad rate increase, and will announce it very soon. An ad rate hike, when the regulation is being implemented abruptly, is inevitable.

     

    *Responses are in alphabetical order by last name

     

  • BCCC Chairperson Justice (Retd) AP Shah tells MxMIndia about the complaints that the broadcast authority receives, and what is being done about them

    Jaldi 5 with BCCC chief AP Shah: Unedited foreign programmes lead to more complaints

    By Ananya Saha

     

    The Broadcasting Content Complaints Council received 8,628 complaints and suggestions as of November 30, 2012. Should it be a cause for concern? Should the industry focus more on self-regulation? MxM India spoke to BCCC Chairperson Justice (Retd) AP Shah about the issue.

     

    1. What kind of role does BCCC play in the regulation of the broadcast medium?

    We have to strike a balance between preserving free speech and expression on the one hand, and on the other see that the guidelines and advisories are followed.

     

    2. What are the major complaints or suggestions that BCCC gets?

    Broadly 47 percent of complaints are on sex, vulgarity and nudity. Some 30-40 percent pertain to harm and violence. Others are related to religion or are general complaints. I think the complaints have increased due to increase in import of foreign programmes, which are telecast unedited.

     

    3. What is the advisory you issue on ‘unedited’ programmes?

    Some are asked to go off-air, or some episode is asked to be pulled. Or be put in night slot, which is the restricted slot of 11 pm to 5 am. Or we ask them to modify the content. The good thing is that when it comes to self-regulation, we have had 100 percent compliance from the channels.

     

    4. What about content on regional entertainment channels?

    Yes, there are concerns in regards to regional channels. We receive a large number of complaints from South but since we do not know the language it becomes a problem. We get complaints in language programmes such as Kannada, Telugu, Tamil; not so much in Malayalam though. We need to have a BCCC person in South India who understands the languages.

     

    5. Does MIB interfere with BCCC’s advisories?

    No. There are times when the ministry refers a complaint to us. But the ministry has not interfered with our work. We have fairly succeeded in implementing the guidelines.

     

  • A weekly column by Paritosh Joshi, until recently CEO, Star CJ. Given his varied experience in the media and industry bodies, Mr Joshi will analyse issues concerning the business of media, measurement and research

    Paritosh Joshi: How to make a really spectacular mistake

    By Paritosh Joshi

     

    In all our lives, there are tales of misadventure that we bury away deep and try our darndest to forget all about. Today it’s time to ferret out just such a story from the not so distant past and see if there’s something, anything, we might learn from it.

     

    The year was 2007. Private Television broadcasters were trapped in a financial vice. Costs were on a tear as good content: entertainment, sports or news, commanded big premia. Revenues crawled as new entrants into every genre constantly expanded advertising inventory and made price increases difficult. While advertising revenues were still growing, a lot of the increase was attributable to ever-laxer controls by broadcasters on advertising duration leading to flat, or even declining, yields. As an advertising sales person myself, back then, I asked for an analysis of Average Spot Rates (ASR), a very commonly used and easy to compute yield metric, across key genres and channels for the previous three years. My hypothesis, which proved agonizingly right, was that the bulk of revenue growth for channels was coming from selling more inventory and little or none from better ASR. Obviously, I wasn’t the only one seeking such analyses and soon the issue began to dominate all conversations between broadcasters.

     

    Here was what the broadcasters were seeing:

    • Television penetration was galloping along, adding up to 10 million new homes, up to 45 million viewers of age 4 and above, every year.
    • Cable penetration was growing by almost an identical figure, having moved up from under 30 million homes in 2005 to over 47 million in 2007.
    • GDP was up 9 per cent for 2007 over 2006 and maintaining healthy buoyancy.
    • Distribution revenues were not a source of any joy as platforms had begun to seek carriage fees to monetize the chronic scarcity of capacity on a decrepit analog network. In the meanwhile, TRAI was binding broadcasters hand and foot where it came to wholesale pricing of their content to platform operators.
    • Media agencies were relentlessly using the dreaded CPRP (Cost Per Rating Point) to pummel advertising prices down. Even category leading broadcasters were unable to exercise pricing power in the face of CPRP maths.
    • While more broadcasters constantly entered the market, the demand side represented by the media buying agencies was getting ever more consolidated. Already, the top two agencies controlled very nearly two-thirds of the advertising spend on TV between them. They had achieved this, primarily, on the back of their ability to extort low prices using their virtual oligopoly combined with the willingness to drop commission rates to low single digit percentages. While the standard terms of trade indicated a 15 per cent agency commission on TV advertising, the media majors were actually working on less than 5 per cent, passing on the spread as additional discount to the advertisers.

