It has been three months since Delhi, Mumbai and Kolkata switched to digital television signals, kicking off the first phase of cable digitisation in the country. Finally, broadcasters have a level playing field. Their content will be the distinguishing factor and the consumer will be the real king. Brandwagon gets broadcasters across the spectrum to interpret the first signs of change in viewership trends and what they mean for the broadcast industry and the brands that ride the popularity of different TV channels.
FINALLY! No more cable TV. Well, almost. With cable digitisation in the metro cities of Mumbai, Delhi and Kolkata, the sun has pretty much set on traditional analog connections. Approximately 90% of the households in these cities are now completely digitised.
This move has caused a lot of changes in the overall television industry. From viewers to broadcasters and advertisers to media planners, everybody now needs to change along with the change that is digitisation. With new channels and newer target audiences, media planners now need to re-invent their strategies in order to incorporate the opportunities that are being made available to them.
Here are some of the changes that are already evident: Post the introduction of digital addressable system (DAS), there has been a drop in the number of channels that have a 100+ gross rating points (GRP). This means that some channels that earlier enjoyed a higher rating are now losing out. There has also been a decline in the number of channels that originally delivered zero television viewer ratings (TVRs). Amongst all genres, the English general entertainment channels (GECs) have come forth as the highest gainer clocking a 45% growth. This brings into light the fact that the English GEC genre has achieved more relevance after DAS.
With digitisation, the entire market has been thrown open to all the players. What we now have, after long last, is a level playing field. No longer is it a monopoly of a handful of channels.
The channels that have ruled the roost for the past decade or so, legacy leaders in other words, will now be at par with other channels as digitisation has all but wiped the slates clean and given everyone a fresh start. For media planners, this translates into a wealth of new opportunities. While for consumers, it means a plethora of options being made available to them, and they seem to be making newer choices.
Another aspect that has come into lights is this phenomenon called audience fragmentation. The need to recognise who your immediate target audience is and concentrating all efforts towards catering to them with the content that they appreciate has become more vital now.
Earlier, with fewer channels, viewers did not have too many options, so they had to make the most of it and watch what was available. But now with the number of channels that are on air literally going through the roof, viewers are spoilt for choice.
This means that with so many channels in the running, viewers can take their pick and finally, content is the real king. And if you want to maintain viewer loyalty, your content needs to be top-notch.
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Digitisation has also done a good turn to brands and advertisers by intensifying audience fragmentation manifold. It has now made it easier for brands to identify their target market and focus solely on them. This leads to better connect and reach with the consumer and a greater return.
As tried and tested formulas of English music and infotainment channels seem to be shrinking, planners need to look at how to employ a better channel mix. This is a fallout of smaller, more niche channels growing exponentially. As fragmentation of viewership is increasing, there are a slew of ?niche? channels that are now stepping into the limelight with their tailor-made content that is aimed at a specific set of audience.
While niche channels such as English GECs are focusing on the premium amongst us, channels that have previously catered to mass audiences successfully are skewing even more mass and striving to achieve viewer loyalty. Channels are coming up with newer specialised formats and, guess what? They seem to be working too.
Premium niche channels such as English GECs seem to be gaining on the fronts of reach as well as time-shifted viewing (TSV). With the highest growth percentage of 45%, English GECs are leading in growth, after DAS. BIG CBS Networks too has garnered a 25% increase in its TSV. At the other end of the scale, niche channels that cater to the masses are also set to grow after DAS. These niche channels are going all out in concentrating on a particular target audience.
This shows us that there is an audience out there that not only appreciates good content but also knows what exactly it wants to watch.
In conclusion, with the opportunities now available, broadcasters, media planners and advertisers alike need to reinvent themselves in order to reach out to the right set of audience and unlock the real potential of each channel and its reach.
