MxMIndia

Tag: TAM

  • The apex bodies of advertisers and agencies assert they are not delaying the setting up of BARC

    It’s incorrect to blame us on BARC delay, say ISA & AAAI

     

    By A Correspondent

     

    With news network NDTV suing television measurement body TAM Media Research and its principals, it’s become critical that stakeholders of the proposed Broadcast Audience Research Council (BARC) get their act together to provide an adequate framework for research and ratings.

     

    For, if industry bodies do not act speedily, the government could well step in. It was hence interesting to read IBF president Uday Shankar’s assertion that the apex bodies of advertisers (ISA) and ad agencies (AAAI) have been speedbreakers in the setting up of BARC.

     

    Nagesh Alai

    This statement of not showing enough urgency has not gone down too well with the Advertising Association of India and Indian Society of Advertisers. Said Nagesh Alai, former AAAI president and current ex-officio member: “It is unfortunate that such a comment has been passed. At the end of the day, who are the constituents of the industry? The advertisers, broadcasters and advertising agencies and each of them have a role to play. When all of these are stakeholders, how is it possible that ISA and AAAI will be uninterested in moving BARC forward? The fact remains that we have been engaging with them regularly and have come to an agreement on what the constitution of the shareholding would be; what should be the constitution of the board of governance and what should be the operating principles. All these have been captured in the draft of Memorandum and Articles of BARC, which is with the IBF.”

     

    He added: “We’ve met and agreed in principle on the key issues and have put down those things in the document as it is very necessary to start off. It is lying with them now. As I see it, it is work in progress. There is no question of us not being interested or not wanting to take this forward – how can it be? It is just not a rational statement. Just to recall, three years ago, AAAI was one of the prime movers on BARC – it was our idea.”

     

    On the current status of the draft, Mr Alai said: “As of now, the Memorandum and Article document that needs to be signed by all stakeholders is with IBF. All the recommendations in the draft have been taken jointly by the three member bodies. It is just the question of whatever is there in the draft is seen and accepted by them and we sign and move on from there. As I see it, it would take another one or two months for the signing process to take place; it all depends on how soon IBF responds now. But let me tell you that we will continue to work in partnership so that we are able to come up with a system that is robust and liked by all.”

     

    Meanwhile, when asked for its standpoint on the issue, the ISA reverted with the following statement: “The Indian Society of Advertisers, who initiated the formation of BARC based on the World Federation of Advertisers’ best practice of forming a Joint Industry Body (JIB) for television audience measurement, would like BARC to start tomorrow. We would not like to join the blamegame, as a joint industry body BARC is necessary for robust and transparent TRPs. As for NDTV versus TAM issue, we cannot comment on it as the case is still sub judice.”

     

    Bharat Patel

    When contacted, Bharat Patel, past chairman of Procter & Gamble and chairman of ISA admitted to BARC facing some tough times but said that it will be back on track soon. “There have been ups and downs but you must understand that this is a new baby and it is bound to take a long time. Also, there are huge investments involved. But then it should happen soon,” he said.

     

    On the IBF president’s statement holding the ISA and AAAI responsible for the slow progression, Mr Patel said: “It is incorrect. It’s got nothing to do with the AAAI or the ISA. As I said, these things take some time. We have reached a stage where we are finalising the articles and once that is done it should move fast.”

     

    “One must also realise that people have their own job/business to cater to,” Mr Patel added. “One has to have enough time on hand as people who are involved in BARC have their own jobs to look at too. For me, the real issue is that people are not finding the time to get together. I cannot give a timeframe at this stage as I cannot speak on behalf of other people but then it will happen soon. In fact, ISA wants to get started with it from tomorrow itself as we were the ones who initiated the global best practice JIB by the name of WFA. But you will see it happening soon.”

     

    While the statements from AAAI and ISA reiterate the commitment to the cause of setting up a credible measurement metric, it’s critical for the trio of IBF, ISA and AAAI to put aside differences and work amicably to safeguard the future of the industry. The ball for now is in the industry’s court. If it doesn’t act fast enough, the government could also be an active participant.

     

  • BARC chairman Punit Goenka indicates that the committee of eminent experts is being constituted and an announcement will be made in two or three weeks

    BARC next announcement in 2-3 weeks: Punit Goenka

    By A Correspondent

     

    Even industry captains privately told MxMIndia that NDTV lawsuit against TAM and its principals would not have happened had all stakeholders shown urgency to get Broadcast Audience Research Council (BARC) off the ground, BARC chairman Punit Goenka told MxMIndia on the sidelines of the Indian Television Fest press conference that one can expect some announcements in next two or three weeks.

     

    A group of ’eminent experts’ has been spoken with to constitute the apex advisory committee and with each one’s concurrence in, an announcement will be made.

     

  • MxMIndia invited Atul Phadnis, CEO, Whats-On-India to write on the issues the NDTV-TAM litigation has thrown up

    Atul Phadnis: Industry must not duck core issues on measurement

    By Atul Phadnis

     

    Atul Phadnis

    All of us have read the astonishing news of a lawsuit in recent days in a New York court making allegations on the efficacy, integrity of TV Ratings in India. A lot of us in the TV Broadcast industry have perhaps turned to our nearest industry colleague the moment we heard this news and blurted – “See! I told you that something like this was going to happen one day!!”

     

    Unfortunately, for the entire TV industry this is bad timing when already nerves are frayed with the Cable Digitalization issue! I would consider this development as a time to reflect on how we, the TV sector, have got into this position and how all of us collectively have been responsible for the mess with TV measurement.

     

    Lets look at the key questions that need answers urgently before more damage is done that could potentially destabilize ad revenue structures within the industry.

     

    The Burgeoning Issues with TV Ratings

    There is no doubt that there have been problems associated with the way TV Ratings have been measured in recent years. Some of the methodology related issues have also played their part in getting things down to this latest litigation :-

     

    1. For instance, take the issue on the validity of some of the parameters used to select sample homes. More than a decade ago, a panel quota system called Primary Control Variables was introduced with 5 main factors to select panel homes. Some of the parameters have remained unchanged in spite of their doubtful use in recent times.

    2. One such question that needs to be asked in this regard – do we still have Colour versus Black & White TV sets – as one of the factors? If yes, is this factor relevant at all today? And by sampling on irrelevant factors what sort of panel would be constructed? If this is not a factor any more then what’s replaced this? Has industry approved (or is aware of) a new sampling methodology?

    3. Do we still sample homes on the basis of Terrestrial versus Satellite? Should the Satellite sampling not be modified to sampling within these homes by Cable/ DTH players-wise market-shares? Not having this correction means dreadful, crazy results for certain channel genres. Again ignorance is bliss for the industry at large with this question not being asked.

    4. Why should the 600th or the 650th channel be reported for minute-by-minute ratings by market and by target group? Are we not playing with fire with samples for that 600th channel down to 1 or 2 or 5 people within the panel! In fact, this sort of low samples thresholds could also make any research system extremely fragile and vulnerable for interference by external forces.

    5. A continuation to the earlier point is that why should India not follow the practice from other mature markets wherein channels falling below a sample threshold are not reported for certain analysis types. So you may get weekly Channel Reach but not minute-by-minute viewership sliced by markets and target audiences.

     

    So the question that begs answers is – how can we continue the panel home selection and reporting on criteria, parameters and rules that are a decade old? These need to be contemporized with todays realities. And with industry support and consensus.

     

    INDUSTRY APATHY

    Incidentally, at this stage I must ask you, the reader, to mourn for a minute, the sad, silent demise of the Joint-Industry-Body. The JIB that had taken birth in the early nineties to guide TV measurement initiatives in our industry passed away a couple of years ago. His daughter – the Industry Technical Committee, who oversaw critical issues such as panel home selection methodology, technology selection decisions also had an untimely death. They both died waiting for its members to come to their rescue.

     

     

    BARC – The Puzzling Enigma

    A lot of folks will recall enthusiastic announcements several moons ago about the creation of BARC – a joint initiative by three industry associations. The promise was to create a new TV Ratings system with the circulation of RFPs, finally leading to a Tendering and Commissioning process. The puzzling part that was unaddressed or unclear in the BARC strategy was what happens to the here-&-now even as the new system comes about. Read on…

     

    1. For instance, why could industry not take control of the way TV Ratings are being done today? One Option would be for the top 5 Media Agencies and TV networks to pool their current TV Ratings deals to pursue a unified conversation with the data supplier.

    2. Why should industry as a first step not address the ‘here-&-now’ issues and ask for weekly panel KPIs from the incumbent measurement company? Panel health indicators, number of suspect samples and observations, past complaints and their explanations – could easily be taken up in a structured manner. Why should everything rest on the ‘utopian’, ideal system that might take another 1 or 2 or 3 years to come by?

    3. What will it take for some of the allegations and accusations being made routinely in private quarters to be audited by an independent, neutral organization? Why cannot BARC be the redressal body to sort issues relating to TV measurement? After all it has the support (and mandate) from IBF, ISA and AAAI. If an effective redressal system existed would any player have gone to court in the first place?

     

    Agency Media Buyers : faith beyond belief!

    That the average media buyer considers TV Ratings outputs as the gospel truth is well known. Imagine this guy (or gal) who is perhaps sitting in the agency at 10pm churning data for the 633rd ranked channel. The analysis is minute-by-minute viewership for Jharkhand, SEC AB, 15-24 years and is being done since the Buying Head has a meeting with that Channel’s team the next morning.

     

    At that precise moment what should have happened is Helicopter Gunships should have descended on the rooftops of that agency, Black-Cat commandos should have whooshed in through the AC ducts and screamed at that buyer “STOP! You cannot look at min-by-min trends for a microscopic market-audience for the 633rd ranked channel!”. But none of these stunts will happen. The Buying Head will receive the analysis in time for the meeting and will happily use that data to negotiate ad rates, oblivious to ludicrously low sample sizes! Sad, but true.

     

    Conclusion

    My last word on this is that – as an industry if we continue ducking the main, fundamental issues in this space we will keep having disturbances that hit at the revenue stability and predictability that measurement brings in. It’s finally our choice – yours and mine!

     

    Atul Phadnis is CEO, Whats-On-India. He has been associated with all aspects of the measurement process – as a media planner, employee of TAM, a broadcaster and now a technocrat

     

  • NDTV takes TAM, Nielsen, Kantar and others to court for $580 million

    NDTV takes TAM, principals to US court for $580 million [updated]

     

    By A Correspondent

    Leading news and lifestyle television broadcaster NDTV has taken TAM and its principals Nielsen and Kantar to court. “We confirm we have filed a lawsuit in the Supreme Court of New York State. Because the matter is sub judice, we have no further comments at this time,” said an NDTV spokesperson. And here’s the response from the TAM spokesperson: “TAM India, a 50:50 Joint venture between Kantar Media and Nielsen, doesn’t comment on any litigation.”

