"Ad regulation could wipe out the news genre": Sunil Lulla, Times TV

In the current environment of the ad regulation discussions, news genre seems to be the most vulnerable of all. In the same reference, afaqs! spoke to Sunil Lulla, CEO, TTN (which has two channels in the English news space) about his view on the expected losses in the genre.

Also, the network has recently launched an English GEC, Romedy Now. afaqs! also asked him about his views on the situations facing the industry.

Edited Excerpts

That's a micro view. Romedy Now is as much a Hollywood product as Movies Now. That doesn't make it in the same genre. Content on Movies Now is a lot more action oriented, adrenaline pumping movies. Romedy Now is not based on a genre, it's based on an emotional attribute, on a belief that people want to live, laugh and love. It envelops both, men and women. It works on comedy and romance, and as a product will be a blend of TV series and movies with a mix of both old and new movies. Both are built on recent libraries and decent libraries.

We believe that as a television franchise, we are very young and need to grow a lot. Our growth is going to come through new channels and from the organic growth of our current business. A larger part will still come from new channels and we will keep launching new channels.

Our journey is still very young. Our first channel, Zoom, was launched nine years back, in 2004. Then came Times Now in 2006, followed by ET Now in 2009. Movies Now was launched in 2010 and now, Romedy Now. We are still in our learning phase in television. When there's a right opportunity, may be.

Our philosophy has always been to target the top-end of the consumers - people who have the money to spend.

The Hindi news channel market is very cluttered and needs to evolve a bit. The prices are very low. The advertisers pay significantly more on English news than Hindi news.

A lot has changed. One, the content part of the news business has evolved very significantly. The nature of standards and self-regulations that have come to implementation today are far more stringent, far higher and are creating better products, in my view.

Also, there is the diversity of the political parties, the businesses and stars. There aren't 2-3 superstars today; there are 20 of them. Even the arena of sports reporting has increased, you have IBL, IPL, football and Hockey. So the news channels have a lot to cover and it's going to be a lot more challenging.

The cost of the business has gone up, too. News business faces a challenge today in terms of operating and giving financial returns. I also believe that the current economic environment, slowdown and the higher costs are pushing the business really hard.

Second, the nature of the consumer has also changed. He's become very demanding and is using media as a tool for action. Whenever something goes wrong, the consumer looks up to the media and expects it to change or at least raise a voice against it.

Third, I feel, the market has increasingly more players, which makes it more competitive. What is interesting is that the country is going to see one of the most interesting elections and that's supposed to be news' Olympics, so to speak.

It will hurt news genre significantly more than the others. If there's one thing that could wipe it out, it's ad-regulation. Now, if news channels are asked to come down to 12 minutes of advertising per clock hour, about 30 per cent of the channels in the genre will be significantly impacted, though the impact could vary from category to category. Now that their full day is clocked like this, the main hours of advertising revenue will go for a toss, thereby all of them losing about 25-30 per cent of their revenues. It will be tough to survive. They will be hit by roughly Rs 1000-1500 crore.

The concept of advertising on news channels is very different. The uplinking/downlinking guidelines say that you will abide by a certain ratio of advertising per hour, it doesn't say every hour.

If there is the Prime Minister's speech being telecast, should I take a scheduled break? Out of respect to the consumer, the spokesperson, you don't take a break. So then, this gets delayed and you have to give the client a make good. It means that may be the next break structure is going to be more than what is conventionally acceptable, permissible and manageable.

In the current environment, there are too many breaking stories. In the ad-regulated environment, the news might become extremely boring. Everybody will take a scheduled break and disrupt the news stories.

I hope the channels don't have to shut down. Whether it's filtration, I am not the licensing issuing authority. But, I think, criteria needs to be set up. Today, there are media houses, industries, politicians, businesses, political parties, all types of people in the news business. Both as a buyer and a viewer, this is what we are buying.

Any industry which has been left to market forces has evolved significantly better than an industry which has been regulated. Compare telecom versus IT, medical versus hospitality. Media in my view has largely been left free and open but there are some bordering constraints such as the ad-cap and the frequent changes in policies. There will never be happiness in self regulation; somebody will always be unhappy but everybody will be unhappy in a regulated environment.

The best regulator is the consumer. Each one of them has a remote in their hands and that makes it fair play. If there are too many ads, they will switch. The second part is that then you learn why people are switching, you automatically moderate.

The first phase of digitisation definitely pushed down the carriage fees by 20-30 per cent. At stage two, there are greater sets of difficulties. The MSOs haven't really reduced the carriage fees. Isn't it because of the investment in set top boxes? Might be, but they could have parted the investment with the consumer. Nobody is in social service business. If a consumer can't afford a cable TV, he won't watch it.

I feel market forces are designed for the rationalisation of carriage fees over a period of time. Subsequently, there must be an improvement on the subscription that comes back to the broadcaster and there must be a more transparent share between the LCO and the MSO, and that between the DTH and the broadcaster.

This won't happen in a minute. You are trying to evolve an industry which has been reasonably chaotic for 20 years. It's going to take at least five years to do that.

As for TTN, three things have happened in my view. Carriage fees are down by about 25 per cent (metros were major markets for us). Second, it's giving a breathing space to channels like Romedy Now. Third, because of digitisation in more markets, it has allowed the pay roll out of our channels in more markets. So the penetration will grow, we have a subscription relationship with MSMD (MSM-Discovery) and I think we will subsequently see better returns.

The roll out of digitisation in most countries takes eight years; India is a rather complicated market.