TV.NXT 2012: Life after digitisation

As the Indian television industry stands at the cusp of the soon-to-happen digitisation, there is a growing interest within the trade as to how the Indian audiences would react once the change begins to take shape. And this is what L V Krishnan, CEO, TAM India, chose to answer on the second day of TV.NXT, an annual conference organised by afaqs!.

For a consumer mandated exercise, the use is led by the choice of a consumer who willingly wishes to move toward digital convergence. Herein, the consumption is content-led; it is platform-agnostic and hence, the consumer is ready to pay for appropriate platform to access 'right' content. In this case, there is willingness to pay the 'right' cost for the 'right' content.

The government-mandated exercise, on the other hand, is led by the desire to build uniformity in basic infrastructure and bring parity to evolution of all society segments via up-gradation. Therefore, herein the consumption is distribution-led; it is platform-centric and the basic tier value offerings are led by free-to-air content.

Krishnan said, "Consumer-mandated digitisation helps in a big way. It is more content-led rather than platform-led. Therefore, it becomes easier to create pay for the right kind of content that the consumer is deciding to watch and this willingness to pay leads to higher subscription value."

He added, "Now, the government-mandated digitisation process is leading to a situation where the basic tier is going to be the most common denominator for the digital homes. This is because in the government-mandated exercise, there are a few consumers who even understand tier packages and therefore, the value that needs to be paid for that particular channel or content!"

Hence, as the huge shift from analog to digital takes place with the government mandating exercise, there is going to be a sudden shift in the television viewing patterns, too, he noted.

To understand that viewing pattern, the TAM panel picked up homes that had been strong on analog for a very long time. As the homes finally moved into digital, the panel looked into the first four weeks of the viewing changes and then the behavioural changes that took place after those first four weeks.

The key learning that came out from these digital homes was that after the digital shift, while fragmentation moves upward for a certain specified time, the viewers later consolidate in terms of preferred set of channels.

The new viewing patterns also exhibit that while earlier the audiences walking into any genre started the journey through a GEC, today they showcase a pattern of direct landing onto the destination channel, thereby leading to lower reach for mass genre channels. "This will likely redefine channel genre neighbourhood placements in future," Krishnan noted.

Interestingly, according to Krishnan, direct landing into the destination channel leads to increased reach for sports, movies and kids genre channels.

The second observation he made was that "intra-genre consumption increases at the cost of inter-genre TV consumption."

He said, "This is very evident in digital homes with young kids, wherein the children are landing into their genre and surfing between content within the genre. Hence, while kids' genre consumption has increased, their lower surfing across other genres has dipped their consumption of other genres."

Also, the consumption on kids and movie genre increases at the expense of Hindi GECs. Meanwhile, migration within the GEC genre increases in digital.

The third observation that he made was that the era of individual's choice is getting re-defined. Sports viewing, which had dedicated consumption towards cricket, has dipped among digital TV viewers. The digital TV platform is creating accessibility 365 days x 24 hours for sports content, creating an increase in the genre consumption among avid individuals. Thus, finally, mature digital audiences are settling down to enjoy their favourite sports.

Moving ahead, he noted that with digitisation, TV viewing extends from primetime to other day-parts. While primetime TV viewing still continues to rule the roost, sheer accessibility to various genres of content on a digital platform allows specific target audiences to build up even in early morning and early evening day-parts, other than afternoon and prime time.

"This is bound to help free precious prime time ad inventory for brands that can't afford high cost to look at non-prime content to push their brand communications," he noted.

Next, he said that while until now, loyalty to content story and affinity to the character never resulted in yield for broadcasters, in the digital world, audience clusters will be defined by loyalties and affinity to their favourite shows and characters.

"The greater the loyalty and affinity, the potential of expecting the subscriber to payout for a channel subscription will definitely be higher," said Krishnan.

Overall, according to Krishnan, out of the 126 million (current) cable and satellite homes, 51 million has already become digital. This clearly indicates that even as the government-mandated digitisation is yet to take place, the Indian consumers are strongly adopting digital.

"There has been a 96 per cent growth in the digital television market, wherein rural contributes significantly to the digital environment. This intends to the fact that government mandated digitisation will propel faster growth," he opined.

He further added that when it comes to cable and digital television penetration in India, rural is at parity with urban. Markets like Assam, MP, Gujarat and Maharashtra have been showcasing positive acceptance in digitisation and have passed over 40 per cent penetration numbers. But there are markets that are lagging behind, such as Bengal, parts of Andhra Pradesh and the South market.

This was the third edition of TV.NXT, an afaqs! event presented by ABP News.