    According to a report in Courthouse News Service and Entertainment News Digest (link: http://www.courthousenews.com/2012/07/30/48808.htm and http://www.entlawdigest.com/2012/07/30/1672.htm) :

    It seeks $580 million on 42 counts, including negligence, gross negligence, false representations, prima facie tort and violations of the FCPA and Dutch Corporate Governance Code. It claims that the Dutch Corporate Governance Code requires that Nielsen, a Netherlands-based company, act in the interests of all corporate “stakeholders.”

    The Defendants include five Kantar entities, TAM and 14 Nielsen group entities, Nielsen CEO David Calhoun and its directors James Atwood, Jr., Richard Bressler, Simon Brown, Michael Chae, Patrick Healy, James Kilts, Iain Leigh, Eliot Merrill, Alexander Navab, Robert Reib and Scott Schoen.

     

    [we’re unlikely to see any more updates on this, but we will update the story in case there are any]

  • The delay may have impacted the momentum, but TAM Media is ready for the new digitized tomorrow, says its CEO in a detailed interview

    TAM’s set for Digitization: L V Krishnan

     

    If there ever was a poll in the television industry professionals to name the one entity that impacts their business the most, it will not be the Government of India which has, mercifully, been taking a backseat in recent times. It’s TAM Media Research of course since it manages the ratings. Heading TAM since October 2000 has been LV Krishnan. Other than the owners and a few professionals at some of the networks, he has been one of the few constants in the business. And that puts him in a vantage position as the Indian television industry gets set for its big leap into digitization. Although delayed by four months in the four meros, digitization can indeed alter the course of the broadcast business in the country.

     

    In an interview with MxMIndia’s Pradyuman Maheshwari,  Mr L V Krishnan speaks on how TAM Media is getting set for the new world, the investments he’s making for the 650 boxes in the four metros and 20% increase in staff and most importantly the opportunities for smaller, niche players post-digitization. For once, we are not publishing excerpts from the interview, but nearly the entire transcript given the nature of the content and the benefit of the industry. Here goes:

     

    With just a little more 100 days left for the new Sunset Date, how is TAM getting ready for digitization?

    Actually for us, the July 1 was the date when digitization was supposed to happen. So, we expected it will hit that date and things will move forward from there for at least the four cities. We didn’t see the four cities as the big issue clearly because there was a certain percentage which had converted into digital in the last three years as a slow-burning exercise.

     

    As per a TAM Study, as on Jan 2012, Mumbai already had touched a digital penetration of 25% and Delhi touching with a score of 20%. The other two metros, Chennai and Kolkata were lagging behind.  Interestingly, if we look at those same figures in first week of June 2012, those same numbers for Mumbai had shot up to 35% and Delhi to 26%. Chennai and Kolkata which were lagging behind as of January had by now touched around 24%.

     

    Awareness in the markets on digitization was really high. In Kolkata there was 90%+ awareness level, Delhi and Mumbai had close to 80%. So, from the awareness and on-going installation perspective it was going very smoothly. Except that there is a gap between the awareness and the actual set-top box induction into homes. So, at TAM, we expected that all will culminate on June 30 when the sudden peak happens. And we expected digitization to hit close to 60% by June 30 if the deadline had been kept in pace and implementation went rampant. So that’s how our panel was also moving forward. The TAM panel hence is already 35-40% digital homes in these markets, especially in Mumbai and Delhi.

     

    Now once the digitization hits in, we are expecting three things to happen.

    1) The access to long-tail channels (many of them with unique content targeting viewer segments) which means the channels which are not presently seen on TV screens due to bandwidth issues at the operator’s end suddenly jump up. Therefore, the number of these long-tail channels will grow significantly.

     

    2) There will be an initial 8- to 12-week period when audiences are going to try new genres or new channels before they settle back to the list of favourites.

     

    3) There is going to be higher growth in time spent in other day parts in various segments of audiences which you don’t see much in the present analog era.

     

    So, considering these things in our analysis, we have planned out an expansion of the TAM panel in the four metros by an addition of almost 50% of homes. The objective of the expansion is to give a boost to more sample viewers to these long-tail channels, enabling more robustness in the data we provide to users.

     

    More than 50% homes in Delhi, Mumbai, Chennai and Kolkata?

    Yes. An additional 650 homes.

     

    And this is in line to the announcement you had made earlier. (see TAM to cross 10,000 Peoplemeter mark soon @ http://www.mxmindia.com/?p=22044)

    Yes, the announcement that we made in the month of June about the expansion of the sample size.

     

     

    You just said that 20 days before the deadline, 35-40% digitization was achieved. So if digitization had to happen by July 1, there was a fair distance to be walked?

    Ever since the digitization exercise started on the ground, TAM began to conduct a baseline study. The once-a-year baseline study we release on digital penetration every Jan has now become almost a monthly study from May 2012 just to gauge the digital penetration in the four cities. The first wave encompassing 12,000 homes in the study across the 4 cities was ready three weeks prior to the deadline of July 1. This showed that while the penetration levels in a market like Mumbai were 35%, we were on way to touch a 60% mark of digitization if we had kept the pressure up through the month of June 2012 (since awareness levels for digitization were over 80%). We had the entire month of June left!

     

    Do you think the path for digitization has slowed down again?

    The growth certainly seems to have slowed down as per our present on-going baseline study.

     

    Are you optimistic about the Oct 31 deadline?

    There was a clear momentum in May and June because there was communication happening at an overall industry level to consumer about the impending digitization. I haven’t seen any new communication about the new deadline and will have to check the data to see if new communication informing consumers about the new deadline of digitization has started or not. In the absence of the lack of new communication, obviously the demand of those boxes is not going to come up immediately. It will only get pushed from platform owners – DTH or cable operators – to push the box into the home by telling consumers about the Nov 1 deadline. Given that there was 90% awareness in markets like Kolkata and 80% in markets like Delhi and Mumbai about digitization happening on July 1, the conversion could have been much higher if the date had not been pushed. The minute you push the date there is a slack in demand. Now we need to bring back that awareness of Nov 1; it requires that much more inventory-burning from broadcasters to make that awareness. And at the same time, synchronize it at the local level to make the consumer buy into the set-top box. It’s another big task.

     

    Back to the 650 additional boxes, when will that happen?

    We had kept the time between July and December, keeping in mind the July1 digitization as obviously, all these new panel homes too will be in the digital end of the market. Now with digitization being pushed back to Nov 1, while our present panel will automatically align to the new digital universe, we will have to ensure that for these new additional panel homes being recruited, the profiles we select are in alignment with the new digital universe profiles too (via using our baseline studies again). That may require some additional time. Work is in progress.

     

    You have three levels of data currently – analogue, CAS and DTH, will you now have four levels of data?

    In markets like Mumbai and Delhi, there is already Terrestrial, Analogue cable and Digital (which has representations of Digital cable and DTH). What will happen is that analogue cable will get phased out completely after Nov 1 and what will exist is only Digital cable and DTH. The only interesting fact is that, the DAS is applicable to the city part in the phase I, it’s not applicable to the Urban Agglomeration (UA) part of the city. So for the city part from a TAM perspective, whatever is reported will be for Digital, because any analogue signal will be considered as pirated signal automatically and cannot be reported as per the legislation. How much of the digital happens in the UA part as it does not fall under the phase I exercise, will have an impact on overall city reporting. So if UA part becomes 100% Digital too on Nov 1, then there won’t be anything called analogue data for the 4 cities.

     

    But it’s going to take some time, right, since UA part goes digital only in 2013?

    Part of UA is in Phase II and part of it is going to Phase III as per the legislation. But we see digital conversions happening in UA part too presently.

     

    A city like Delhi also has a complex UA…

    Delhi has NCR. So how much of it gets converted after Phase I, we will have to watch through our baseline. My guess is, Delhi is much easier than Mumbai and Kolkata.

     

    You mentioned about the channels which are in a sense on periphery now in analogue but will now get noticed. How equipped are you for this since the extent of data you will crunch for the larger number of channels will leapfrog?

    Because more long-tail channels are going to become accessible, but those channels base level viewers are going to be minuscule in nature.  So, to bring in more sample viewers to these long-tail channels is why we are boosting up the sample numbers in these four markets so that they also have equal opportunity to grab viewing that mainstream channels have.

     

    The interesting eventuality of digitization is distribution parity. This itself will ensure that every channel will have equal opportunity to get sampled by the viewer. Now given this distribution parameter as constant, the preference of the viewers will be based on the following parameters:

     

    1. Inheritance of loyalty – today what I watch is what will get carried over in the digital era given the fact that content is not going to change but it’s only the accessibility that is going to increase.

     

    2. Marketing and the promotional effect – The one who yells the loudest will get the largest walk-in. The bigger strength of network stations will emerge out in digital phase than the independent stations. Clearly, because the independent stations will not have the bandwidth to talk to larger segment of the population and address it through marketing and promotional campaign.

     

    3. The buoyancy of viewing – the large accumulation of family members will continue to drive viewing patterns dramatically. Digitization is not going to bring about a revolution in number of TV sets in the home, it’s only going to increase the bandwidth on the same TV sets already accessed by the family.

     

    So all these things will ensure that on one hand while accessibility is created in distribution, the present set of genres that capture larger set of viewers, will not change dramatically even in the digital era unless and until some of the smaller channels start shaking out of being independent to start joining networks or using the networks to become more dominant.

     

    Which is what the job of a bouquet is… and we also have a bouquet for independent channels in existence in the form of Prime Connect. To give you an example from print, the magazines crib that the readership survey is unable to monitor niche publications and how they are read and consumed. Given that a lot of niche channels will come up, how well these are going to be measured?

    It will happen in three stages, in order to capture the unique content channel’s viewing patterns.

     

    The stage 1 is when we are doing the base line studies. We had done this study in June and will continue it in July and August, September, October, November. It will roll on till the end of the year to get an essence of how the things are changing on the ground and we’ll keep reflecting that change in the panel. It will be like a mirror data set.

     

    In this baseline exercise, we are also capturing the most important data which is called the tier-packages that homes are subscribing to in the digital era. In each tier, we are also capturing the kind of channels that are coming into those tier packages. Now if we start looking at the kind packages that are getting developed and the kind of subscription those packages are fetching, we see that packages are centered either around Kids Content (in only homes with Kids as household members), language (regional flavour adding to it) or lifestyle (which is to do with premium channels per se) or it could do to with functional content (which is to with education, food etc.). So when you look at these tier packages brought into a home, we see that it is centered towards fundamental variables like availability of Kids in the home, Language spoken in the home or the lifestyle that they lead in home. And if these fundamental parameters that are assigned to purchase of tier-packages are already built in the sampling plan itself, then there shouldn’t be any conflict at all between the growth in tier packages vis-a-vis the data we report for Unique Content channels. We already have variables like Kids presence in the Home, Language Preferred in the Home as fundamental variables in our panel home selections.

     

    And is this data is from TAM study?