The writer is CEO, Reliance Broadcast Network
Top executives of six broadcast companies list the unique benefits that cable digitisation has brought the television industry and identify the challenges that await them
Man Jit Singh
Men?s special
From Hindi lifestyle channels to general entertainment, get ready for a lot many new programmes targetting men
The first phase of implementing cable digitisation is almost over, and for completion of such a mammoth task, all the stakeholders should congratulate each other. In the first phase, each individual home which till date only had a wire connected to the television set, now has a wire and a set-top box connected to it. The shift from analog to digital has taken place, and by February 1, 2013, cities such as Kolkata where analog is still active in a few places will also follow suit.
In case of general entertainment channels, the total viewership has dropped very little, and mainly because sampling share of smaller/ niche channels has actually increased. This is due to the fact that a viewer can now easily select a new channel as it is sorted based on the genre it operates under. For example, under the section ‘Entertainment’, channels are further sorted into three categories, English, Hindi and regional, which makes the task of selecting a particular channel easier. Also, another factor which worked as a trigger for sampling is that analog cable only had the bandwidth to show 90-100 channels whereas digital cable provides a bandwidth to telecast 500 channels. This means that a consumer gets a wider choice when it comes to content as compared to what was there earlier. It is expected that sampling is a short lived phenomenon and will take about six to eight weeks time to settle down after which, viewers will come back to their staple food, that is, general entertainment channels. Also, about 3-5% of homes in Delhi and Mumbai had gone dark after the October 1 cut-off, but even these homes have been gradually converting to digital and with this the entire universe will get covered.
The other side to the coin is that the increase in sampling of niche or new channels has opened a window for many broadcasters to introduce differentiated content and, going forward, we will see a lot more channels getting launched with new offerings. For example, programmes on general entertainment channels (GECs) are mainly skewed towards women, which leave men with limited options. Therefore, in the future, broadcasters may launch entertainment channels for men which are based on action/ adventure. Then there is also a high chance that broadcasters will introduce Hindi lifestyle channels as an answer to English lifestyle channels. This kind of channels will have content ranging from fitness to travel to cooking, etc. MSM group is also looking at launching various niche channels.
Finally, the industry was expecting to see the elephant called, ‘carriage fee’ decline with digitisation, but it did not happen to the extent it was expected. With the first phase, most broadcasters saw 15-25% reduction in carriage fee, rather than larger declines as broadcasters pledged to support the multi system operators (MSOs) in ensuring the economics of investing in boxes. Broadcasters adopted a phased approach to reduction in carriage fees that will span over a period of two or three years. Broadcasters expect that after three years, carriage fee would drastically decrease because by then MSOs will be billing the homes directly and will have secured the necessary return on investment in set-top boxes.
With the first phase finally coming to an end, the industry is now gearing up for the second phase which will cover 38 cities in 15 states, with the pre-set deadline of March 31, 2013. We carry forward many learnings from the first phase and will therefore take adequate steps to ensure that set-top boxes gets seeded on time. For the broadcast industry, the real change will come only with the completion of the second phase, as by then digitisation of cable would have achieved a critical mass ? a time ripe enough to take major new initiatives in providing viewers new programming.
The writer is CEO, Multi Screen Media
Sunil Lulla
Play for profits
The broadcast industry must stop being a social services sector providing best-in-class information and entertainment, but worst-in-class prices
The set-top boxes (STB) have been seeded, but digitisation is yet to take off. Delhi and Mumbai are the two big cities where the penetration of STBs is significantly high, while in Kolkata and Chennai the transformation has not yet taken place. Digitisation is all about empowering the viewer by giving her the power to choose which channel she wants to view. This will also drive subscription and create transparency, as multi system operators (MSOs) will bill homes directly. Therefore, it will finally create an upside to this form of revenue stream, which broadcasters haven’t really seen much of till now.
