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Making sense of boom & the digital puzzle

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As the sun sets on 2005, Tam Media CEO L V Krishan gives Indiantelevision.com his take on the fast changing media scenario in India, what with the impending launch of a couple of DTH services, IPTV, broadband TV and the boom in the telecom sector with the introduction of 3G technologies in the near future. Read on...

We are seeing trends of 2002-03 being repeated today on account of a booming economy. Incomes are going up, living standards too, and this is reflected in the B&W to CTV ratio: where earlier, one out of every two people used to own CTV sets, today; two out of three own one, that is, 69 per cent of homes. This is leading to changes in viewing patterns, and to fragmentation.

Today almost 75 per cent of C&S homes own a remote control, which allows them to zap faster, increasing their viewing options. However, the quantum of viewing is not rising and the pie is being broken down at a faster pace than earlier.

Also, the average family size has declined between 2002 and 2005. This means lesser number of people are watching TV. The range of content today has changed completely and allows the youth, the chief wage earner, elderly members and the housewives to select what each one wants to see. Thus a timetable for TV has started setting in. This timetable is also influencing them to know about new programming, which is sampled during commercial breaks, as that is when all the surfing happens. That's the reason why we are seeing a dip in commercial breaks during primetime viewing, which is increasing annually. Families are on the lookout for watching something that everyone has a common affiliation for.

The implications of this are basically on the kind of marketing and promos that channels are doing. Promos are getting more aggressive and dynamic. They feature newer forms of promo content, not just in terms of the 30 second capsule but in terms of alternate displays, pop ups coming in on regular programmes etc. Cross channel promos are also growing and more than 50 per cent of commercial time is being used on show promotions.

If you look at four week launch GRPs for a TV programme and compare that to a four week launch GRPs for any brand - be it, FMCG, telecom or auto major - on an average the GRP levels for a programme promo are at least three to five times higher than the launch GRPs of a brand.

Agreed, there is a huge revenue loss opportunity for broadcasters but they are ready to sacrifice that to get eyeballs for their shows. Broadcasters are now trying to optimise promos through better rationalisation of spots to get unique eyeballs in terms of effective reach and frequency as well in terms of GRP levels and day parts.

Multiple TV set homes, especially in Northen markets like Delhi, Punjab and Rajasthan, are rising, leading to a further division of family viewing. When you look at data in multiple TV homes, you get phenomenally stark new audiences, which are engulfing channels that are completely genre based in nature: 5:30 am: spiritual / religious channels are watched by the elderly members of the family. The evening band is watched by kids while late night viewing is reserved for adults.

This can happen even in a non-multiple TV set home, but the fact is that in the multiple TV sets homes intensive viewing is happening parallely.

In 2006, the bet is going to be on spiritual and religious channels. We already have nine spiritual channels, which have an over 1.5 per cent market share, accounted for mainly by viewers between 35 and 55 years.

Also, while the news segment has been growing for the past three years, 2005 was the year of kids' channels. Their marketshare boomed 400 per cent from 1.5 per cent to 5 per cent. In certain markets, they have crossed music channels. The question for music channels is: will they be able to draw revenues only from an addressable platform?

Music channels can learn from news providers. In 2005, local and regional icons and events emerged as viewership drivers on news channels. During the Mumbai deluge coverage, all eyes in Mumbai hooked onto news channels but the rest of the country did not. Ditto with the Delhi blasts where news channels viewership shot up in the capital. Also, when Sania Mirza played, Hyderabad was rocking in viewership.

So if channels can tap local icons and make them look big, they are going to get viewership surges. This is what music channels have not exploited as none of them has gone out and searched for local talent.

For sure, localisation is going to drive in revenues too. Print and radio's Top 10 advertisers feature local advertisers like independent retailers, real estate, educational institutions, coaching classes etc. So even from the advertising perspective, it makes sense for channels to localise.

DTH can allow that localisation to some extent. We are set for a strong digitalisation of the upper end segment. My worries here are on two issues: one is how will growth take place and the other relates to infrastructure, which is not the focus for the industry at all.

If there are 110 million Indian homes, which don't have a TV set, it is not because they can't afford one but because they know that it is worthless with the power fluctuations and load shedding. Broadcasters should set aside 10 per cent or Rs 5 billion of all annual revenues of Rs 50 billion for developmental purposes and give it to government to create infrastructure, especially, power supply.

If power can come in along with roads and transportation, the economy which is growing at 8 per cent can hit double digit growth. That, will lift the broadcasting industry by 100 per cent more than what it is growing at today.

Also what broadcasters are not realising, is that digitisation is fragmenting existing audiences. By digitising, you are delivering 200 channels instead of 10. Today, 85 per cent of viewing is on 27 odd channels and if you look at advertising, 90 per cent of it is also on those channels. You are further fragmenting this with broadband, IPTV and DTH. Hence consumption time on each channel is going to fall and the cost per contact is going to go up. Advertisers don't have the wherewithal to actually kick in that extra money. It's new advertisers who are bringing in the boom and not existing ones. And will that many new advertisers crop up?

The only way forward is for advertisers to tailor make new products, which are not mass, but targeted at niche segments. The other possibility is that broadcasters themselves become brand marketers because they anyway understand consumers.

We were testing how to measure the digital market with digital peoplemeters. While we could still measure DTH and broadband from day one, the real challenge is going to be in the second phase of digitisation where Trai and the government will open up unified licensing and allows licenses to be purchased for 3G in the telecom sector.

Also, private telcos will start delivering video sometime in future leading for interesting times. India has a very large youth and kids segment who are comfortable with gizmos. We are going to see adoption rates for these technologies with the right kind of content, faster than those we've seen for the remote control, cable TV or DTH.

Another aspect is the jump in radio. The only drawback is that it has still not innovated the way TV has. The bulk focus is still on music. For example, Star One's The Great Indian Laughter Challenge can be a fantastic property when retro-fitted to radio. Although radio ad revenues have grown 45 per cent, the real growth has still not come.

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