    Yes. So, for example, when we do the measurement, we are already planning and selecting homes in such a way that the proportion of families with kids are taken care of in the base sampling. The proportion of different languages in the city of Mumbai is also taken care of. Hence when we have the fundamental variables already in place in the base sampling plan itself, the variables that will affect purchase of tier packages at consumer end is already taken care of. Now what could be happening is that there may not be enough viewers that might exist in the panel while reporting a channel within a small unique content genre. So than you do boosting in specific target segments, keeping in mind the variables we can weight back to the Universe. Hence in a larger sense, these additional set of homes we are introducing in the panel across the four metros post digitization is to give a boost to the base viewers for these kind of unique content genre channels, which we call as the long-tail channels. Eventually, there will be new specialized genres coming up like Auto genre, Fitness genre, International Travel genre etc. trying to reach out to Unique small segments of audiences. The advantage of digitization is that you can talk to segmented audiences without worrying about the spill-over effect to audiences not connecting with that type of Content. As the scenario pans out, the panel is getting ready to capture these kind of future audiences too.

     

    And we are going to have a la carte too so if a neighbour tells me that I should try out Channel X, I can subscribe to just that… Therefore, there could be a boost in terms of reach for a channel after a few months of digitization starts which will also need to be captured.

    Yes. Actually what you are seeing is a trend among the homes that have got digitalized. In fact, most of the homes presently have gone for either the basic tier with language channels or for all the channels that are available. The minute the digitization comes into play full force, they’ll make sure that the channels they want are all there plus any other host of channels the operator is providing, so there is no clear cut-off limit. The reason is that, they might want to experiment with what they like and what they want to explore so after some time, they might go back to the operator and say these are the actual list of TV channels they would want (and not want) and therefore, is there a package you can give us or you want to give us a full-fledged bouquet of all channels put together.

     

    Presently, from the Digital Homes data, the accessibility of channels have increased tremendously but consumption of these long tail channels haven’t grown in similar proportions.

     

    As digitization starts maturing and audiences start coming up with preferences according to the likes and dislikes of family members, this is where we are going to see the biggest impact of Digitization and the need to get ready in the future to handle such customers by the Broadcast and Distribution community. Audiences will start selecting channels and creating preferential set of channels they want to watch and those channels may not be mass audience genres in nature. We will be using the baseline data plus the subscription data that comes from operators to tell us that which kind of profile of audiences are choosing what kind of packages and see how we want to make them inclusive in the Peoplemeter study.

     

    Ok, what if a new channel comes up catering to just Class 10 ICSE students… that’s not going to have pockets in terms of location. How do you plan to grapple with issues like these?

    In the sampling plan, we are ensuring that there is enough representation of homes with kids in the age band of 4 to 9 years and 10 to 14 years age. But it is important here to realize that Peoplemeter measurement is not the only way and the final way of measuring audiences. Hence the reason TAM is already working with couple of Digital TV platform owners and exploring the usage of STB in measuring audience behavior for channels broadcasting Content in Unique genres. Gradually, as Digitization grows and segments get created in viewing patterns, there will definitely be other forms of data available to gauge viewing behaviour from TAM.

     

    I am not worried about channels that are seeking audiences that are mass segments of population or segments that are language oriented in nature or catering to specific demographic segment of population…because those are things that are already taken care by panel that we have built in already. I am looking at channels that are closeted towards specific kind of audiences. Like a sport that may be among a certain class of audiences who may be playing and watching that particular game – those kind of homes may be too small to get represented fully in a panel. Maybe there are few in the panel that are watching that sport and also playing it but they may not be enough sample size to represent that kind of audience. That’s where we will continue working with Digital platform owners and help in unraveling the behavior patterns of that specific group of audiences. In this regards, we have already taken the first steps towards unearthing these kind of information for future.

     

    In the case of channel selection to a panel, it is choice made by TAM or does the channel pay for it?

    The fact that the channel in a genre is existing and viewed by specific kind of audiences means that it gets reported in TAM. But in the coming months, the TAM Measurement Science unit along with their international counterparts are giving this rule a hard look. There may be minimum cut-off requirements for new channels and some existing channels in very small genres to qualify for reporting in TAM on a regular basis. The white paper is being presently under discussion and will be discussed with the industry members before it comes into implementation. Of course, subscription to the service of TAM has nothing to do with a channel getting reported or not. The data reporting will continue to be operated as per set international guidelines and norms governed by the Measurement Science team.

     

    It is just about four metros right now in the Phase I of digitization, but as we go forward, do you anticipate greater complexities?

    In terms of geography growth, yes, it is going to be a much harder task to ensure 100% compliance to digital in hinterland markets. But the interesting aspect of digitization presently is that, its penetration is higher in mmall towns and rural segment of population than in urban areas and the metros. So in a way, by the time the legislation hits these small markets, 50% of homes could have anyway got digitized already. First, we should get this process started in the four metros. The benefits of digitization needs to be experienced and then communicated to help other markets see the exercise in the right light.

     

    On the consumer front, there is much more homogeneity in the TV viewing behaviour than the heterogeneity we observe in various other segments. Whether it is eating food at home or clothes we wear, there is much more diversity among families in those areas compared to the homogeneity that exists in TV viewing. 80 per cent of what constitutes TV viewing will get constrained by the top 30 or 40 channels, even though the accessibility can go upto 500 odd channels in the home (as per TRAI guidelines). Because ultimately time spent that dictates channel share will actually get compelled to be limited to those 30-40 channels.

     

    Now, what makes these 30 – 40 channels preferred by the viewers will be depended on the stimuli which will be based on the content that these channels put in, which has led to loyalty over the last couple of years. Second, from the POV of marketing and promotions, and thirdly, on the kind of pricing they offer as a bouquet. So, I do not see any big changes on that 80 per cent of the viewing time spent presently. But, where we see the alterations in terms changes in viewing patterns is between the channels within the genres and within the remaining 20% of the viewing time for the long-tail channels. Those long-tail channels that have accessibility – they will have to start fighting and come into prominence among the viewers’ mindset to say: hey, I am here can you have a look at me and sample me much more effectively than what you are doing in the early analog world. They will need to start edging towards becoming the 38th or 39th channel from the bottom and enter into the mind space of the viewer.  And how they do that will be will be their forte in marketing, programming, scheduling etc. From our perspective, we will be ensuring that, with the panel expansion, these channels will have more sampled homes to benefit from if they create more base viewers for their content.

     

    To give you an example of say a Bhojpuri channel that has picked up steam over a period of time…

    True. Suppose the Bhojpuri community is about 3 per cent of our population in Mumbai. Therefore, the sampling process itself will have around 3 per cent of the population being built within that community itself cecause language is one of the variables in which the viewing is done. So when Bhojpuri comes into play and becomes a dominant player – to become a dominant player it cannot restrict itself to be a channel that is getting watched within that community because the 97 per cent is larger than the 3 per cent. Hence they will have to start influencing that 97 per cent community to come and watch Bhojpuri channel. From the community that belongs to the Bhojpuri segment, the viewing will be picked up effectively. But if they want to fight the 80 per cent share, they will have to broaden their inputs / stimuli.

     

    But a golf channel will never appeal to audience not interested in golf…

    Sure enough, but the fact of the matter is that while there may be a golf-loving community, there is nothing that prevents a non-golfer to watch that content provided there are stimulis that garner his interest to watch it. For example if Big B or a Salman Khan inaugurates a golf tournament or even starts playing in a Golf tournament, there is going to be a follow up audiences who are going to come in and tune to that content just because of the star attraction. Hence, branding need not decide who the audience is going to be, it is the weapon of Marketing and Content that will decide who the audiences are going to be.

     

    But what does all this mean for the TAM organization? You are looking at 650 boxes, but how many humans….

    For us it is an exciting phase beginning next goal of growth largely. It is going to begin from the expansion exercise that we are planning to undertake but, beyond that it is going to much more in trying to unearth new ways to measure a digital mobile audience and in exploring data by building analytical tools for our users to use the data for business decisions.  So the compounding factor will be how the growth rate of digitization will happen and in which form it takes shape.

     

    There are newer technologies that come into play, that is, technologies which are moving television, out of home. In that case, we are ready to move with picking up data on in-transit devices like mobile phone or a tablet kind of devices. So it is a kind of anticipation game that we are in to see how things are going to move, which curve digital phase moves into and how consumers are adapting to it so that we have the requisite capability to measure those kind of changes that are happening instinctively.

     

    And in terms of team strength?

    The good thing about technology is that it takes care of growth in terms of team size which may not be proportionate to the growth in which the technology we implement starts growing. It is more of capability rather than sheer no. of hands per se. So the same person handling one meter technology is now equipped enough to handle two different devices to manage across platforms effectively. So, the 650 meter expansion is not necessarily leading to the increase in number of hands but more in terms of capability of the individual to handle analog measurement as well as digital measurement.

     

    The sheer number of channels you are going to be handling…

    On the client management side and analytics side obviously there will be much amount of hands that will come into play.

     

    What kind of percentage…

    At least around 20 per cent more which will happen this year and next year.

     

    Are there more investments coming into that?

    Yeah! But the biggest investment is the meters, the technology itself because fixing the meters will be proportionately close to 25 to 30 per cent of the existing cost. Then there is the variable cost of running the operation for the additional 650 homes, so effectively there will be close to 50 to 60 per cent higher cost that we will have to absorb to make this exercise happen.

     

    On whether these are met internal accruals?

    It is presently internal because we believe the fact that it is the need of the hour as digitization comes into play. We need to put them in place to ensure that the data continues to be robust and moving forward usable in a practical way for decision making by small channels. At the same time the cost will be spread across a couple of years for clients so it will be a combined exercise.

     

    Any areas you think are your challenges in this whole process?

    I think the biggest challenge for us is not the metros, it is the expansion into small towns and rural markets, that is, the future rural market. We have already taken the first step in that direction and we will be releasing the less than Class I data from west and North markets in Jan 2013. This is where the biggest challenge is going to lie for us. Presently, we cover 162 cities with addition of less than class one towns, we will be crossing a whooping 225 to 230 towns. It means the fact that we are touching even towns with population of around ten thousand, which means you are talking about towns with just two thousand homes. So when you look at those kinds of towns, where it is so thinly populated, where every neighbor knows not only his neighbor, but the entire town! So there are security issues that you got to take care of and that is one of the biggest and toughest job that we have on our hand presently.

     

    So, managing security, connectivity and the inventory are the three biggest priorities that we have in terms of focus points. When I say security, it is the management of security at the ground level which means trying to ensure that the home remains confidential by primarily revolving homes continuously. By ensuring code of norms that each home follows in terms for the security.  Acting in whatever possible manner on MIS that we get from ground, from every town regularly. Connectivity is ensuring that the data that gets picked up by the meter gets transmitted to the head end because GPRS connections are not all that stable in all the markets. Ensuring alternate methods exist for data capturing if the real-time connectivity fails at the service provider end. And third, is continuously upgrading technology and managing the inventory of different technologies, that is, technology working in analogue vs technology working in digital homes. Given the power situation in individual markets, even the hardware that goes along the meters needs to be robust to allow for power flux of varying degrees and ensuring proper power supply to those meters continuously. Therefore to manage these inventories and ensuring that we have right equipment for the right place across 225 locations is becoming an uphill task. But with the right well trained team members and the passion to drive this process day-in and out existing within the team and a big support from our two parent companies – Nielsen and Kantar, we have been able to deliver to cater to the market’s expectations for the last 15 years.

