Digitisation: Ad deals may be reworked on short term basis

Mumbai: Advertisers may have to enter into transitory arrangements with broadcasters if some homes are left without digital cable connections in the four metros after 1 November.

The government has mandated compulsory end to analogue delivery of television channels after the digitisation deadline, resulting in the possibility of a significant number of cable TV homes going without television signals for failing to have set-top boxes (STBs) installed to receive digital television signals.

"In the worst case scenario, when we do have 30 per cent dark homes in the four metros, there may be need to rework the commercial deals on a short term basis," Leo Burnett Indian sub-continent chairman and CEO Arvind Sharma told

The Information & Broadcasting (I&B) Ministry last week said 68 per cent of cable TV homes in the four metros of Mumbai, Delhi, Chennai and Kolkata have already installed STBs to receive television channels in digital form. It said Mumbai leads the progress in digitisation with 95 per cent homes digitised, followed by Kolkata with 67 per cent. In Delhi, 53 per cent of the cable homes have switched to digital and in Chennai, 49 per cent.

The number of households, however, is based on census data and a broad section of the broadcast industry does not believe this reflects the actual estimate of the STB requirement in these four metros.

"In my opinion, digitisation will ramp up and only in the interim period will we as industry (advertisers, agencies and broadcasters) have to work out short term commercial deals. More importantly, the events of the next 40 days will be crucial," Sharma said.

So will TAM, the television audience measurement agency, report from digital homes only in the four metros after 1 November? A TAM spokesperson said: "TAM started reporting Digital TV Homes viewing data since 2008 when Digitization crossed threshold levels in some of the markets. TAM currently reports data from Non-C&S households (Terrestrial Antenna reception mode)and two types of C&S households: Digital C&S and Analog C&S - depending on whether households receive channels through a Set-Top Box (STB) or without Set-Top Box.

As per TAM JAN 2012 TV baseline report, almost 35% of All India C&S homes have already adopted Digital way of watching TV, with 1/3rd of them coming from Urban markets. The government, by its DAS notification, has mandated that from November 1st 2012, C&S channels can be legally received in the Municipal Corporation (MC) limits of the four major metros (NCR for Delhi) only through a Digital STB. Therefore, from NOV 1st, TAM will not report data of channels viewed in TV Homes that are not received through a Digital STB in these areas (exception being, viewing happening in TV Homes through Terrestrial Antenna signal reception)".

The spokesperson added: "In other words, TAM will only be reporting Digital TV viewing data and Non C&S TV viewing in the DAS implemented areas of the 4 City. Data from Homes in the non-MC area of the cities (which does not fall under Phase I of DAS implementation) will continue to be reported as usual. We will be sending out a formal communication to our clients in the coming few days spelling out the details."

As a broad section of the industry feels that a total 100 per cent STB penetration will not be possible on day one itself (1 November), there will be some empty homes. If TAM sticks to its current statement, this will mean the analogue coverage in the four metros will not be reported by TAM. So what happens if cable TV operators transmit the analogue signals illegally (take digital signals through a STB and convert it through a modulator for carriage on their analogue networks)? The government, however, is determined to implement digitisation and may take recourse to strict action by arresting the ‘violators‘ under criminal offence.

Media agency ZenithOptimedia CEO Satyajit Sen fears some kind of temporary disruption in business. "We presume that there will be disruption in the business. In the four metros, there aren‘t enough STBs to make them (cable TV homes) all go digital. Majority of the consumption of various categories happens in the four metros. Our clients will demand for TAM ratings and hence we will also ask for it," Sen said.

Lodestar UM CEO Shashi Sinha, however, is not disturbed by the disruption in TV viewership. "People who matter to us are the consuming class and they will switch to digital. May be in the beginning for two to three months, we will see some impact but gradually everyone will switch to digital. At least the consuming class will by the last week of October," he said.

Broadcasters to switch off analogue, Rajat Sharma to work in interests of viewers

Broadcasters are largely confident of a smooth changeover to digital delivery of television channels from analogue. Like Lodestar‘s Sinha, Times Television Network MD & CEO Sunil Lulla too felt there is no need for any worry as the first phase of digitisation is happening at good speed.

"Digitisation will happen. People who want to get STBs will get those who don‘t want won‘t," Lulla said.

The government is dead serious this time around in ensuring digitisation happens in the four metros by the deadline of 1 November and that all the stakeholders are brought on board. It has issued orders directing broadcasters to switch off analogue decoders in the four metros, unlike in 2003 when certain pockets in the metros were asked to shift to digital delivery of television channels.

The government has gone a step ahead and made carriage of analogue television signals after the digitisation deadline in the four metros a criminal offence.

BAG Films CMD Anurradha Prasad said, "All broadcasters want digitisation and, hence, we all will be switching off our analogue signals from 1 November. This is an order of government."

An NDTV spokesperson said, "The government order is sacrosanct and the broadcasters are adamant on switching off the analogue signal from 1 November."

India TV chairman and editor-in-chief Rajat Sharma sounded a different note. He said, "For all stakeholders -- IBF, NBA, I&B Ministry and MSOs, the viewers‘ interest is foremost. We will take a call keeping in mind that the viewer doesn‘t suffer."

Pay TV channels will be more than willing to shift to digitisation as early as possible as it will mean a rise in their subscription revenues as the number of cable television subscribers disclosed by local cable operators will rise. In analogue, cable operators under-report the number of cable TV connections and thereby cause a loss of revenue for broadcasters with pay TV channels.

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