TV.NXT 2011: Redefining the Indian TV viewer through TAM's new SEC system

The post-lunch session on Day 1 at TV.NXT 2011 saw presentations by L V Krishnan, chief executive officer, TAM Media Research, and Sharan Sharma, senior vice-president and head, measurement science and data analytics, TAM Media Research. Over the course of thirty minutes, the two gentlemen spoke about what the new SEC (socio-economic classification) system released by the MRSI (Market Research Society of India) and MRUC (Media Research Users Council), after five years of analysis, means for broadcasters. This was the first time this topic was being addressed in the form of a detailed presentation on an industry platform.

The path so far: 1988-2011

The SEC system that has been in place since 1988 has thus far served to align India with other nations and has, in part, put India on the international map. Broadcasters and media planners have, since 1988, used two variables to classify audiences, namely, occupation and education. Essentially, the occupation and education of the chief wage earner (CWE) -- that is, the family member who has maximum income in the home -- were used to deduce the SEC of the home in question. For this, there were five gradations -- that is, the home was then classified into one of A, B, C, D or E. From an education perspective, SEC A usually meant that the chief wage earner (gender regardless) is a post-graduate who is working at a senior level in a multi-national firm/is a businessman/industrialist while the SEC E segment implied that he is illiterate/8th pass.

So, based on these variables, Indian audiences have been, until now, classified. This classification system has been used rigorously for the past 23 years.

"In the last two years," said Krishnan, "There emerged the need to see whether this kind of classification applied to the new environment, given the changes in the economy (GDP growth rate) and markets." Thus, the need to take a re-look at the current SEC grid was felt.

Education and occupation, to education and durables

Sharma took over and spoke about the finer aspects of the new SEC system. He spoke about how, while retaining the education of the CWE, it replaces his/her occupation by the number of durables in the house. Explaining this further, Sharma said, "The purpose of this is to try and get a sense of the purchase propensity and consumption - something that occupational classification might not do."

Basically, there are 11 durables that this new system uses to classify a person. These are grouped in the following manner: The first group comprises a PC/laptop, refrigerator, AC, colour TV and washing machine; the second group comprises an electricity connection and a ceiling fan; the third group comprises a car/jeep/van and a two-wheeler, and finally, the last two groups have only one durable each, namely, an LPG gas stove and agricultural land.

Current versus new SEC system: A comparative analysis

Firstly, while the current system is an urban-only classification, (that is, it only classifies households in urban India and doesn't touch rural India at all), the new system is going to classify people from homes in urban and rural India. "This," offered Sharma, "will help advertisers to carry out pan-India plans."

Secondly, the current system poses the problem of force-fitting people into certain kinds of occupations; for instance, a priest is a 'skilled worker' as per this classification system. The new system, on the other hand, makes it easy to fine tune audiences as it offers segment contiguity. In fact, as opposed to the old system that had only eight segments (A1, A2, B1, B2, C, D, E1 and E2), the new one offers 12 segments (A1, A2, A3, B1, B2, C1, C2, D1, D2, E1, E2 and E3).

Thirdly, as per the current system, it is fairly easy to visualise a person from a certain SEC. The new system makes it tougher to visualise what someone from a particular SEC looks like.

Lending a fair degree of stability to this new system, is the common variable education, which makes the transition from the current system to the new one easier. The change is not all that drastic, stated the authorities.

How does this system change life?

First of all, as per the new system, 50 per cent of the TAM panel owns over five durables as electricity and colour TV will almost always be in a TAM panel. Secondly, while the current system is skewed towards SECs C and D, the new system is skewed around SECs A and B.

Explaining the implication, Sharma added, "The question that arises is 'Is SEC A really upscale?' Our mental definition of what kind of image constitutes 'upscale' will change."

Secondly, there is a high co-relation between education and the number of durables; higher the education, higher is the chance of owning more durables. This makes the transition from the current to the new system easier. Also, aiding the transition is the fact that from a content-development perspective, there is a lot of overlap between the two. For instance, 70 per cent of the new A1 and A2 SECs will be people belonging to the current SEC A segment, and 25 per cent of the new SEC B is made up of current SEC B people. So, effectively, TAM's proposed breaks will be SEC A1 A2, SEC A3, SEC B, SEC C and SEC DE. This will give broadcasters a chance to fine tune and target their audiences a little better.

Explaining changes in the whole TV viewing basket (channel share percentage, CS 4+) as per the new system, Sharma explained how there is an increased skew towards Hindi GECs, Hindi news, business news and special interest channels (SICs), and a drop in viewership of regional and Hindi movie channels.

Insisting that this new system is merely a new way of looking at the consumers who in themselves, haven't changed, Sharma enlisted the challenges that this new system brings with it: While offering new audience-segments to track, offering clearer skews and including rural audiences, it might be challenging to get used to the new definitions involved and draw up new mental images of people belonging to particular SECs.

Plans ahead

In conclusion, Sharma announced that TAM will aid the industry in defining a 'standard set of durables' now that it has discovered that viewing preferences are associated with owning a particular durable. Amongst transition plans, the speakers announced that starting from the first quarter of 2012, both the current and new SEC systems will be given out to ease people into the change smoothly. Both systems will run parallel to one another for a period of six months before the new one takes over fully.

Further, in an effort to estimate the new SEC segments, a large scale Establishment Survey (involving five lakh individuals) with NCAER (National Council of Applied Economic Research) has already been completed.

(TV.NXT is organised by afaqs!, in association with STAR News (presenting sponsor). The other sponsors include Zee 24 Ghante Chhattisgarh, Amagi, HeadHonchos, ApnaCircle.com, Fox History & Traveller, and Lukup. TV.NXT was held at JW Marriot, Mumbai, on September 29-30, 2011).