     

    Have you started speaking to channels who will be coming on board…?

    Yes we are in continuous dialogue with many of them in this course of action and the changes that are expected in the market place. Many of them are seeing this point very clearly the enormity of challenges lying ahead of us in the measurement exercise.

     

    On the need for some amount of education for the channels on the impact of digitization…

    True there is a huge amount of education that we need to prioritize on. In fact we did some road shows with some clients on the impact of digitization on the channels and what it means from the viewer perspective that changes are expected. Therefore what they should be ready for, some of them are already done, some of them are in the process of being done and some of them will be addressed in the second phase of July – August.

     

    Do you anticipate any significant changes in the complexion of the data released post-digitization?

    Certain changes are expected to happen but at the end of the day, it depends on the extent to which the growth in digitization happens. We can at best be ready for the change. So far when we say that 35 per cent of homes in Mumbai have got digitized, it has happened over three years time and not over a single day. The subtle changes you see in viewer behaviour are hidden with a time lag that happened in that growth rate. Nevertheless when you look at it at a closer level, there are three or four clear directions that are emerging, which may have a much more profound impact if suddenly on a one single week or one single day the penetration shoots up from a 35 per cent penetration to 60 or 70 per cent digital penetration. From that perspective, the postponement of digitization to November 1 really helps if the continuity of growth in digitization happens like the way it has happened in the month of May and June. Because what it allows is the fact that the user to gets settled with the new equipment at home and therefore his behaviour changes not on a single day, but it settles down over a period of time.

     

    Like for example, the biggest change in going forward in a digital era is the way a viewer lands on a particular channel. Today, in the analogue world, the viewer lands onto the channel or a genre which is on prime band but tomorrow when he moves to digital, he will be choosing the channel / genre he wants to land on as a first channel. So that itself changes the complexion of the channel he will be landing and the channel he would like to watch. So what is going to happen is that there are certain set of genre that will actually diminish a little bit in reach terms but, will have a much more prolonged time spent because the viewer is wanting to be and stay with that particular genre once he enters into it in a compounded manner. So some of the genres like the GEC’s, kids, Movies are increasing in terms of their engagement level and therefore seeing growth level in a Digital home than the Analog home.  It also offers opportunities for genres to clearly market themselves much more strongly. For example, genres like News, Biz News, Sports, etc will see the growth from a very clearly targeted audience segment once they clearly identify that segment and start communicating to them in a stronger way about their available Content.

     

    The other advantage of digitization is the positioning of the channel within the genre. For example, sports has a distinctive advantage of being present in that particular channel no. for 24 hours and 365 days and not necessarily have to depend on cricket to drive viewership. So it will have the segmented audience for each sport on the same channel. For sports other than Cricket that the audience might have missed out in the earlier analog world where the genre could have got pushed to a hyper band or probably to oblivion once cricket gets over, the Digital world presents a fresh opportunity to them to connect back to audiences.

     

    In India we are not going to have too much of a price problem i.e. channels will not be priced very high but, that could also be one of the factors which could determine the choice of channels. True?

    True. Internationally price is a very key factor that plays a role in deciding to which tier of packages is the home going to subscribe to. In India at the initial stage of digitization, it will not be so significant wherein the ARPU’s may not go up dramatically. But with time consumers deciding to choose which packages they want depending upon the need of the family, the decision to look at pricing will be very closely linked to the kind of audience that each channel wants to market. So therefore you are bound to see price changes for genres like Sports, Kids, Movies and some GEC’s. While we may see probably some amount of price flux for genres overall, within genres itself we are going to see top three or top four channels which have high brand equity leading the above genre pack with higher price. This may not only happen on just GEC or Movies or Kids but, also on News or music or Regional stations where each one is going to look at how valuable the brand property is and depending on that give a pricing that may be more impactful than the remaining set of channels in that particular genre.

     

    You mentioned briefly about getting ready for other forms of viewing in terms of mobile phones. What is that stage of development because we see it happening already…

    From our perspective, we are looking at the measurement itself changing in the longer term. Presently we are led with platforms. That is, we measure TAM for television platform, we do RAM for radio platform etc. That’s today’s perspective, based on the way we look at each medium. But, when we look at it from the audience perspective, they are moving seamlessly across these medium and what they are absorbing is something to do with Video, Audio and Text. So for us therefore if we need to cut away from the platform-centric approach and look at it from a consumer perspective, we need to track consumer seamlessly across platforms. Our measurement is also looking at that in a way that we need to move into the future. So it means the fact that whether you watch Video on Television, or whether you watch the same Video content on a Tablet or Mobile phone device, it is only the devices which are different but, the content remains the same. Therefore it will be an accumulation of audiences across the three platforms that we will start to report one day. This means the fact that the viewing will be for the content with an amalgamation of the all platforms rather than today which is segregated as television separately or radio separately.

     

    For instance, from what Google and Indiatimes have reported, online viewership for IPL has been fairly good…

    What they reported is the reach number… the number of people who came in to watch the game per se which is equivalent to the reach terminology we use on TV or Radio. The engagement factor (Time Spent) was missing from their reporting or probably I might have missed it. From a data user perspective, the engagement factor reported on TV research is more important to understand the value of the Content broadcast.

     

    The other perspective of the data sets reported today is that we don’t know whether the online viewers who watched in the digital platform are the same audiences who watched it on television or not and what is the extent of duplication between these two platforms. So that’s where the magic lies in, that if we have the same software tracking all these devices,  we could actually be able to say what is the incremental addon by the digital platforms on to the television platform. So no longer are we chasing or measuring platforms but, we are actually measuring content – in the form of video, in form of audio and in the form of text. That’s the future of measurement coming up soon.

     

  • While there is optimism, the industry & planners are keenly awaiting how the music channel's switch to youth entertainment works in ratings & revenues

    Will switching to youth ent work for V?

     

    By Meghna Sharma

     

    Prem Kamath

    Launched 16 years ago as a music channel, Star India’s Channel V is now turning into a full-fledged youth entertainment channel. Starting July 1, V will stop airing music programmes in India and focus on fiction and non-fiction shows. The reason: “Over the last two years, there has been an explosion of ‘music only’ channels, but everyone’s playing identical playlists,” says Prem Kamath, executive vice-president and general manager at Channel V. “In order to grow as a channel and as a brand, it has always been critical to have an offering that is unique in our competitive space,” he adds on being quizzed on the decision.

     

    Many experts feel that it was bound to happen as more and more channels try to mould themselves to stay connected with what their target audience wants. But there many questions arise: could this mean the beginning of the end of music on TV? What is the future of music genre? Where is it headed?

     

    The beginning

    The scene for Indian music channels was set with the launch of MTV in the early 90s. Soon after, Channel V was launched in 1994, and since then there has been no looking back.

     

    The launch of these music channels also led to a boom in international as well as Indie pop culture. However, it was shortlived and Bollywood music took over, and the two channels, along with many other launched afterwards, started playing popular filmi songs. But over a period of time, these two channels moved beyond playing only music with shows like Roadies, Splitsvilla and Dare 2 Date.

     

    Hemant Kenkre

    According to music columnist Narendra Kusnur, somewhere down the line for these channels, music took a backseat: “I’m sure any channel would do thorough research while trying to change their gameplan. So, if a music channel shifting towards being a youth entertainment channel is proved beneficial – for viewership as well as revenue – then it wouldn’t harm them to take such a step.”

     

    He’s not alone in voicing this. Even Hemant Kenkre, a former music channel professional and a corporate and brand communications veteran, feels that channels are now branding themselves differently to reach out to their TG. He, however, does blame the availability of music on various platforms – radio, cellphones, laptops, iPods – as the reason for this shift. “Today, the youth is moving towards reality shows and they want it from the channels meant for them. As for music, they get their share of it from other mediums too.”

     

    Luke Kenny

    Former VJ, musician, actor and 9XO programming head Luke Kenny, on the other hand, feels that the channel (Channel V) decided to shift long back and has been moving slowly towards it, but there are still many who want music on television. “If music was dead on TV, then how would you explain other new music channels cropping up and doing well too?”

     

    He added: “Having said that, I do believe that with more channels showcasing Bollywood songs, music channels have lost their niche and have just became promotional channels. Therefore, if a channel decides to change colours, it might work. And you never know, Star India might come up with a new music channel called Music OK.”

     

    Industry talk

    If one takes a look at various channels, be it music or a GEC, they will find that, there is a great deal of music in some or the other. We have music trailers/songs aired across all channels. Award shows, too, have musical performances and talent shows like Saregama, Indian Idol, DID and even celeb dance show Jhalak Dikhla Jaa  are high on ratings.

     

    Mohit Joshi

    Therefore, according to media planners, the existence of specialised music channels is a difficult game. “Today, unfortunately for the masses in India, music equals to Bollywood. This is the challenge. This was not the case in the ’90s when there were a lot of private music albums that were launched -Silk Route et al, and the music channels were used for their amplification. So, there was something more than Bollywood, which is not the case today. In the current scenario, if music channels do not experiment with music or the content, then there is a fear that they will dilute their relevance over a period of time,” says Mohit Joshi, managing director, MPG India.

     

    Adds Carat Media India’s senior VP Himanka Das: “Channel V’s decision to discontinue music is a welcome change and would offer interesting opportunities to build engagement content with the youth, considering the very little content that is available to them in entertainment beyond music. Music as a genre gets 6-7 per cent share in the youth segment of viewers with Channel V contributing 24 per cent to this share amongst 20+ channels. Channel V vacating this space is someone else’s gain!”

     

    Punit Pandey

    Meanwhile, other music channels aren’t perturbed and are waiting to see how the channel is accepted in its new avatar. As per TAM (CS4+, All India market), there has been a consistent growth in the music genre. In 2007, the genre share of music channels was 2.02 per cent whereas in 2012 (till week 24) the share has grown to 3.62 per cent.

     

    Punit Pandey, senior VP and business head, 9X Media Group, agreed with Mr Das and added: “Music has, and will continue to, work on television. It is close to a Rs360-370 crore industry (in the HSM belt) and growing. More and more people are ‘watching’ music, so there is nothing to worry about for music channels at large.”

     

    Nikhil Gandhi

    Similarly, the view from UTV Bindass which started out as a Youth Entertainment Channel (YEC) and has been a pioneer in the segment is that though in the recent past music channels, especially MTV and Channel V, have started shifting focus from music to fictional and non-fictional shows, there is no reason for sleepless nights. “We have an advantage over other channels entering the YEC genre as we have already created a connect with the TG,” says Nikhil Gandhi, Disney UTV Executive Director – Youth Channels, Media Networks. And adds an alert: “So, I would like to tell other channels entering the YEC genre to work on their strategies well.”

