TV.NXT 2012: Do TV news channels earn the advertiser's buck?

There is a general perception that several issues in news television stem from the business itself. On Day Two and also the final day of TV.NXT 2012, a discussion focussed on the problems and why they have an inclination to affect TV news channels more than entertainment.

"I am one of the oldest people in the television news business. The quality of TV news has deteriorated alarmingly. But, it is important to look at the root causes on why TV news has reached this stage." Thus opened the discussion with Vikram Chandra, executive director and CEO of NDTV Group.

He blamed the change in the business model of TV news channels for the deterioration. "No subscription money is coming in and massive carriage fees are being paid, because of which TV news channels are entirely dependent on advertising and hence, TRPs," he said, and also drew reference to his and NDTV's views on the 'flawed' TRP system. "The problem is that the entire ad industry pays on the basis of those ratings and that is how we do business," he said.

He jokingly mentioned that considering that the kid's genre is doing well according to the TRP ratings and if the same has to be believed, then Prannoy Roy, Barkha Dutt, Arnab Goswami, Rajdeep Sardesai, all put together have lesser appeal than Pokemon. He emphasised that the system has to be fixed. "The present currency is not working and we need to figure out what currency works here." He added that he hoped that with digitisation, many issues such as carriage fee will be sorted out.

Joshi asked G Krishnan, former CEO, TV Today Network how the TV news business changed from the business perspective. To this, Krishnan replied that the primary objective for any news channel is to get good journalists and good business people and the mixture of these two always delivers the best outcome. He also emphasised on getting the TRPs right. "In the newspaper business, you get data every three months but in the TV business, you get it once every week. Should the TV people suffer because they produce 24X7 content? " questioned Krishnan.

One of the problems that news channels face is the over frequency of reporting TRPs.

Sam Balsara, chairman and MD, Madison World, said, "It is nobody's birth right to get the advertiser's money. It has to be earned and you are not going to get it on a platter. Just because you have paid money for your OB van, or invested in a highly paid anchor doesn't make you earn the advertiser money."

He said that just like anyone has a business to run, he has a business to run, too. "You can't take anything for granted today, everything has to be earned," he said, recalling the early years of Aaj Tak, when Godrej didn't buy any news channels, how Madison bought Aaj Tak for it and he didn't even know or look at the ratings. "It is completely stupid to say that ad-media agencies and clients only go by TRP ratings, if that was the case then Aaj Tak wouldn't have even started." "Even for NDTV, he said, advertisers were paying 6 times more than their rating would get." He said that the challenge for the TV news channels are not the advertisers but to get their basic job right, get the eyeballs and the viewership.

Chandra agreed with Balsara and said that it is fundamentally the responsibility of the news channels to generate good content. "But there has to be the right way to find out who is watching what channel."

Avinash Kaul, CEO, Times Now, ET Now and Zoom Entertainment Television said that we have to look at positive benchmarking. "Yes, the currency has issues because of the sample size, but that is the only currency. Till the currency is there all the other parameters are irrelevant," he said.

There is a notion that carriage fee will soon turn around with the setting in of digitisation. Joshi asked Arun Poddar of Media Network & Distribution (India) how digitisation will come to the rescue of the channels.

Poddar replied that digitisation will certainly open up a lot of positive slots for the news channels. "In a sense, the carriage fee is not going to disappear. The biggest challenge for us is how to minimise the carriage fee. But, it may come down. How much it will come down is the big question."

He said operators and distributors are not really that bothered about carriage fees. "Today, in some cases the big broadcasters are not even concerned about bringing down the carriage fee," he observed.

To him, the transparency that everyone is talking about is not really very clear. "Here the liberty of the consumer to choose a channel will play a role. Also, today we don't know which channel is running in what kind of home,"

he noted.

Preet Dhupar, director, finance and operations, BBC World stated that no other industry in India has a tariff fee as TV. Also, she raised a very pertinent point that the news consumption pattern in the recent days has also changed. She added, "You look at mobile, internet, TV and print and consume news from all directions. Hence, your business and revenue models too need to evolve over the time."

Balsara underlined how everyone gets paid for the value delivered. "Pricing is determined by demand and supply. Pricing in media is ultimately decided by the rating point. There are 10 advertisers who want the same property. Ultimately, it is important for both broadcasters and print media owners to have two sources of income," he said.

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