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IDOS 2014: News broadcasters still struggling to make money

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GOA: The news television industry has been witnessing losses for several years now. To throw some light on what are the hurdles and what needs to be kept in mind while forming regulations, NDTV vice chairperson KVL Narayan Rao, Times Television Network MD and CEO MK Anand and BBC World News India COO Naveen Jhunjhunwala took the stage at IDOS 2014 for the session ‘News Television- a specialised beast’ that was moderated by Castle Media founder Vynsley Fernandes.

The session took off with a keynote from industry veteran Rao, who spoke of the issues facing the most competitive news industry. “News has always been a high cost, low return industry and since 20 years, there has been an unholy dependence on advertising revenue in an environment that doesn’t seem to be changing,” he said while adding that one needs to consider the importance of news in such a landscape. “Not a single news operator in this country is making money,” he stressed.

The recent extension to digitisation has also not gone down well with Rao, who just this week stepped down as the president of the News Broadcasters Association. “Digitisation was to finish by this year but has been extended till 2015 and 2016. To say the least, I am very disappointed with this decision,” he said.

As far as regulations are concerned, he says that content should always be kept separate from carriage. “The business environment that we are operating in is one where we pay a large amount of money as carriage fees. For most news broadcasters, one third of operating cost goes as carriage fees while 90 per cent of revenue is generated from advertising and in some cases 100 per cent. All news broadcasters today pay a large amount as carriage fees and it is a terrible burden that we find impossible to bear,” said he. All the stakeholders must see the way the news channels operate and not look at regulations in isolation.

News channels during primetime end up showing only panel discussions because of the lack of resources. The western countries have subscription revenue of up to 60 to 70 per cent. All these issues were meant to change after digitisation with subscription revenues kicking in and carriage fees eventually coming down. However, Rao hopes that the new government helmed by Narendra Modi would do all it can in its new ‘Digital India’ plan.

He spoke of the statement by the Editors’ Guild regarding denial of access to journalists by government and increasing number of significant government authorities taking to social media to give information. He says that this serious issue needs to be addressed since news is not about press releases but rather about ‘ferreting information out’.

Adding to the issues faced by the industry was Anand. He said that the last six months have seen a loss of collective bargaining due to the deaggregation paper by the Telecom Regulatory Authority of India (TRAI). “The paper has hit news broadcasters and unless one diversifies into entertainment, it is difficult to survive,” he said. In order to make money, the idea is generally to go heavy on branding and marketing and create an aura around the channel. The lopsided ad sales revenue also adds to the woes.

Jhunjhunwala said that the BBC has been broadcasting news for decades and the technological advancements have allowed it to make it smoother and more cost effective.

The ad cap has also hit them hard by restricting advertising air time to 12 minutes per hour. Here, the panel agreed that there are times when channels go live for hours without showing any ads and there is no provision to make up for the lost time. Fernandes questioned that in such a scenario, could there be alternative sources of revenue that can be put into use.  Rao said that now, to monetise news one needs to generate revenue through different streams such as sponsorships and associations. “But how can you not have subscriber revenue?” he questioned.

Fernandes then questioned if there should be a limit on the number of channels that exist to which Rao said that the government should not curtail the number of channels because it is a free market. However, he feels the politicians and political parties should not be allowed to be in news.

Anand said that the regulator could think about regulating carriage fees with some focus on news channels. He also pointed out that a decade ago, ad spots on news channels were sacrosanct but today it is being sold at one third the rate.

Jhunjhunwala said that the government could look at raising the FDI limit on news to bring in more investment. There were talks of raising it to 49 per cent but no one has addressed the issue.

Rao finally concluded by saying that though the digitisation deadline has been extended it will hopefully iron out things.

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