     

    It was clear to broadcasters that the situation could no longer be permitted to drift but what were they to do and how? A team of planners from across broadcasting organisations was asked to develop a recommendation. Everything had to be done with considerable secrecy, lest word get out and the project be stillborn. The plan was in. Voila! We would all, every last one of us, collectively impose a 25 per cent surcharge.

     

    Needless to add, the plan asked for way more resilience from broadcasters, particularly the small and vulnerable ones, than they could muster and in a classic predator-prey drama, they were arm-twisted on the pain of the death-of-a-thousand-cuts by M-this and M-that into abject capitulation. The plan unwound within 72 hours leaving a lot of us with unpleasantly puce visages. An awful mistake had been made. I could tell you the whole ugly story of who shafted whom, when and where but sadly, in a reversal of the trope, if I told you, someone would have to kill me.

     

    Now here is the really terrible story. Most everything that made the revenue story look grim in 2007 for broadcasters still looks exactly the same in 2012. Indeed worse in many cases, like for the anæmically bloated Hindi News genre for instance.

     

    What is the broadcast industry doing about it? Can something be done about it at all?

     

    First, until TV advertising is valued based on a relative, rather than absolute currency, pricing power will remain solidly with the buyers. Until we shift from the iniquitous CPRP to the universally accepted and economically fair CPT (Cost per Thousand contacts), this will not happen.

     

    Second, all stakeholders in the BARC (Broadcast Audience Research Council) process would be well advised to apply their might to moving it from idea to execution.

     

    Hmm. Someone will have to kill me after all.

     

  • This bill will allow the Copyright Board to decide the royalty rates for the broadcasters, which until now was decided by the PPL

    Radio broadcasters thumbs up to Copyright Bill

    By A Correspondent

     

    The Copyright Amendment Act which was passed recently in Lok Sabha has come as a huge relief, not only for the artists, musicians and content creators, but also for the Indian radio fraternity.

     

    This bill will allow the Copyright Board to decide the royalty rates for the broadcasters, which until now was decided by the PPL (Phonographic Performance Ltd.). PPL is the copyright society with respect to sound recordings. While the bill is clearly beneficial for the rightful owners of the copyright, how much profitable will it be for the radio broadcasters, will be known only once the copyright board decides on the rates that the broadcasters may have to pay for the copyright owners.

     

    The Copyright Amendment Act 2012 allows artists, song writers and performers to claim the royalties for content creation. While the bill has also made it mandatory for both radio and television broadcasters pay royalty to the copyright owners each time their content is broadcasted, what it also ensures is that unlike before, the amended Copyright Act will allow broadcasters to pay music royalties on a pro-rata basis. As a result, it will help broadcasters generate more revenues.

     

    What they say:

    Speaking to MxMIndia, Ms Anurradha Prasad, Chairperson cum Managing Director, B.A.G Network and president of Association of Radio Operators for India (AROI) said: “We welcome the Copyright Amendment Act because it will bring a sea change in the industry. The radio industry has been bleeding because of the huge royalties it has to pay for the music. Therefore, it is a great step forward, and I believe it is a win-win situation for the entire chain because it will bring in more transparency and, as a result, more revenues will be generated.”

     

    Mr Vipul Pradhan, CEO of PPL said that while he welcomed the amendment that the royalties be given to the rightful owners of the content, what he is not pleased with is the statutory licensing for users as it would take away the monetizing rights of the music companies, nevertheless, PPL will abide by the law. “We welcome the Copyright Amendment Act and we will follow the new law. We welcome the first part of the amendment which allows the rightful owners of content to get their royalties. However, it is the second part of the amendment – the statutory licensing for the users is something that we are not happy about.”

     

    “The statutory licenses for the users are basically the people who are using our content as business activity which is where I think the statutory license of content for radio or television is something that is not desirable. We will see how the statutory licenses for users will impact the music companies in the long run. So, while we welcome the move to allow artists and content creators to claim their royalties for their work, it is the statutory licensing for users that concerns us because it will take away the monetization rights of the music companies, which in the long run could affect the creation of these rights,” he added.

     

    Rabe T Iyer, Business Head, Big FM explained: “It is a constructive and beneficial step in truly recognizing the real owners of music and not just the labels who pitch and buy them. It is also a fair distribution of rights which will lead to increasing talent pool, greater accountability of quality and continued effort to innovate. I believe it will provide greater flexibility for radio stations to play music recomposed or readjusted by creators of songs and it will allow more artists, song writers to get their dues.”

     

    Mr Amitabh Srivastava, Country Manager, Radio Netherlands noted that this move is very much in sync with industry requirements as it would resolve most of the royalty issues faced by the radio industry. Mr Srivastava also said that unlikeIndia, the international model of intellectual property rights is quite rigid as it ensures that the owners of the copyright get their due shares, and that with the passage of this legislation we can expect international standards in copyrights as well. “This bill is more beneficial for content owners than the radio broadcasters. This bill will bring legitimacy in the royalty issues and it will promote more self generating content which is not happening right now. So, it is a welcoming change because when copyright is legitimized, even the broadcasters will be allowed to create their own content which we do not see taking place as of now.”

