Winds of change in India's TV ratings land

MUMBAI: The relentless attack against TAM Media, India’s sole television ratings system, is coming from all sides.

First NDTV’s lawsuit in New York accusing TAM of knowingly allowing manipulation of viewership data in favour of channels that are willing to provide bribes to its officials. Next the Indian Broadcasting Foundation (IBF) pressing for the existence of Broadcast Audience Research Council (BARC). And then the Prasar Bharati board approval to explore legal options against TAM in consultation with the Information and Broadcasting ministry.

TAM’s final support from advertising and media agencies is also cracking. The Advertising Agencies Association of India (AAAI) and the Indian Society of Advertisers (ISA) have expressed concern over the issue and are meeting TAM officials on 16 August.

“We (ISA and AAAI) will be taking a collective view on this issue. We have scheduled a meeting with TAM later this week. I have no independent opinion that I can share with you at this stage,” says GroupM South Asia CEO Vikram Sakhuja.

So is there something rotten in the ratings agency that influences advertising expenditure of around Rs 140 billion on Indian television networks a year?

The truth is that parachuting out of TAM is no easy option. There is no surviving ratings agency and setting up operations in quick time to represent India’s vast and diverse socio-economic structure can’t happen in any hurry. It has, after all, taken TAM 14 years of hard experience in the Indian market to set up a ratings system that may have become inadequate in coverage now (broadcasters would say inaccurate too) but has largely captured the industry needs over so many years.

BARC and the power tussle

BARC, the option that broadcasters have been toying with for so long, is yet to gather wings. It is in a way stuck between a power tussle between the broadcasters and the agencies. Even after agreeing this March on a shareholding structure with broadcasters having a majority of 60 per cent equity and the AAAI and ISA holding the balance 40 per cent, it has failed to get off the ground.

“We (IBF) are keen to set BARC in motion. But AAAI and ISA have been responsible for slowing down the progress,” says IBF

president and Star India CEO Uday Shankar.

That direct attack has not gone down well with the agencies. “The ball is in the IBF court and the draft document (incorporating memorandum and articles of association) has been sent to them a while back,” states AAAI president and Leo Burnett chairman and CEO Indian subcontinent.

But why will the media agencies be interested in delaying the existence of BARC?

“Maybe, the system is working for them. Only one-third of the country is measured by TAM and for that they are getting paid (by the broadcasters) for the whole of India. Television advertising is, thus, cheaply priced and they are benefitting from it,” says the chief executive of a leading broadcaster on condition of anonymity.

AAAI president and Leo Burnett chairman and CEO of India subcontinent Arvind Sharma does not agree that the agencies do not want a new ratings system as the current structure helps them drive down prices. “The belief that the only purpose is buying cheap is not right. Clients have a very different agenda and are interested in reaching out to their target audiences. In a free market, pricing will definitely be an issue but not the only one that matters,” he says.

The root of the matter is that broadcasters, yielding to the muscle power of the media agencies who have consolidated over the years to gain size, want to strike a balance that will enable them to get better pricing for their content as costs have spiraled over the years. They have been unable to do that for so many years but a new-found unity due to economic compulsions has provided them with sufficient strength to push for BARC.

Shankar, a newsman throughout his work life till Rupert Murdoch made him the CEO of his highly successful media empire in India, was quick to sense this changing pulse. Sharing a great relationship with the son of Subhash Chandra and Zee Entertainment Enterprises chief Punit Goenka, he played a main role in uniting the broadcasters in this fight.

The benefit of that unity: broadcasters could get majority stake in BARC and even went to the extent of excluding ISA.

“They (IBF) first said why have ISA as a part of it (BARC). That came as a stumbling block. But we are cooperating with them and are not resisting anything that will genuinely protect the interests of our clients and the industry as a whole,” says the head of a leading media agency who did not want his name to be revealed.

When BARC was first mooted in March 2008, the ISA was kept out of the shareholding structure. The IBF held 60 per cent IBF and the remaining 40 per cent was with AAAI.

“In the beginning, an ISA representative said they want 50 per cent share. Then it watered down to one-third of stake with each body and they even said that they would not pay for their equity holding. We were appalled by the suggestion as it would have given the two of them a combined share of two-third in the entity. We found that unacceptable and said that if they made such demands, ISA could be kept out as the interests of these two bodies are aligned and they want to buy advertising cheap. Obviously, we didn’t want IBF to be outvoted. Since the ratings system is primarily for a broadcast market and there is need for complete independence of data, we didn’t want any change in the construct of the shareholding,” says Shankar.

How the power equation changed

So why did the agencies bend and come down to supporting BARC?

“The government has stepped in and that has changed the power equation,” says the head of a broadcasting company.

The situation has, indeed, changed. When Zee raised its voice against TAM in late 2001, alleging leakage and manipulation of data, it appeared like a lone wolf wailing in the dark. Few came in support and TAM CEO LV Krishnan then countered that the channel did not raise the credibility issue when it was enjoying higher TRPs (television rating points). “Was it because some other channels have an edge today,” he had stated.