     

    Apprehensive marketers?

    The change in positioning is due to the feeling that youngsters now have a strong spending power. And, hence, are targeted by various brands more than ever before. TV forms a core part of advertisement for these brands as youngsters also spend a lot of time in front of the television sets.

     

    Simeran Bhasin

    But what happens to youth brands if a channel changes its content strategy? According to the various marketing heads, the apprehensions will emerge if the channel isn’t clear about the shift and isn’t able to help a brand reach its TG.

     

    “If the TG of a brand matches that of the channel, it won’t matter if they decide to change over a period of time. However, if there is a shift in TG then a brand would think twice before advertising on that channel,” says Simeran Bhasin, head – Marketing and Retail, Fastrack.

     

     

    Harkirat Singh

    MTV’s latest show Sound Trippin was partnered by Woodland because the brand feels that youth oriented channels helps them reach their TG. However, the brand is clear that it get associated with channels or shows only if it feels there is a connect between the brand and the viewers. “Like any other brand, while media planning, the TG of a certain channel is important for us. We look for shows which are able to reach and connect with our TG. So, if a channel changes its content plan, we will want to go through their new strategy to figure out where do we figure and how it can benefit us,” says Harkirat Singh, MD, Woodland.

     

    Will the shift work?

    According to the industry professionals, the change in content plan by a channel is done after a lot of research and only time can decide if it will work in its favour or not. However, they believe that a channel should remain true to its philosophy because otherwise it will lose its identify as well.

     

    Samyak Chakrabarty

    Expanding on it, Samyak Chakrabarty, MD, Electronic Youth Media Group and Chief Youth Marketer, DDB Mudra Group believes that ‘youth’ is a very misunderstood word and youngsters cannot be defined in one category as all depends on the exposure and the background one comes from. “In their perception to become ‘youth’ channels, they are getting muddled up and don’t know where they are headed. Today, a youngster cannot associate MTV or Channel V with anything like they do for other brands. For instance, technology means iPad, connectivity means Blackberry etc. I think music channels should have remained with what they started as, instead of losing their identify to gain more TRPs. Such moves will only lead to their downfall, in the long term.”

     

    From being largely optimistic to one predicting a downfall, we received mixed reactions to the proposed change in Channel V’s identity. However, one thing is clear, no matter what Star India decides, there will be many who will wait to see what this mean for them and the genre, at large.

     

     

  • They say that TRPs should decide the ad rates of reality shows instead of the channels charging advertisers fixed rates even before the show goes live

    Advertisers crib as TRPs fall for Satyamev Jayate

    By Ratna Bhushan

     

    The truth isn’t quite triumphing – not at least in the way some advertisers on Aamir Khan’s hyped debut television reality show Satyamev Jayate thought it would. Television rating points (TRPs) have fallen short of expectations, say at least two marketing heads of associate sponsors, although publicly most advertisers are making the right noises. That, however, hasn’t stopped media buying firms, on behalf of advertisers, from pushing for result and performance-based ad rates on reality shows. They say that TRPs should decide the ad rates of reality shows instead of the channels charging advertisers fixed rates even before the show goes live.

     

    As per rating agency TAM’s data released by Star on June 13, Satyamev Jayate – which is being aired on Sunday mornings across nine channels of the Star Network (as well as on the state-owned Doordarshan) delivered a national TVR of 3.9. That’s lower than the ratings of blockbuster shows of the past like Kaun Banega Crorepati (Sony Entertainment) and Bigg Boss’ debut show (Colors).

     

    Navin Khemka, managing partner of media buying firm ZenithOptimedia, which represents consumer goods major Reckitt Benckiser, one of the associate sponsors of Satyamev Jayate said: “All the risk cannot be passed on to the advertiser. With high entry-level costs on reality shows, it is critical that channels take more accountability on the returns on investment.”

     

    Increasingly, agencies and clients will ask for certain minimum guarantees on programme performance and viewership, he added: “It has to be a win-win for both the brand and the show.”

     

    While Bharti Airtel coughed up a chunky Rs17-20 crore for the presenting sponsor slot, associate sponsors like Axis Bank, Reckitt Benckiser, Skoda, Coca-Cola and Johnson & Johnson paid Rs6-7 crore each for the 13-week show.

     

    Star has charged Rs8-10 lakh per 10 seconds for spot rates for Satyamev Jayate while spot rates for KBC were Rs 3.5-4 lakh per 10 seconds.

     

    According to the marketing head of an associate sponsor who did not wish to be quoted, returns on investment on the show could have been higher. “The way the show was sold to us, we expected higher ratings. It’s disappointing and we hope the ratings increase as the show progresses.”

     

    However, Bharat Bambawale, global brand director at Bharti Airtel, defended the investment: “To view the success of a show based only on television ratings would limit its overall value. The success of a show has to be looked at collectively and in a holistic way… the content of a show will impact ratings.” On whether broadcasters should rationalise ad rates on reality shows, Bambawale said: “It’s a matter of individual judgement for every sponsor.”

     

    Basabdutta Chowdhury, CEO of Platinum Media, a division of media buying firm Madison World, which buys media for Bharti Airtel, said: “Advertisers do want accountability and minimum guarantees factored in for reality shows in general, although Satyamev Jayate was not meant to be a mass ratings show.”

     

    On reality shows, deals are structured in a way that they cannot be re-negotiated through the entire program. This is unlike cricket where broadcasters keep at least some ad inventory – like the semi-finals and finals – open to negotiations based on the ratings.

     

    Ajit Varghese, MD, South Asia of Maxus, which is owned by the country’s largest media buying house Group M, said: “While there’s no standardised way of looking at a deal, we all are pushing for deals with a minimum guarantee. Of course, the arrangement should factor in an upside too, but overall ad deals should be linked to a programme’s performance.”

     

    Veteran ad man Santosh Desai is of the view that Satyamev Jayate needs to be evaluated not just by viewership but also for the impact it has. “It’s a difficult show to watch…. Some subjects don’t have a mass audience at all so to be watched week after week by masses will be a challenge.” KBC’s most recent season had opened to a rating of 5.24, and Bigg Boss Season 5 had opened to a TRP of 4.25. The Amitabh Bachchan-hosted KBC had managed ratings of over 4 all through its run.

     

    A Star India spokesperson says the show has delivered a reach of Rs40 crore over the first five episodes (including repeats). The launch episode delivered a TVR of 4.9 in Hindi-speaking markets and a 4.1 TVR all-India. Subsequently, all episodes have consistently delivered a 4+ rating in HSM and 3.5+ ratings at the all-India level.

     

    Kevin Vaz, Star India president, ad sales said: “Satyamev has ranked amongst the top few every week on an all-India level.”

     

     

    Source: The Economic Times

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

     

  • 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: Ratings & readerships must come with a Statutory Warning

    By Paritosh Joshi

     

    If you are reading this column with any professional interest, it is safe to assume you have done or been closely involved with one or more of the following things within the last year:

    • Sold media inventory
    • Bought media inventory
    • Planned a media schedule

     

    In any of these situations you would have to:

    • Define the target audience
    • Use widely used market research to assess and compare impact of the medium or media in consideration
    • Price the medium or media as a buyer or seller or assess its or their value for money for the advertiser’s planned media expenditure

     

    Inevitably, you would have to deal with television rating points, publication readerships, radio listenerships and the like. That’s where the fun begins.

     

    With the target audience.

     

    “Housewives SEC A and B, 5 lakh+ towns, UP,Bihar, Jharkhand”, one might say. “Men and Women, SEC A1, Top 6 metros” another might demand. Or even, “Women, SEC A1+, Mumbai and Delhi”. I have to add I am not inventing these, having heard them as specific asks or offers in situations I have been in close proximity to. To be sure, you could probably assign brands or media to all of them with not much effort. So far so good. It’s what happens next that makes no sense.

     

    Someone with access to the right research will actually produce numbers purportedly accurate to within a decimal point to size said target audience and the extent to which a medium or combination of media will reach it.

     

    This is bovine excrement, euphemistically speaking. Why, you ask?

     

    Because all media research is based on statistical sampling, not a person-by-person census of every reader, viewer or listener of show or medium. Statistical numbers are estimates. They work on the twin ideas that all large populations are distributed according to the Standard Normal Distribution, the good old Bell Curve that we are all familiar with. Put simply, the notion that in any large enough group, there are a few thin people, a few fat people and a lot of people of intermediate weight (thereby making you wonder what happened to all of us in the Media and Entertainment fraternity, or whether there’s also an ABnormal Distribution to explain it). And that if you were to draw an adequately large random sample from this normally distributed population, the sample would retain all the statistical characteristics of the population such as Mean and Standard Distribution.

     

    It can be shown that the minimum sample size required to ensure that the sample follows the behaviour of the parent population is 30. Samples of smaller size will exhibit asymmetries and other oddities of shape (things statisticians call measures of Skewness but never mind), that make them useless for drawing reasonable conclusions about their parent populations. As the sample available to extrapolate from becomes smaller, the error in extrapolation becomes larger, exponentially larger.

     

    Thereby bringing us back to the issue of ratings and readerships and such. Take readership and the Indian Readership Survey for a moment. About 67 per cent of India’s population of 1.2 billion, ~160 million households are represented by just over 2.5 lakh respondents. Put another way, every respondent represents nearly 1000 households. Things get even more interesting when you look at television metering.India’s 130 million (your guess is as good as mine on what the actual number is) are represented by ~8,000 meters.  Of course, TAM makes no claim to represent all India, so even if these 8,000 only represented the top 100 cities that have a 2011 population of 128 million or a population above the age of 4 of ~115 million people in over 20 million homes, there would still be only 1 meter in every 2,500 homes. We will get more generous and allow for the fact that TV penetration across the top 100 cities is 70 per cent. In other words out of 20 million total households, there are only 14 million TV homes. Even in this situation there is just 1 metered home in 2,000 TV owning homes.

     

    You see where this is going?

     

    As users slice and chop large aggregate populations and search for meaning in the samples that supposedly represent the segments thus generated, the available sample used to do the statistical prediction shrinks to a point where there is no predictive integrity within it. And yet, statistically naive people in every corner of our industry routinely use these frail foundations to build imposing edifices of brand and media transactions and planning.

     

    Then again, even the Taj Mahal is built on flimsy marshland that may eventually cause it to sink out of sight.

     

    So here’s the suggested Statutory Warning: “Irresponsible use of audience measurement may lead to impaired business diagnosis”.

     

    Paritosh Joshi was until recently CEO, Star CJ. He has been a marketer, a mediaperson and a key officebearer on industry bodies. He can reached via the comments board below or his Twitter handle @paritoshZero.

     

  • The economics for a franchise are simple. Every franchise incurs two kinds of costs, and both are essentially of a fixed nature: the licence fee and player costs

    Where the economics stand for 4 key stakeholders post IPL’s fifth season

    By Ravi Teja Sharma

     

    Beyond the brawls and the bustups, there was cricket. And business, which became steadier and better. As millions continued to watch the cricket, IPL 5 strengthened the league’s business credentials.

