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"Television industry is unfortunate to have a regulator (TRAI) who is out to destroy the business": Uday Shankar

President, The Walt Disney Company Asia Pacific and chairman, Star and Disney India, was recently interviewed by Nikunj Dalmia for ET Now. Highlights,

Uday Shankar, president, The Walt Disney Company Asia Pacific and chairman, Star and Disney India, in a recent interview with Nikunj Dalmia of ET Now, spoke frankly about the state of affairs in the Indian TV industry. Shankar was asked about the impact of COVID19 on the media and entertainment industry as a whole and the television space in particular. Shankar touched upon several issues that the media industry is currently dealing with and what lies ahead.

While responding to Dalmia's question on the television industry, Shankar said, "Television has already been under pressure, partly because of the kind of shift (consumption) that is taking place in the environment and partly because the television industry in this country is unfortunate to have a regulator who has no understanding of the business and who is out to destroy it."

Shankar went on to say that because of a regulator like the Telecom Regulatory Authority of India (TRAI) the odds of television regaining its health post-lockdown are "very low". He added that with the kind of regulations in place, it would be "very difficult" for players in the business to make any profits. "Unfortunately we do not realise that regulation means ensuring an even playing field and transparency. But finally, if the businesses are not able to do well and succeed then nobody would invest and there is a real risk of that happening in the television sector in India," said Shankar.

He explained, "Advertising income was strong so the regulatory pressures that are value-destructive on the distribution side were sort of mitigated to some extent. Now, it has become a twin-sword on both advertising and distribution fronts making it really tough for the television business, and when it comes to fresh investments, I don't see people coming in to put money."

It is worth mentioning here that TRAI regulates how broadcasters must price, bundle and present their channels. In February 2019, the TRAI implemented a new tariff order which mandates consumers to subscribe to channels of their choice. Earlier the cable operator bundled all the channels and provided it for a fixed fee which varied depending on the localities.

In January 2020, the TRAI issued amendments to the regulatory framework with new and stricter restrictions on bundling and pricing. Broadcasters said the amendment can destroy the television industry. Last month, when the broadcasters were burning their midnight oil trying to figure out a survival strategy, the TRAI issued recommendations that would change the way TV viewership is measured and moreover reduce the strength of broadcasters on BARC India's Board.

Apart from regulatory issues, Shankar spoke about the programming challenges that the sector is facing. With all kinds of filming put on hold, television channels are telecasting reruns. "Even if the lockdown is lifted it will be difficult to restart programming as it involves all kinds of people who might not be available or might not want to risk it," said Shankar. He is of the opinion that the television industry will relook the way it functions. "Do we really need so many people to film a show?" is what he believes the industry should think. He feels, going forward, broadcasters will reduce investment on content: "If we were doing 10 shows, now we might start with three because of both logistical and financial challenges," opined Shankar.

He assessed that advertising on television is at 20-25 per cent of what it normally is and that the industry is headed towards a "dark, scary, long winter."

You can watch the full interview here.

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Posted by ET NOW on Friday, May 8, 2020
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