News channels under lockdown burden

They believe the extension of lockdown may impact news business adversely

MUMBAI: The extension of nation-wide lockdown has affected the business of news broadcasters which are burdened with increased operating costs and less advertisement revenues.  

The government has put the news channels under the essential services category. Going forward, the news channels will face the daunting task of sustaining operations with little or reduced ad revenue. The operating costs are the expenses for the maintenance and administration of business on a day-to-day basis.

Asianet News Network chief operating officer Abhinav Khare is of the view that the extension of lockdown may impact the news channels’ business adversely. “From 30-45 days earlier, the network now is running on exceptional 90-day working capital due to this unprecedented virus situation.”

“Revenue collection has become a massive issue for news channels and they are likely to face cash crunch issues sooner or later”, Khare says. “The advertisers are not able to pay news broadcasters immediately as their businesses are not operational due to the lockdown.”

The lockdown, in a way, has come as a blessing in disguise for the news channels as they have been able to cut down on the operating costs of news channels. “Reporters don’t have to go out for reporting like they used to do before; they do stories digitally. Guests are joining shows virtually. Transport costs have also come down as employees have been asked to work from home,” a source from a leading Hindi news channel says.

“Operating costs are currently manageable and measures to curb it will only be decided once this extended lockdown ends,” says Mathrubhumi News chief executive officer Mohan Nair. “With Kerala likely to be re-opened partially from Monday, there are chances that the situation may get back to normal.”

Nair believes that it would be too early to predict anything about the future course of action with respect to the network’s business. “This is indeed true that we are unable to get advertisers on board, but expect that operating costs would normalise with the situation returning to normal.”

Concerned about high operating costs amid the lockdown, News Broadcasters Association president Rajat Sharma has written to the central government either to reduce, remove or bring the goods and services tax in line with the print media industry. GST on advertising for the broadcasting industry is at 18 per cent and for print media it is at five per cent.

ABP News Network chief executive officer Avinash Pandey says: “In terms of COVID-19-related programming, we have taken numerous initiatives and introduced innovative line-ups on all our news channels. These specially curated shows have garnered tremendous viewership and we have roped in sponsors for our channels.”

Pandey, however, indicated that there won’t be any retrenchment or salary cut in order to reduce the operating costs. He believes that once the crisis is over, the network will be able to come back stronger with its strong content and programming line-up.  

Brand and agency experts believe that despite high viewership, news channels are unable to attract maximum advertisers due to the substantial reduction in overall ad spend. They have been re-working their advertising strategy due to the COVID-19 situation.

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