TRAI attempts to unseat broadcasters in BARC board

On April 28, 2020, the Telecom Regulatory Authority of India (TRAI) issued a set of recommendations that can potentially change the dynamics of the television industry. In India, TV viewership is measured by Broadcast Audience Research Council (BARC) India, which is an industry body that includes broadcasters, advertising agencies and advertisers. On December 3, 2018, TRAI had issued a consultation paper 'Review of Television Audience Measurement and Ratings in India' and asked various stakeholders to submit their comments.

Why did TRAI decide to intervene and issue the consultation paper? "Several concerns relating to neutrality and reliability of the existing rating system have been raised by stakeholders, which necessitated a need to review (the) existing Television Audience Measurement and Rating System in India," replies TRAI. Though these complaints aren’t available in public forums, if TRAI sources are to be believed, then it is primarily the broadcasters who have complained more often.

"There are news channels which are members of the association (News Broadcasters Association or NBA); niche and entertainment ones, too, have complained many times about various kinds of discrepancies. From manipulating panel homes to tweaking the data in a manner that favoured a certain set of broadcasters, there were complaints about a wide set of issues," said a senior TRAI official on condition of anonymity.

A broadcaster refused to buy TRAI’s “Several Concern" – theory. “Not a single advertiser or advertising agency commented on TRAI's consultation paper which shows they are happy with the system. If the advertisers, agencies trust the system in place, why is TRAI getting into it?," asks a broadcaster who is also a member of the IBF.

TRAI received 23 comments on the consultation paper it issued and three counter comments. Based on these, on April 28, just a day before BARC completed five years of operation, the regulator issued its recommendations, which include changes in the governing body, way of collecting, and publishing data.

BARC India currently has 10 directors on its Board. Six of them are broadcasters, two are media planners representing the agencies, and two advertisers. This means that the Indian Broadcasting Foundation (IBF) currently holds the majority. That is primarily because BARC India is a an initiative funded by the broadcasters. It the beginning, major broadcasters were guarantors for the bank loans that BARC got to startup.

Before we get into TRAI's recommendations regarding the governing council, it is important to understand the current dynamics under which BARC functions. At this stage, BARC India's revenue stands at around Rs 300 crore, out of which about Rs 265 crore comes from the broadcasters. Of the remaining Rs 35 crore, AAAI contributes a part, and the lion’s share is earned through other sources, like reports, consultation...

BARC India's ratings is based on the viewership data it collects from 44,000-metre homes, while its predecessor TAM used to do so through 8,000 homes, out of which, 7,000 were in urban India. It is worth mentioning here that BARC in five years manage to increase the panel homes from 20,000 to 44,000 which is five times more than what TAM could throughout its existence.

In its recommendations, TRAI suggests that BARC India needs to make structural reforms to its board in order to "mitigate the potential risk of conflict of interest, improve credibility, bring transparency, and instill confidence of all stakeholders in the TRP measurement system." It suggests a new composition where the board should have at least 50 per cent independent members, including one member as a measurement technology expert, one statistician of national repute from top institution(s) of the country, and two representatives from the government/regulator. It adds that the restructured board should provide for equal representation of the three constituent industry associations, namely, AAAI, ISA and IBF, with equal voting rights, irrespective of their proportion of equity holding.

Which, therefore, means that the current six-two-two ratio can no longer sustain. Out of the 50 per cent independent members, TRAI has already pronounced four. So, the new board could include two broadcasters, two (individuals) from the agencies and two advertisers, making the 50 per cent, while six independent members constituting the remaining 50 per cent. This will unseat the broadcasters from the controlling chair in BARC's Board.

"This is illogical, illegal and at the same time impractical. Why would broadcasters fund the whole thing and then sit with a reduced share, there are others in the board too, if there are discrepancies they can point out. Companies like HUL spend more than Rs 3,000 crore on TV, if they thought there was a conflict of interest they would have raised the flag,” says a broadcaster and member of the IBF.

Who has a problem with BARC?

Not a single advertiser or advertising agency who carried out transactions worth Rs 34,000 crore in FY19 (ad spend on TV) based on BARC India data comment on the consultation papers. “The channels with vested interest go to TRAI with all invalid complaints without discussing the same within the industry body,” says a broadcaster who worked closely with BARC.

The first question that TRAI asked stakeholders in its consultation paper is, "Whether BARC has been able to accomplish the purpose with transparency and without any bias for which it has been established?"

While advertisers and agencies gave it a skip, few independent associations and distribution platforms expressed their concerns over the way BARC functions. News Broadcaster Association which represents a large section of news channels wrote to TRAI, "NBA submits that the BARC ratings in respect of the news genre are neither transparent nor accurate." News constitutes 8.9 per cent of the total television viewership.

What's next?

"It is clear that TRAI is coming after the broadcasters, first with NTO 2.0 and now with these recommendations to revise the way BARC functions. This will now go to the Ministry of Information and Broadcasting and the future course of action will depend on what the ministry decides," says a broadcaster.

Is it fair for the broadcasters to lose rights in BARC’s board despite almost solely funding it, remains debatable. AAAI, IBF or ISA is yet to issue a statement on TRAI's recommendation as the ball rolls to the court of the government, which isn’t too fond of BARC either.

Ravi Shankar Prasad, Union Minister holding the Law and Justice, Electronics and Information Technology and Communications (portfolio), had said during FICCI Frames in 2016, “I am not happy with the TV rating system. I never approved of TAM and I am not very impressed by the new alternative (BARC) either. How can a few hundred boxes tell me which show is number one? Something should be done to make the television ratings more accurate.”

TRAI, in its recent recommendation asked BARC to take its sample size to 100,000 homes by 2022, but who will fund it? Is there enough money available? We will discuss this in the next story.