The industry has been burdened by carriage fee for many years and as digitisation became a reality, it was expected that this burden would reduce by more than one-tenth. While the industry did witness some reduction in carriage fee, it was not as much as it expected it to be. One of the reasons for this could be the fact that not every one has been provided with the bandwidth to carry all 500 channels. It is an agonising teething problem for the industry. The broadcast industry has itself created the unfortunate habit of low subscription pricing. New choices will change this. We must stop being a social services sector, which provides best-in-class information and entertainment, but worst-in-class prices.
One of the big upsides so far, is that MSOs, local cable operators (LCOs), and broadcasters are learning to work together. The ministry of information and broadcasting and the Telecom Regulatory Authority of India (Trai) have both played a very proactive and useful role in ensuring that the process of cable digitisation begins. Now MSOs have to come up with interesting channel packages, bill homes and establish robust transaction relationships with LCOs, viewers and broadcasters.
It’s a good beginning. The game has begun in Mumbai and New Delhi, while in Kolkata it?s been delayed and in Chennai it?s been washed out. The match has to be played out, so let the game begin. Steps have been taken in the right direction, but it is a long walk from here.
The writer is MD and CEO, Times Television Network
Rahul Johri
More on the plate
Digitisation will bring in innovative programming in tune with viewer preferences and also improve average revenues per user in the bargain
There?s little doubt that digitisation is the biggest event that the Indian television industry has seen in a very long time. The rollout in four metros has been partially implemented and it will be an all-round success soon. The regulatory push on digitisation and consequent rise of digital platforms has opened up a plethora of possibilities and benefits for viewers, broadcasters, affiliates and the government. This transformation has ushered in a new era in the Indian television industry, marked by enhanced television viewing experience, wider choice, value-added services, systemic transparency and increased revenues for the government and broadcasters.
If the leap from a handful of channels in 1995 to over 800 channels today seems significant, the next spurt in channel growth will be far bigger and game changing. TV viewing will move to the next level as bandwidth will no longer be a constraint for broadcast. The scope of television production and the quality of transmission are bound to improve in leaps and bounds. It will also provide the finest viewing experience due to its superior transmission technology.
Digitisation promises enhanced value to the broadcaster. It will allow a better understanding of viewers? habits and preferences and the opportunity to introduce refreshing and innovative programming. Importantly, it will improve average revenues per user (ARPUs) further taking the industry to new heights.
Advertisers will find this emerging scenario attractive. With more sharply defined viewer segments available, advertisers and media planners will be able to target their end consumers more effectively based on content, viewership and distribution reach of a channel.
By freeing up bandwidth, digitisation will encourage launch of more unique content channels. And, even as the share of locally produced content will rise, international content will generate its true potential. It will enhance the production quality and ultimately the entertainment quotient.
It is quite certain that only the networks that offer distinguished and highest quality content will succeed. As a case in point, when data was released by TAM post digitisation for week 44-52, Animal Planet witnessed a phenomenal increase of 40% in its channel share. The channel share of Discovery Science went up by 134% (Source: TAM, CS 4+, All India, All Day, Channel Share, Week 44-52 vs Week 1-43).
The popularity of digital technology will also boost the penetration of HD channels. This, in turn, means that channels will be able to transform the viewing experience for millions of TV viewers in India, thereby creating far greater value in the chain. Discovery Networks, a beneficiary to this trend, leveraged digitisation by launching Discovery HD World, India?s first gold standard 24-hour high definition channel, in 2010.
India is a young country. Viewers have immense curiosity to explore the ?new?. Growing affluence, availability of advanced television sets, improvement in production quality and an inherent demand to access and use the global best has allowed viewers to become increasingly discerning. Indian television industry is set for transformation on all fronts ? content, viewership trends, transmission platforms and overall viewing experience. Digitisation will further fuel this change.
The writer is senior vice president and general manager ? South Asia, Discovery Networks Asia Pacific
Krishnan Kutty
Spoilt for choice
Given an opportunity, consumers will consume more content and will consume diverse streams of content
The flaws in the analog cable television environment from the perspective of the economic distortions that it created have been well documented. The essential issue was that 80% of the revenue collected from the ground for cable services was kept by the local cable operator with the investor in content (the broadcaster) and the investor in infrastructure (the multi system operator or MSO) fighting over the remaining scraps.