Even when Doordarshan clamoured for a wider representation of measurement data that would be able to capture its kind of mass audiences, it did not get support. Private broadcasters were then busy eating into the audiences of the pubcaster and expanding their own networks at a time when cable and satellite television started penetrating wide and deep.

NDTV’s allegations have, perhaps, caught more attention as the broadcaster has not just moved the court but also filed it in New York. It also cited an unidentified “whistleblower” who seemed to have said that he “accepted bribes from TV channels and in turn paid bribes to TAM officials and to some of the people who have allowed TAM to install peoplemeters at their homes”.

Growth in Tier II and III towns demand expanded coverage

The embarrassment has come at a time when TAM is under pressure to expand its coverage to smaller cities and get into more demographic sampling. India’s growth is coming from tier II and III towns, forcing companies to advertise and market in these areas. Regional television channels and media are, as a result, fostering faster growth.

“In the last 3-4 years, hinterland India is where growth is taking place. To make smart choices, media agencies need data. There should be urgency in moving forward to get a new measurement system in place that will be more representative of the country,” avers Sharma.

Niche channels, which have grown in numbers over the years, are also feeling the heat and are wanting a ratings system that would measure upscale audiences in greater intensity. “We would like a more healthy mix of sampling homes,” says the head of a niche channel.

News broadcasters are the biggest victims of this inadequate representation and, saddled with exorbitant carriage costs and loss-making businesses, are also the most vociferous. They blame TAM and a weekly ratings reporting system for putting their content under constant evaluation and pressure, leading to a larger degree of commodification of news across networks.

“There is a general sense of dissatisfaction with the current ratings system. This is what is throwing the whole pattern out of gear. There is anarchy in data and we can notice the skews in time spends and viewership trends between analogue and digital homes. BARC will look for a more equitable basis of data representation where there is more consistency,” says Sunil Lulla, MD and CEO of Times Television Network, the holding company that runs a clutch of channels including Times Now, ET Now, Movies Now and Zoom.

The time has, indeed, come for the TV ratings system to narrow the gap in representation between bigger and smaller towns and measure more equitably across the demographics and socio-economic strata. BARC has set a target of reaching out to 30,000 homes, much higher than TAM’s current panel size of 8150 peoplemeters with sample size of 36,000 respondents across 162 cities and towns.

TAM‘s task at hand

For TAM to appease the broadcasters in particular, it will have to first expand into more cities and add peoplemeters. It is that basic. But to achieve that, it needs funding support from the industry which has been in scarce flow so far.

The ratings measurement agency has set itself a target of the coverage extending to over 225 towns with 10,000 peoplemeters and 45,000 sample size (respondents). TAM also aims to expand into the less than Class 1 India markets. Since 2009, it has been covering Maharashtra in the ‘Less than Class I’ geographic stratum. To this stratum, it is now adding seven more states: Gujarat, Madhya Pradesh, Punjab, Haryana, Himachal Pradesh, Rajasthan and UP. These will be reported as individual states except for Punjab, Haryana, Himachal Pradesh which will, as usual, be reported together as PHCHP. TAM had announced the plan of going rural in July 2012. This will add up another 1110 sample homes.

With this expansion, TAM believes it will practically complete covering the entire urban stratum for the Hindi Speaking Market (HSM) group.

BARC’s ambition is much higher. An initial requirement of 30,000 peoplemeters would require an investment of around Rs 6.5 billion. For anybody to achieve that, TAM would need the industry to drum up investment.

Situation demands therapy

The situation demands therapy. Publicis India CEO Nakul Chopra believes there is a lot of scope for improvement. “There are issues on the sample size, methodology and industry-wide acceptance. From that perspective, the time has come for treatment. Let us forget the micro issues like corruption, integrity and veracity of data, though it is a matter of grave concern as there is a lot of time and energy agencies spend on strategising. The truth is that the macro situation demands the existence of a watchdog body like BARC,” he says.

Multi Screen Media president network sales, licensing & telephony Rohit Gupta has suggested some immediate measures that need to be taken. “Right now it is TAM’s word against the world’s. We should have an audit process mandated by the three bodies (IBF, AAAI and ISA) which would clear a lot of smog. Also, BARC should get activated soon. Clients should now wake up and put pressure on agencies.”

The AAAI had a meeting with the IBF last week but no details have been shared yet. “I can’t give any details now. Wait for the announcement soon,” says Sharma.

The NDTV lawsuit has acted as a stimulus. “We should approach the issue with a sense of urgency. All of us want right and segmented data so that we make the right buying decisions. After laying out the framework and working out the costs, we will have to nail down the design and the vendor. The only way a new currency can be produced is by working together. Truth serves us best. Partial truth only lands all of us in an unhappy place,” says an expansive Sharma.

Lulla sums up the mood. “We need to wake up and smell the coffee,” he says.

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