"Can we really say that the Indian television industry has entered a matured phase?" questioned media veteran Sameer Nair, CEO, NDTV Imagine. "I have been in this industry for 14 years, and it seems like it is in its teens. Maturity seems to be around the corner," he remarked.
Where reach is concerned, the industry definitely is statistics-rich: more than 400 channels, 90 million cable homes and 12 million digital homes. However, the same healthy growth is not visible in returns.
Nair explained that while the number of players and the costs were low in the past, the two have escalated in today's world. By costs, he meant the increased content and distribution costs. The industry is plagued by issues such as low average returns per user (ARPU), choked bandwidth, increased carriage costs, increase in content and talent costs, single measurement system, overdependence on advertising as a source of revenue and focus on volumes over value.
All these deterring factors have lead to an unreal one-size-fits-all content scenario, where supply exceeds demand. Nair believes that the meltdown will take the industry towards maturity, since there will be reduction in the availability of easy capital, leading to collaboration and reduced costs. "We need to work together towards a constructive consolidation in content and distribution," he said.
He also had some suggestions on how to do this. On the content front, he said there was a need to have stronger production costs, seasonal broadcast of content and monetization of niche and premium channels.
On the distribution front, segmentation in terms of mass and niche, development of new technology, and segregation between advertising and subscription supported services were required.
In his closing remarks, Nair said that fundamentally, the industry needs to call itself a content industry and not a television industry. "Maturity will come when we go beyond television, when consumers pay a fair price for the content and when segmentation and addressability make way," he said.
Zohra Chatterji, joint secretary, Ministry of Information and Broadcasting said that the industry had undoubtedly evolved. She evaluated the Indian television scenario with the help of the media development indicator used by the UNESCO, which had parameters such as plurality and diversity of media, system of regulation conducive to freedom of expression and sufficient infrastructural developments.
However, she was quick to point out the gaps that ought to be filled. She emphasized on the lack of an independent regulator of content for the TV industry, the overdependence of content on ratings, inadequate audience measurement system, lack of pay TV revenue, overdependence on advertising and lack of targeted digitalization.
She opined that regulation, whether on content or the business aspect, was sure to drive growth. "Incidence of taxes on DTH, FDI policies which will influence investment in the sector, a better rating system, and content regulation will encourage diversity," she said, lamenting that all the channels looked the same.
When the topic of undifferentiated content came up, Nair said that the reason was that a fair price wasn't being paid by the consumer for the premium content. He explained the scenario in the US, where the basic cable, which is supported by advertising, is available as free to air channels to the lowest common denominator. "Once they move up the value chain, other entertainment options, such as live sports and other premium entertainment is made available at a premium. They pay value for good content," he said. In contrast, in the Indian market, television content is available to consumers at a subsidized rate.
Tarun Katial, COO, Big FM, who also heads Reliance Entertainment's broadcast venture, observed that the basic rules of engagement were missing. "While we have matured by way of number of channels, we are fairly young in terms of engaging content," he stated.
He said that one of the reasons why engaging content is not created is because digitalization hasn't taken off in the country yet, and with the existing norms, there is no exclusivity to a particular DTH provider.
"Unlike in markets such as UK, which has 98 per cent digital penetration; in India, the same content plays on all DTH platforms. Because, here the legal norm is that the content has to be made available on all platforms," he said.
Another impediment in creating rich content, Nair said, was that the entire cost of content is borne by the broadcasters. "If a programme does not do well, the broadcaster suffers losses, while the producer does not incur any loss," he complained.
Both Katial and Nair believed that costs of production should be shared. "Put a premium on the idea," Katial asserted.
Commenting on the mushrooming of new channels, Chatterji said that perhaps the time had come to put a cap on it. "So many news channels exist and most of them are just concocting news. Should channels be auctioned off like in the FM sector?" she asked, leaving the panel and audience in suspense.