What has been less well understood is the consequences of this distortion on the way television channels were offered and consumed. There was a complete disconnect between the MSO and consumers in the provision of services. MSOs that were focussed on monetisation had only one way to grow revenue ? sell their frequencies to the highest bidder.
This benefited incumbent businesses such as Star, Zee and Sony and a few categories such as the news genre. It also led to consumer offerings being dominated by a few categories with genres such as kids entertainment, infotainment and English entertainment being marginalised.
The entire industry is pinning its hopes on cable digitisation. With Kolkata and Chennai facing some hiccups and cable operators not having yet rolled out tiered consumer packages, it is early days to make definitive conclusions on how consumers will behave. However, the consumer behaviour we have seen so far gives us some interesting early indications:
Higher number of channels consumed: The number of channels that consumers are viewing has jumped significantly from around 14 to 21.
More categories consumed: The number of new categories that viewers are consuming has seen a spike with categories such as English movies, kids entertainment and infotainment seeing a jump in viewership.
Higher degree of experimentation: Channels such as Fx, Fox Crime and Zee Classic which were not traditionally distributed in analog are seeing increased sampling.
Logical channel offerings are changing consumption: Most cable operators now offer channels through genre based channel sequencing. This is unlike analog businesses where channels numbers were randomly sequenced. This has led to a significant jump in intra-genre consumption. For instance, in the English movies genre, only 20-30% of consumers of Star Movies watch another English movie channel, in digitised Mumbai and Delhi that has spiked to 50% of consumers.
We are thus seeing, that given an opportunity, consumers will consume more content and will consume diverse streams of content.
So can we look at these findings as firm indicators of the way the market will evolve? Perhaps, but with a note of caution. MSOs in these markets have not started tiering channels when consumers will have to pay extra for these new categories and channels.
Also, these are early days. The consumer is like a kid in a candy shop who is trying out various flavours he has never tasted before. Will that settle eventually? Yes, of course, but I believe it will settle into a completely new paradigm of viewership.
What does all this mean for entertainment consumption? I think we could see significant upheaval in content consumption as digitisation spreads. Analog delivery is significantly poorer in smaller towns. So, as they turn digital the scale of change could be even more significant. Channels and categories which have used the structure and distortions of the analog market to their advantage could see a significant correction moving forward.
However, overall the indications are hopeful for the industry. We, at Star, believe the businesses that will succeed are the businesses which maintain their focus on content and creativity, which is why we believe we are well-positioned for the future.
The writer is executive vice president, distribution, Star India.
Nina elavia jaipuria
No kidding
With digitisation ushering in distribution parity, there?s been a 10% growth in the kids channel category as children discover a whole new set of offerings
Digitisation is a bold step that has and will continue to have significant impact on the media and entertainment industry and have a far reaching impact on its constituents, be it broadcasters, local cable operators (LCOs), multi system operators (MSOs) or direct-to-home (DTH) operators. We are already witnessing the benefits of the first phase of the rollout. This has benefited not just the media and entertainment industry, but also viewers at large.
The interesting eventuality of digitisation is distribution parity. This will ensure that every channel will have an equal opportunity to get sampled by the viewer. With distribution parity, content is now the king, as it is the only factor to keep viewers glued to a channel amongst the vast options available. There will indeed be a renewed focus on content quality, thus enhancing the TV viewing experience.
With digitisation the issues of viewers? reception quality has been addressed. The digital platform has improved the quality of audio and video reception through the set-top box.
A big change in the digital era is the way viewers will navigate through the channels. Post digitisation, the ?neighbourhood? problem has been resolved as all channels from a genre are clubbed together. A viewer can choose the channel that he wants to watch from the genre cluster. Special interest channels such as channels for kids will have an edge in the digital era as it will now be easier for kids to navigate to their favourite channels. Thanks to this, kids have discovered a whole new set of offerings for them which has led to increased viewership and a 10% growth in the kids channel category after digitisation.