     

    Franchises

    Their costs are mostly fixed and they are squeezing more out of each revenue stream. In the humdrum of IPL3, the operative word was ‘valuation’. The then-IPL chief Lalit Modi proudly announced two new franchises, Kochi at $333 million and Pune at $370 million.

     

    In other words, Pune’s owner, the Sahara group, was paying 3.3 times the priciest original franchise (Mumbai, $112 million), setting a new benchmark for valuing a team.

     

    More insanity followed: Modi was dismissed by a tweet, Kochi imploded, and Sahara had second thoughts about its $370 million investment. Sanity returned in season five. “Initially, it was more about valuations, not viability,” said Venky Mysore, CEO of the Kolkata team. More than any other season, IPL 5 has been about viability.

     

    Not of the surviving kind, but of the thriving kind. “For the first time, most of the franchises will be financially better off,” said IPL commissioner Rajeev Shukla.

     

    “Many have become profitable after IPL 5.” Like Kolkata. “We reduced our combined losses by about 50 per cent in IPL 4,” said Mr Mysore. “This year was equally good or better than last year…we should wipe out the remaining losses.” Chennai and Delhi say they have been profitable since season three, and that this year was better.

     

    The economics for a franchise are simple. Every franchise incurs two kinds of costs, and both are essentially of a fixed nature: the licence fee and player costs.

     

    For a metro franchise, the licence fee is around Rs35 crore a year, while the player cost is Rs55 crore. Add sundry expenses, and a franchise is looking at total costs of Rs100-120 crore. On the revenue side, there are essentially three revenue streams.

     

    The biggest revenue contributor is the ‘central pool’. All the money the BCCI raises by selling broadcasting rights and sponsorship goes into a common pool. The BCCI keeps part of this and distributes the rest among teams.

     

    With the BCCI negotiating hard with the broadcaster and sponsors, each franchise’s share of the central pool has steadily increased-from Rs29 crore in season one to Rs40 crore in season four.

     

    “The central payout will increase to Rs 50-60 crore this year,” said Mr Shukla. The franchises have no control over the central pool. They do have control over the other two main revenue streams: ticket sales and sponsorships, from where the good franchises raised, on an average, Rs30 crore and Rs30-40 crore, respectively.

     

    In both these areas, IPL-V saw the franchises, with one eye on growth and another on the bottom line, pushing new levers. Teams say they increased ticket prices and reduced the number of passes, and consequently made more.

     

    “Gate collections in season five would have doubled compared to earlier years,” said Rakesh Singh, joint president, India Cements, the South-based cement company that owns the team, without giving specific numbers.

     

    Amrit Mathur, CEO of the Delhi team, too declined to share numbers, but described ticket sales as “phenomenal”. “We limited passes only to our contractual agreements,” he said. What teams did more was to reach out to the paying fan.

     

    Kolkata, for example, had 10 cars going around the city and doubling up as ticket counters. The team also did corporate sales to fill up the 80,000-seater Eden Gardens.

     

    For next year, it is looking to convert some of those seats into hospitality boxes, whose revenue potential is 20 per cent more. Teams earned more from sponsors too by selling advertising on 10 designated spots on a player’s uniform.

     

    “We expect it (sponsorship revenues) to be 50-75 per cent higher than year one,” said Mr Mathur. Chennai’s strategy was to cut back on sponsors. “We wanted to clear the clutter and charge more instead,” said Mr Singh of the Chennai team, whose sponsors include Aircel, Gulf, LifeOK, Amrapali and Usha.

     

    Some other nascent revenue streams are gaining ground, like merchandising. “About 10-12 per cent of our revenues this year came from licensing and merchandising,” said Colonel Arvinder Singh, COO of the Punjab team. And the Delhi Daredevils is looking to lend its name to sports bars, the first of which has come up at the Delhi airport.

     

    For teams owned by corporates, in addition to a tangible payback, there’s also an intangible one for the main business. For example, all the branding on the Bangalore players is from the liquor and airline brands owned by team owner Vijay Mallya.

     

    “That has been our main priority,” said Russell Adams, vice president-commercial operations for the Bangalore team. Similarly, India Cements has used IPL to drive into markets other than the South.

     

    Besides the visibility from player jerseys, it has been wooing cement traders in cities in Gujarat, Madhya Pradesh and Rajasthan with a package of an IPL match in Chennai and a pilgrimage to Tirupati.

     

    “This was a masterstroke for us: to enter a market dominated by biggies like Ultratech,” said Mr Singh. It all contributed towards viability-of the long-term kind. And valuations, today, stand forgotten.

     

    Broadcaster

    Viewership addition tapered, but it’s still a critical mass watching. There’s pressure on two of the numbers that matter for SET Max. According to TAM, which tracks TV viewership, the number of people who tuned into IPL grew just 0.4 per cent this year, against 12.9-19.8 per cent in the previous ones. And they watched less.

     

    If they saw 4.5 per cent of all the minutes they could have in the first three years, they saw 3.5 per cent in 2012, the same as in 2011. Or, a TVR (television viewership rating) of 3.5 per cent. That said, even a TVR of 3.5 per cent is top draw, more so if it comes with a reach of 162.9 million.

     

    “No programme will give the pan-India reach that IPL does for two months,” said Nandini Dias, COO of media-buying house Lodestar Universal. It is why, she added, SET Max commands a 60-70 per cent premium in pricing over another programme with an identical TVR.

     

    This year, SET Max charged Rs5 lakh per 10 seconds, the same as in 2011 and 150 per cent more than in 2008. “Ratings fell, but we did not drop our price,” said Rohit Gupta, president of Multi Screen Media, which runs SET Max. Mr Gupta declined to disclose revenues, though he admits it is “lower than 2011”.

     

    A senior official from the channel, not wanting to be named, said revenues from IPL-IV crossed Rs1,000 crore, against Rs800 crore in IPL 3and Rs260 crore in IPL 1. SET Max’s original deal, struck in 2008, was for $1.02 billion (about Rs 4,000 crore) for 10 years.

     

    This was revised in 2009 to $1.64 billion (Rs 6,560 crore) for nine years. When the number of matches increased from 60 to 74, in 2010, this number increased further, said Mr Gupta, on a “pro-rata basis”. Back-of-the-envelope calculations show the current deal would be for about Rs 8,000 crore and that SET Max needs an average of Rs 1,050 crore a year over the remaining five years to break even.

     

    “IPL has become a brand that is big enough to sustain for many more years,” said Piyush Pandey, executive chairman of Ogilvy & Mather India. Added Ms Dias: “If IPL remains in the top five programmes through the coming year, it could still command its 60-70 per cent premium.”

     

    The other broadcaster, Times Internet, which owns the rights for international broadcast, Internet, mobile and valueadded services, and radio, expects to break even this year. According to CEO Rishi Khiani, Times Internet is paying Rs 67 crore a year to BCCI.

     

    It reached 26 million viewers this year-an increase of 55 per cent over 2011. “If you sell it right, there is an opportunity,” said Mr Khiani.

     

    Sponsors

    They got their bang, in different ways. For more, they will likely have to pay higher. IPL’s main sponsors only have good things to say about their pricey tie up. The established talk about reaching a wider audience.

     

    “We were well-known in the north, but now have spread awareness in other parts as well,” said Rajeev Talwar, group ED at DLF, which paid Rs 40 crore a year for the title sponsorship. The fledgling talk about IPL as the main piece of their brand strategy.

     

    Karbonn Mobiles started in 2009 and tied up with IPL in 2010. Sashin Devsare, ED, said IPL put Karbonn “in the consideration set of a mobile buyer.” Likewise, Volkswagen, which came to India in 2007.

     

    “We needed to raise brand awareness,” said Lutz Kothe, head of marketing and PR, Volkswagen Passenger Cars. “All these sponsors would have got five times worth exposure for every rupee spent,” said Hiren Pandit, managing partner with media-buying agency Group M.

     

    “But over a period of time, that exposure becomes a blind spot if there is no other engagement.” For example, Vodafone used ad campaigns to push specific business ideas: ‘happy to help’ in 2008, the Zoozoos in 2009 and 2010, 3G in 2011, and Internet services this year.

     

    In contrast, DLF was content being the title sponsor and having an on-ground presence. All sponsorship deals are due for renewal.

     

    “Most were done on an anticipated performance of the league,” said Basabdutta Chowdhury, CEO of Platinum Media, a unit of Madison World. “Now that it has a proven record, BCCI would be looking at higher value.” The season of BCCI hardball is beginning.

     

    Promoter

    BCCI’s golden goose is IPL and it is making it work overtime. Just how important the IPL is to the entity that runs cricket in India can be gauged from one statistic. In 2010-11, the IPL accounted for 48 per cent of the revenues of the Board of Control for Cricket in India (BCCI).

     

    Add revenues from the Champions League Twenty20, which owes its existence to the IPL, the figure shoots up to 60 per cent. IPL is BCCI’s golden goose, and the board is making it lay as many eggs as it can.

     

    This means birthing new revenues streams by adding more dates to a packed cricketing calendar or earning more from existing streams by negotiating hard with those who want a piece of the IPL. Both have yielded smart financial payoffs for the BCCI.

     

    Thus, in 2009, was born the Champions League, which essentially gives the BCCI and the top four IPL finishers a revenue kicker. The same year, BCCI renegotiated the TV deal with Set MAX and squeezed out 78 per cent more.

     

    In 2011, it added two teams to the IPL (one has since folded) at a valuation that was about thrice the maximum from the initial lot in 2008. Overall, the number of matches increased, which translated to higher TV and sponsorship revenues.

     

    The BCCI earned more. So did the franchisees, as the BCCI shares some part of its broadcast and sponsorship revenues with them. BCCI’s ‘surplus’-the equivalent of a corporate net profit-has increased from Rs 11.6 crore in 2008 to Rs 118.8 crore in 2010.

     

    Numbers for the last two years are not available, though the BCCI had forecast a surplus of Rs 209.9 crore for season four.

     

    “BCCI revenues have gone up,” is all that Rajeev Shukla, commissioner of IPL and vice-president of BCCI, is willing to disclose. Revenues could increase further as all sponsorship deals are due for renewal now. And even as it says it will address scheduling concerns, the BCCI has allowed all franchisees to play three T20 matches with teams from tier-II cricketing nations like Canada, the US, Netherlands and Ireland.

     

    “This will spread awareness about IPL and improve the league’s reach next season,” said Mr Shukla. And also improve the BCCI’s financial health.

