POV: Small Towns, Big Changes

Market share is at the heart of judging success in any product category. In a business where a higher market share translates directly into higher yields - and, therefore, greater profit - the measure is absolutely critical. What happens if the definition itself of 'market' in such a business is changed? Everything goes topsy turvy.

That's exactly what has happened to the TV business. TAM Media Research has changed the nature of the TV market, as it were, by including a whole bunch of towns with a population of less than one lakh (known as LC1 markets) across five regions. TAM did this after criticism that its sample did not truly represent Indian TV viewership.

The first results following the inclusion of small-town India are out. The TV hierarchy of winners has gone upside down because the viewing habits of Indians in these newly included towns are different from people in the larger towns and cities to which TAM people meters were limited until recently.

The hard information: TAM's sample representation has now moved up to 225 cities and towns with 9,602 people meters. The new towns of less than one lakh population are in Gujarat, Madhya Pradesh, Uttar Pradesh (including Uttaranchal), Rajasthan and PHCHP (Punjab, Haryana, Chandigarh, Himachal Pradesh).

afaqs! spoke to top executives to understand what the changes mean and how their businesses have been affected.

There are two aspects to the issue. The first one is of the need to decide how to look at viewership. The adding of new markets means that viewers who were not being covered earlier are being covered now. It is not as if we didn't have viewers in these markets earlier and are getting into a mad rush to lure them now. Depending on the player and the genre, each broadcaster would plan its distribution strategy on which markets to specifically target. So, it is up to the broadcaster to decide whether to use the introduction of these new markets to its advantage or not.

The second aspect relates to the more traditional viewership ratings. So if one has to look at that set of data of channel GRPs or show TRPs, then of course the challenge for the broadcasters is to have an equal appeal across markets - which generally and necessarily isn't the case every time. This would mean that TRPs, which is a percentage measure of viewership, can get skewed either way depending on the preference of a certain set of shows in a particular market - and, mind you, there could be many reasons for that. So, with the introduction of a significantly big universe, there is bound to be an impact on the overall viewership numbers across genres.

Distribution, that is, reach, is the biggest challenge in these markets. Since the towns are far-flung, they may not necessarily be served by the bigger MSOs or even LCOs. Reaching viewers, at the right broadcast frequencies, can be a challenge.

IPL (Indian Premier League) has been hit by low ratings in LC1 markets. The aberration is that, last year, these markets were not metered. So, the growth in the viewership is going bvgwithout consideration. Technically, the LC1 markets have a market weightage of about 20-22 per cent; these are the towns with population in the range of 0-50,000. The viewing habits in these cities are obviously different. These towns witness massive power cuts, especially the states UP, MP and Rajasthan. Summer months are worse.

As a consequence, overall, the cricket ratings are falling. The LC1 markets of UP contribute to about 7 per cent of the total market base, obviously because of the sheer size of the state and population. If one deletes the UP LC1 towns from the ratings map, the IPL first week ratings stand at 4.1 average TVRs (All India) and 4.5 TVRs (HSM). The average of the LC1 markets is 2.8 TVRs, while that of UP LC1 markets is 1.9 TVRs. One can see that the averages are being pulled down drastically by their inclusion. These are mostly the towns which focus on only 30-35 channels.

The only good part of the story is that the advertisers and the media planners understand this situation. Brands ultimately don't come to IPL to cater to the LC1 markets.

The viewing pattern in these towns is very different from that of the metros or bigger cities. You will notice that the average TV viewing time in India is 2 hours and 30-40 minutes a day, which is half that of the global standard of 5 hours. That's because India is deprived of 24-hour power supply. LC1 towns are the worst hit, ultimately bringing the viewership down.

As per the Chrome LC1 report, among towns with population between 10,000-1 lakh, the power cuts can be as high as 12-16 hours a day. This survey was conducted across UP, MP, Gujarat, Haryana, Maharashtra, Rajasthan, Punjab and Himachal Pradesh.

As far as the advertiser perspective is concerned, the study of LC1 markets is critical for a few mass brands, for example in the FMCG segment. However, for other advertisers like the LGs and Samsungs of the world, it doesn't matter. They are still in the process of penetrating the metros and the one million plus cities. The FMCG players will obviously be more interested in knowing what happens in these smaller markets.

LC1 markets were never measured so nobody really knows the media consumption behaviour in these areas. This is a start for the industry to get a perspective on the smaller towns, and understand the viewing patterns. Here, we are talking about markets where the infrastructure is not sound, and the operations aren't that good. These are really small, population-wise.

While broadcasters are correct when they say that the averages of viewership data are going down, they must understand that the reach is ultimately increasing, since the audience base is increasing. Even the metro markets were once like these LC1 markets with poor infrastructure and power cuts. They gradually developed, and so will these towns.

TAM's extension of people meters to these markets is not guided by the Government-mandated DAS (Digital Access System). These towns, however, already have a significant footprint in digital, which is close to 3 million households.

If we talk numbers, there are two ways to look at it. One is the absolute number of people who watch the channel and the other is the time spent per viewer (TSV). Obviously the absolute numbers of viewers have grown but the time spent is hampered by the irregular power supply in these towns. The overall time spent on television is low in these places.

This data and understanding gives the broadcaster an option to re-look their scheduling strategy, content, promotions and marketing with respect to these towns.

Paritosh Joshi, independent consultant

There have always been complaints about the TAM footprint being narrow. The need to include more people in the calculations of viewership numbers was pressed upon for long. In principle, broadcasters always wanted newer markets to be included in the measurement.

As far as the splintering of the sample is considered, I think the major problem with the broadcasters is that they are still selling on a Cost Per Rating Point (CPRP) rather than Cost Per Thousand (CPT). CPRP is a relative number. While the absolute audience numbers of television viewers are increasing by the day in India, the relative number is coming down. For example, a 15-TVR show doesn't exist today.

Adding new markets implies different viewing behaviour.