     

    Shreyams Kumar, Director Mathrubhumi said: “We don’t mind paying money to the artists, but paying money to the music companies which does not reach the rightful owners is what we don’t approve. Thus the Copyright Amendment Act is a welcome move as it will lead to more transparency in the music and broadcast industry. This amended act will definitely be a cost saver for the radio industry and it will certainly help the radio industry in the long run.”

     

    Ms Monica Nayyar Patnaik, Joint Managing Director at Eastern Media Ltd and Mr Naval Toshniwal, CEO Tomato FM and Vice President, Pudhari Publications were of the view that this bill is a step in the right direction which will benefit the radio industry and act as a cost saver for the industry.

     

  • A new notification issued by the regulator on Monday limited the amount of advertising on TV channels and disallowed any shortfall in a particular hour to be carried over

    Broadcasters slam TRAI notification to limit ads

    By A Correspondent

     

    Broadcasters and advertisers have slammed Telecom Regulatory Authority of India (Trai) move to limit the duration of television advertisements to 12 minutes in an hour, and accused the regulator of exceeding its brief.

     

    A new notification issued by the regulator on Monday limited the amount of advertising on TV channels and disallowed any shortfall in a particular hour to be carried over. According to industry estimates, this could impact advertising revenues of broadcasters by 15-40 per cent.

     

    “Trai has no jurisdiction in the subject. Advertising is governed by the Cable and Satellite Act and the appropriate authority is the ministry of information and broadcasting,” said Uday Shankar, president of the Indian Broadcasting Foundation, and the chief executive officer of Star India. “The regulator is overstepping its brief,” he added.

     

    According to Mr Shankar, the low revenues from subscriptions give broadcasters no option but to rely on advertising inventory and revenues to survive.

     

    An Indian Broadcasting Foundation official said an earlier government guideline stipulated that Trai could issue an advisory with regard to advertising but not a notification.

     

    Sunil Lulla, managing director and chief executive officer of Times Television Network, which runs Times Now, ET Now and Movies Now channels, too criticised Trai’s decision. “This move is completely ridiculous. Self regulation is the best regulation,” he said.

     

    “This move will have an immediate impact because right now there is no other big source of revenue for broadcasters,” said Rohit Gupta, president of Multi Screen Media, the company which runs Sony Entertainment Television. The IBF will appeal against this new regulation, he added.

     

    Barun Das, chief executive officer of Zee News, questioned the timing of the regulation at a time when the entire broadcasting industry was going digital. “We have a limit mentioned in the Cable Act. If at all there is a need for regulating duration of advertising, it possibly could have waited some more time for the digitisation process to settle down.” he said.

     

    Mr Das said his channel had voluntarily cut its advertising inventory by 30per cent earlier this year. “We realise that too much advertising is a deterrent to viewership. We were not driven by regulations, rather we were driven by market forces,” he said.

     

    Mr Das said the viewers had choices not only of channels but also of media platforms. “I am not sure if advertising volume needs to be regulated. I would tend to believe that too much advertising would anyway drive away viewers,” he added.

     

    Sale of television rights have become an important source of income for sports bodies such as BCCI but the restriction on advertising will adversely impact the ability of broadcasters to recoup their investments, forcing them to scale down their bids.

     

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

     

  • The I&B Ministry has clarified that there is no doubt about the broadcast bodies’ self-regulatory capabilities.

    All’s well as I&B promises to route content complaints via self-regulators

    By Ritu Midha

    Putting broadcasters’ concerns at rest, the Information and Broadcasting Ministry has said that cases related to the violation of content code would be sent to the News Broadcasting Standards Authority (NBSA).

    Members  of NBA, IBF and BEA met  the Information & Broadcasting Minister Ms Ambika Soni and a few ministry officials in the late afternoon on October 11. According to sources, the meeting ended on a very positive note, with the ministry clarifying that there was no doubt about the broadcast bodies’ self-regulatory capabilities.

    The minister, as per the sources, appreciated the work done by the broadcasters in the area of self regulation, and also stressed on the need of strengthening it further.

    It is now understood that objections, if any, pertaining to the content on any of the private television channels, would be routed to the NBSA, headed by Justice Verma. Action, if any, would be taken post deliberations by NBSA.

    As is known, NBA was not too happy with the proposal for amendment in policy guidelines for uplinking/downlinking of TV channels approved by the Cabinet last Friday. The proposal among other things stated, “Renewal of the permissions of TV channels will be considered for a period of 10 years at a time subject to the condition that the channel should not have been found guilty of violating the terms and conditions of permission including violations of the Programme and Advertisement Code on 5 occasions or more.”