     

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

     

  • While TAM has announced an increase of around 2000 Peoplemeter boxes, some broadcasters and media planners wonder whether just a 2000 increase will be enough to measure the viewing habits of a billion-plus Indians

    TAM to cross 10,000 Peoplemeter mark soon

    By Meghna Sharma

     

    In a country like India with numerous channels on air and where television watching is an obsession, it is vital for broadcasters and advertisers to know how well the channels and the various programmes on them fare. TAM, a joint venture between AC Nielson Research Services (Nielsen Company) & Kantar Market Research, was mandated by the broadcast and advertising industry to do exactly that. Over the last decade-and-a-half, TAM has been optimizing coverage of the growing TV audience across the country by increasing breadth (expanding to cover larger number of new markets) and depth (enable deeper level of analysis in existing data markets).

     

    By the year end, the TAM Media Research plans to increase its sample size by nearly 2000 households. The present expansion is in alignment with the above thought process and is an attempt to bring insights on audience engagement with TV Content. “The current Indian broadcast landscape is dotted with some very different and complex influencing factors like the need to dive deep into untapped semi-urban/rural markets and the upcoming mandate of digitization,” says LV Krishnan, CEO, TAM Media Research.

     

    He adds, “With digitization, we are already seeing increase in not only the channels entering the distribution pipe but also audiences trailing more content across newer genre of channels. As the long tail of unique content channels explode in 100% digital markets (Phase I being the Metros), TAM will be enhancing the sample size in these digital markets (Metros) to throw more light into audience consumption of these unique content channels. This enhancement will benefit micro targeting of viewer groups for not only broadcasters with their content but also advertisers interested in specific audience groups for their brand communication.”

     

    Keeping this in mind, TAM will be taking a few steps. The first initiative being taken is to increase the panel size in Mumbai, Delhi, Kolkata, Chennai, Bengaluru and Hyderabad totalling 650 homes. This will increase the SEC AB sample size in these metros by around 60%. All additional 650 homes will be recruited among C&S SEC AB homes.

     

    But that’s not all. As part of the initiative, TAM will expand in the less than class I India markets too. In the annual January 2012 establish report, the fastest growth for digital TV platform continued to be from less than Class I towns (with population of less than one lakh) and semi-rural markets in the Hindi belt markets. “This affirmed our hunch of the need to beef up representation in the semi-rural markets. Since 2009, we have been covering Maharashtra in the ‘Less than Class I’ geographic stratum. To this stratum, we are now adding seven more states: Gujarat, Madhya Pradesh, Punjab, Haryana, Himachal Pradesh, Rajasthan and UP. These will be reported as individual states except for Punjab, Haryana, Himachal Pradesh which will, as usual, be reported together as PHCHP,” adds Mr Krishnan. The increasing the sampling across these five new markets will be 1110.

     

    With this expansion, TAM will practically complete covering the entire urban stratum for the Hindi Speaking Market group. This also means that TAM will now cross the 10,000 Peoplemeter deployment mark and will be add 63 more towns to the existing base number of (162) sample towns with this expansion. Now, it will cover 225 towns.

     

    However, there are some who feel that an increase of a sample size of 2000 is not enough. “From the current sample size of around 8000, an increase of around 2000 more does brings up the number, but considering the size of the country it’s not an ideal number to know the ‘correct’ pulse of the viewers,” feels Anamika Mehta, COO, Lodestar UM.

     

    Agreeing with her, Tarun Katial, CEO, Reliance Broadcast Network Ltd., adds, “With the current sample size, it is very difficult to map the evolving choice of consumers. And right now TAM does not represent the digitalized packages. Therefore, until and unless it is done universally it won’t be able to ‘help’ like it should be. I would want TAM to look at their international counterparts to learn from them how they tackle the issues.”

     

    Even Sunil Lulla, MD and CEO at Times Television Network believes it’s high time that TAM woke up and smelled the coffee. “We are delighted that finally the industry pressure has worked. Many broadcasters, including us, have been telling TAM about various issues which affect our rating process. So, we hope that this increase in sample size, though small but relevant, will benefit and mark a beginning of improvement and swift growth of the system.”

     

    There are many who feel that the move by the TV audience measuring firm should be welcomed and shouldn’t be criticized. “We should understand what a tedious process it is. And over the years, TAM has been working to help the industry. TAM has been working with the over 8000 sample size for years now, so we should give them credit for increasing it. This move will not only increase the household numbers but also increase the cities which will make the sample more robust,” points out Anilkumar Sathiraju, Mudra Max Media, Head – South. As proposed, TAM has started preparing to implement both the initiatives in the full swing. Both the data cuts are targeted to be made available starting January 2013.

     

    Mr Sathiraju adds, “However, there is no denying the fact that over 10,000 sample size for a country with over one billion population isn’t correct. And I hope and wish that this will lead to a quicker growth in the next level of the phase. It is a challenge and hopefully won’t take years.”

     

    Mr Krishnan is of the view that the measures initiated will benefit broadcast. “Over the last three years, in our annual baseline (Establishment) study we conduct and release in Week 1 of January, we are witnessing a tremendous growth of Cable & Satellite TV and Digital TV platform penetration. This growth is fuelled by the growing aspiration to engage in multiple Content – Entertainment & Information, that these platforms are providing on a simple TV screen. In the Jan 2012 report, the fastest growth for Digital TV platform has come from less than Class I towns (with population of less than 100,000) and Semi Rural markets in the Hindi belt markets. Once access and engagement with multiple content happens, it is pertinent to measure the behaviour to help broadcasters, in particular, the regional language broadcasters for aligning content to these audiences. It also satisfies advertisers and nedia agencies needs as their need to target brand communications to consumers in these markets become a reality. Also, these new markets from TAM will give you a closer picture to the Rural India’s TV consumption habits in the Hindi heartland.”

     

    Meanwhile, with the imminent digitization in the four Metros, Mr Krishnan explains that in a market in Mumbai and  Delhi, with already 25% of the TAM panel and market digitized, his team and he are seeing new patterns of viewing settling in. “More viewers are glued to genres of their choice and landing straight on their favourite stations. Time spent with TV and within specific genres are increasing too. This will mean that there is enough scope for more channels to either get launched within the existing genres or new genres with Unique Content will launched soon in the new 100% digital era (given that creating access to the Content will be easy!). Tier packages will get formed and purchased by the potential viewers, thus sub-segmenting the audiences into more fractions! To capture these new behaviour trends, TAM is increasing the metro samples by almost 60% and in markets like Mumbai and Delhi, TAM is almost doubling the sample!! This will help broadcasters and bdvertisers to not only understand audience content consumption patterns but also target their programming and brand communications very well.”

     

    So what next? The preparation to implement both the initiatives is in “full swing”. Both data cuts will be made available starting January 2013.Also, with an eye to aid the understanding of the digitization progress, TAM has initiated The TAM DASES (DAS Estimation Study) : A study focused on the Phase 1 markets (as notified by the I&B Ministry for DAS implementation). Wait for it!

     

  • The much-loved character has leapfrogged from being a mega-hit on Pogo to merchandising and the big screen

    The not-so-chhota success of Chhota Bheem

     

    By Tuhina Anand

     

    Chhota Bheem, the nine-year old boy and his small group of friends – Raju, Chutki and Jaggu (the talking monkey), have been having a dream run on Pogo. Launched in 2008 on the channel, the character of Chhota Bheem has gone on to become immensely popular and we have seen the character move to the bigger screen with Chhota Bheem movie and there is no dearth of merchandise based on his character, including comic book, tee-shirt, fun puzzles, bags, bean bag, toys and more.

     

    Krishna Desai

    Talking about the popularity of the show, Krishna Desai, Director Content, Turner International India Pvt. Ltd, said: “Since its launch in 2008 on Pogo, Chhota Bheem became an overnight success. Today, Chhota Bheem holds several titles to its credit including being ‘Kids’ Favourite TV Character’ (Ormax Media 2011 Report). In addition to other popular shows like Mr Bean and Kumbh Karan, Chhota Bheem has helped Pogo sustain its No 1 since 2011. In fact, this year, the premieres of ‘Chhota Bheem: Dholakpur to Kathmandu’ movie in March and ‘Chhota Bheem aur Hanuman’ movie in May, were the number 1 programs across all channels.” (Source: TAM, All India , 4-14 yrs, 12:00-13:30, March 25 and May 1, 2012)

     

    However, TAM data for the period of April 15-May 12 (CS 4-14 yrs, all India market, excluding feature films shown on kiddie channels) shows that for the channel share, one sees a fluctuation between Pogo and Disney for the top slot where in week 18, Pogo has a share of 25.5 as opposed to 20.4 of Disney. In week 19, Pogo is at 21.2 while Disney has jumped to 24.6.

     

    Giving his take on the popularity of Chhota Bheem and Doraemon, Karthik Lakshminarayan, COO, Crest (Madison Media), said: “Be it Chhota Bheem or Doraemon, both are exceedingly popular in the kids genre. Even for the top slot there is a tussle between both the shows. The popularity works well for the advertisers as well as the channel. However, if one were to look at superior production quality then Chhota Bheem scores over Doraemon as the latter seems dated.”

     

    While Doraemon might seem dated, there is no lacking in its popularity. The show runs on Disney as well as Hungama almost round the clock. Same is the case with Pogo, where Chhota Bheem and its repeats are shown numerous times during the day. Mr Desai, talking about this strategy said: “Normally, most shows face the issue of fatigue over a period of time. But in the cases of popular shows like Chhota Bheem, this factor is not applicable. When any show is launched there is a novelty factor which draws in new audiences. Thereafter, the true test of success begins. If kids like the show, they will tune in to watch their favourite episode over and over again. Over a period of time, kids tune-in to pre-empt the dialogues or even sing along with the theme song, making them feel like a part of the toon world. Also, the non-sequential flow of episodes helps to steer clear of boredom.”

     

    “Being a pioneer in the kids’ genre, we have done in-depth studies analysing the viewing patterns of kids between the ages of 4-14 years so as to effectively target our core TG. Basis these studies we decide the schedule for our channels. The second factor taken into consideration is to ensure that the scheduling of both our channels (Cartoon Network and Pogo) complement each other and don’t eat into each others share. We also consider the competition and other TV genres scheduling while lining up our shows,” he added.

     

    Some of the other popular shows on Kids channel include Kumbh Karan on Pogo, Roll No 21 on Cartoon Network, the Suite Life of Karan and Kabir on Disney, Art Attack again on Disney, Ninja Hattori on Nick, Oggy and the Cockroaches on Nick, Mr Bean the Animated Series on Pogo and Tom and Jerry Show on Cartoon Network.

     

    However, the success of Bheem lies in the fact that it’s an indigenous animated series created by Green Gold Animation Pvt. Ltd, based in Hyderabad. As Mr Desai of Pogo pointed that what stands out about the series is the strong story and characters. Although it is based in the mythical and timeless village of ‘Dholakpur’, the characters are very relevant to the mannerisms of kids today. Thus, kids relate to the characters and aspire to be like them be it a superhero or a best friend. “Yes, we did anticipate the show to do well but we all have been happily surprised at how phenomenally well it is doing,” said Mr Desai.

     

    With the success of Chhota Bheem, came its movies that Pogo co-produced, the recent one being Chhota Bheem and the curse of Damyaan which was released last Friday.

     

    Source: TAM Media Research, TG: CS 4-14 yrs, Market: All India, Period: Week 16 to 19 (Apr 15 to May 12), 2012 *Note : The analysis excludes Feature films aired on Kids channels

     

    Some of these movies were aired in 2011 on Pogo and the channel has a more aggressive strategy for them in 2012, wherein they will showcase one new movie every alternate month. In March, Pogo aired ‘Chhota Bheem: Dholakpur to Kathmandu’ and in May premiered ‘Chhota Bheem aur Hanuman’.

     

    Also seeing the popularity of other supporting characters in the show, like Bheem’s best friend Raju, Pogo  create a successful spin-off movie on him called ‘Mighty Raju’ in 2011. Sequels to Mighty Raju will also be seen in 2012. Its online success can be gauged from the fact that on www.pogo.tv, there are 700+ games on the site out of which Chhota Bheem enjoys a majority.

     

  • With just 44 days to go for the Big Switch in 4 metros, Ashish Pherwani & Devendra Parulekar of Ernst & Young address the key business questions

    So will Digitization mean more Revenues?

     

    By Ashish Pherwani & Devendra Parulekar

     

    It is estimated that India has 127 million C&S television homes, out of which around 32 million are DTH, 7 million digital cable and the balance 88 million analogue cable homes.  The first phase of digitization of analog TV broadcast, which covers the four metro cities – Delhi, Mumbai, Kolkata and Chennai – is mandated to be completed by June 2012, while the entire country is to be digitized by December 31, 2014 when analogue signals will be finally switched off completely.

     

    It is expected that the industry will need to invest around Rs75 billion in the process, and Phase I alone will need around Rs11 billion. This is based on the assumption that the cost of digitization per subscriber will be Rs1,500, out of which around Rs600 will be borne by the customer.

     

    The following present some of the key aspects of digitization:

     

    How does digital cable compare with DTH, the current digital distribution leader?

    Digital cable has the capacity to carry 1,000 Standard Definition (SD) channels and surpasses DTH, which can only carry 250-300 SD channels at present due to limited transponder availability. In terms of technology, digital cable is capable of having a “return path”, which is not possible in the case of DTH. This limits the latter’s scope to provide value-added services and dual play. Digital cable is able to provide a larger number of regional channels, and given the growth of the Indian media sector – fueled largely by regional content – this could be a significant advantage for it.

     

    However, in terms of customer connect, management capabilities and readiness, DTH players have a definite advantage, since while they have had B2C from the beginning, most Indian MSOs still have B2B. DTH players already have in place customer-centric systems and processes, including multi-lingual call centres and field engineer forces.  They understand the implications of running a B2C business, having already implemented subscriber management systems, customer relationship management systems, and so on.  Moreover, DTH players have already invested heavily on building their brands, using ambassadors such as Saif Ali Khan, Aamir Khan, Shah Rukh Khan and Abhishek Bacchan, thereby making DTH an aspirationally more desirable product.

     

    Due to the factors mentioned above, it is expected that there will be a churn of subscribers from cable operators to DTH, particularly in Phase I. While certain MSOs peg this churn at 15 per cent in favour of DTH, DTH players are more optimistic and expect to gain up to 40 per cent of MSOs’ customers. This churn will, however, largely depend up the readiness of MSOs to meet digitization deadlines and also take advantage of the marketing and sales efforts of MSO and DTH players.

     

    Another factor that needs to be considered is Headend in the Sky (HITS).  HITS operators may find it advantageous to assimilate smaller LCOs by becoming their technology service providers and providing them with content as well as SMS, CRM and billing services.  However, this could pose issues for MSOs, who are counting on aligning themselves with such LCOs.

     

    Evolution of the distribution system

    The distribution system comprises four key segments:

    • DTH companies
    • Large national multi-service operators (MSOs) – 5-6 players
    • Small MSOs with a regional presence – around 25 players
    • Small LCOs (local cable operators) – around 40,000 players

     

    Currently, national MSOs have interests in several smaller MSOs and LCOs. This is either in the form of investments or JV agreements.

     

    Going forward, the distribution system is expected to evolve, based on the ability of small players to scale up their operations. Today, the main role of an MSO is to buy content from broadcasters, decrypt it and distribute it to LCOs for last-mile distribution to customers. All customer-facing operations are performed by LCOs, which include billing, collection, repairs and maintenance.

     

    Once digital addressable systems are set up, some of the smaller MSOs or more competent LCOs may decide to provide all services to customers themselves. In this event, they may break away from their parent MSOs, and assisted by funding and systems setups, be in a position to manage their customer bases on their own, and thereby gain a large share of the total subscription revenue generated.

     

    Therefore, we expect that broadcasters may not only be dealing with the big 5 MSOs, but the big 50 MSOs as well in a short time, which would be a definite advantage for them.

    The depth of relationships of MSOs with their JV partners and the LCO community will be critical for a successful national roll-out.  It will determine which and how many LCOs team up with each MSO, as well as the share of revenue an MSO can expect to receive from LCOs.

     

    The entry of pure-play global cable operators such as Liberty and Comcast could result in consolidation of the industry.  The proposed change in FDI limits for all cable distribution to 74 per cent, and the sheer size of the Indian TV market, is sure to interest such global players. PE players have shown a significant interest as well, but appear to have taken a watch-and-wait approach to determine how phase I of the digitization process plays out before deciding on whom and how much they will fund.

     

    How will ARPUs move?

    Given the past as a benchmark, one likely scenario is that the base pack of free to air (FTA) channels is priced at around Rs100 plus taxes.  Earlier indications from TRAI indicated a rate of around Rs83 plus taxes, but given that several channels are expected to opt for FTA in the digital arena, this will probably increase.  The cost of this base pack is, therefore, expected to increase at an inflationary rate of around 8per cent every year.

     

    High growth rates of 10-15per cent are likely to be seen in tier 1 and tier 2 packages, which will comprise most of the popular pay channels, e.g., the GEC and sports channels, and be priced between Rs150 and Rs250 plus taxes.  Premium packages, priced at Rs300-500, and including packages that have a large number of niche and HD channels, will probably grow at 15-20per cent per annum.

     

    Compared to the current ARPU of Rs140 per subscriber, we expect that within two years, the average family cost per TV set will increase to Rs250, inclusive of taxes.  The important factor to note is that households with two or more TV sets (according to estimates as high as 20per cent or more in the four metros) are likely to opt for addressable digital systems, and thereby, increase the size of the industry significantly.

     

    Application of a price cap, either at per channel level or a package level, could prove detrimental to the roll-out of digitization.  The equilibrium brought about by market forces would ensure optimal price points from a customer perspective.

     

    The tax impact could be significant as well.  The so far largely untaxed 88 million analog subscribers will now be subject to taxation, and this is likely to result in an increased cost of Rs25-45 per subscriber per month.  In all probability, this cost (around Rs4,000 crore a year) will be transferred to customers by the industry, and therefore, ability to increase ARPUs may be impacted in the short term.  Therefore, the efficiency of the value chain will be critical in determining the actual incidence of taxes levied on LCOs, MSOs and broadcasters.  The cost incurred to digitize networks also needs to be considered in terms of a one-time write-off or by spreading its impact over several years.

     

    How will ARPUs be shared?

    Honestly, we don’t know.  Today, many LCOs retain up to 85per cent of the revenues they collect from their end customers due to under-declarations made by subscribers, and the balance is split between MSOs and broadcasters in a ratio of 1:2.

     

    Different MSOs are proposing different splits.  Some envisage an equal split between the broadcaster, MSO and LCOs.  Some expect LCOs to retain 50 per cent of the collection, even two or three years down the line (given that it would be difficult for them to give up their revenue share).  According to a recent news article, TRAI is considering a regulation whereby LCOs will retain 70 per cent of the collections.  Some sources indicated that MSOs may guarantee revenues for certain LCOs at their current take-home levels for a year or two.

     

    Eventually, once addressability sets in, the share of revenues is expected to be driven by services provided to the customer.  Broadcasters will get a share for the content they provide; MSOs for their buying efficiency and the technology support they provide;  LCOs a share that is proportionate to the last- mile and customer-facing activities they provide.  If we compare this to the telecom sector, 60-70 per cent of the revenues are retained by telcom, as compared to 90 per cent by MSOs and LCOs.  This percentage needs to come down to global levels, where less than 50 per cent is the share of the distributors.  But this will take time.

     

    How carriage fees are likely to move

    Every business has a cost of distribution, and media is no different.  The cost of carriage will remain, one way or the other, whether as a per subscriber technology, a provisioning cost, a fee to place a channel in a package or as one to position a channel within a genre.

     

    There is likely to be some reduction in carriage fees, since digitization will result in eradication of the artificial scarcity caused by the analogue infrastructure.  However, in the long term, carriage fees are expected to continue in one form or the other .

     

    In all probability, strong channels (and those that are included in much-demanded broadcaster bouquets) will end up paying a reduced carriage fee, and weaker ones will pay a higher amount.

     

    The role of TAM

    TAM is expected to continue being the leading provider of viewership measurement services inIndia, since no method or technology is currently planned in any large-scale STB implementation program or any other system to find out which person in a household is watching which part of which program.  It may be possible to determine how many subscribers have subscribed to a channel by aggregating data from leading MSOs, but that is not a measure of actual viewership.

     

    Alternative business models

    Broadcasters and distributors can now think about implementing channels by using innovative methods to share risks and rewards.  Some such methods could be:

    • Broadcasters selling channels to distributors to exploit these in the form of ad sales and subscription revenues
    • Re-packaging existing channels for local audiences of MSOs and larger LCOs
    • Creating channels based on dubbed content from popular channels, to be rolled out as regional language channels across larger MSOs
    • Broadcasters, etc., distributing specially packaged film or music channels on a revenue-sharing basis

     

    The recent recommendation made by TRAI to limit the total advertising time on pay channels to 6 minutes per hour and FTA channels to 12 minutes per hour could also have a significant impact on the number of channels that continue to “go pay,” should such recommendations become the law.  Such a rule would boost transparency in TV distribution, and given that advertisers would not be willing to pay twice for the same audience reach, would also push up per-channel prices significantly.

     

    Moreover, in addition to regular revenue streams, new ones would emerge for MSOs.  For example, Hathway has demonstrated that it can generate 10-15 per cent of its revenues through broadband, and this could become a service other operators can also begin providing. Video on demand, gaming and niche content could also be provided at local levels.

     

    In summary, although the timeline for digitization is aggressive, the ordinance is a concrete step toward enabling systematic growth in the industry and more equitable distribution of revenue across the distribution value chain. All stakeholders are expected to benefit from the digitization process – transparency generally ensures this. It is, therefore, in the best interest of the industry that all stakeholders ensure that this initiative is implemented in as speedy a manner as possible, and make sure that no political, regulatory or any other road-blocks interfere in the process.

     

    Ashish Pherwani is Associate Director, Ernst & Young & Devendra Parulekar is Partner, Ernst & Young