Kids will now have a plethora of channels that are customised for them. With a level playing field in terms of distribution, kids will now have equal access to all such offerings. While content differentiation will take the lead in creating preferences in the digital era, marketing will now play a vital role and it will be interesting to see how marketers create awareness about the differentiated offering on their respective channels and push sampling. Marketing to kids will be more challenging as marketers will have resort to innovative communication through above the line (ATL) and below-the-line (BTL) touchpoints to constantly feature in children?s preference set.
Substantial increase in subscription revenues leading to positive distribution return on investment (ROIs) in the digital era will have a positive impact on broadcasting businesses. This in turn will lower the dependence on ad revenues. This is one of the biggest reasons why new entrants such as Disney Jr. and Nick Jr. are currently advertisement free. New businesses will also hugely benefit from the low entry cost. With enhanced ROI, businesses can now focus on content creation/ acquisition and brand initiatives which were earlier difficult due to shortage of funds.
Digitisation will also enable genre, demographic and geographical segmentation. This will encourage broadcasters and businesses to launch new channel offerings to plug specific need gaps. We have already seen a slew of new entries in the kids category – Discovery Kids and ZQ in the edutainment space, Disney Jr. for pre-schoolers and Nick Jr. with a proposition of ?the smart place to play? for pre-schoolers. Sonic channel which targeted boys was launched to deliver their favourite dose of action and adventure.
Despite fragmentation and new offerings in the media and entertainment industry, the kids category (4-14 years, boys and girls) has grown, thanks to the tailor-made offerings that have been especially created for them. While kids continue to retain their fair share of the remote, we hope to see a similar growing trend in the second phase of digitisation with more good quality content being offered to them.
The writer is executive vice president and business head ? Kids Cluster, Viacom 18
Prasana Krishnan
Change the game
Sports broadcasters will now opt for a balanced portfolio of sports instead of the completely cricket centric approach seen till now
Digitisation has aided the sports genre by removing the constraints of analog cable, which only allowed 90-100 channels to be viewed per television set, allowing sport fans consistent access to their favourite sports. This is a major positive both for the industry as well as the fans. While the full impact of this is still to become evident, the initial signs are very encouraging. Sports as a genre is witnessing a good spurt in reach in the digital markets. We believe this trend will continue and gather steam as digitisation picks up pace.
Digitisation has brought in transparency with respect to the number of households subscribing to channels which in turn would lead to a surge in subscriptions. This is similar to how the direct-to-home (DTH) industry witnessed growth and the story will get replicated in the digital cable environment.
As far as the role played by digitisation in terms of boosting television ratings is concerned, we will have to wait and watch as the process is still in its early stages. Phase one is yet to be completed in all the targetted markets and I think we would get a more wholesome idea on the impact on ratings once the second phase is under way.
One should not forget that sports as a genre is primarily driven by ?appointment viewing? where viewers tune in when live sports/events of their choice are being telecast. Unlike general entertainment channels, sports channels witness a huge surge in viewership during live telecasts as compared with viewership in other periods. Consistent availability of sports content would power the growth of sports amongst fans but this growth would be mainly around live telecasts and not just viewership in all parts of the day.
In the last few years, India has been witnessing a steady growth in viewership for other kinds of sports such as football, hockey, tennis, golf and badminton. Although the base numbers for these sports are still relatively small, the growth rates are very encouraging. Cricket seems to be suffering from some level of viewership fatigue as evident from the ratings of some recent cricket series. These other sports will continue to see good growth in the coming years.
Lastly, a key contribution of digitisation is in making the delivery of other sports feasible, and this is leading to a massive surge in investments by sports broadcasters in sports such as football, hockey, golf, tennis and badminton. I expect that this trend will continue and sports broadcasters would opt for a balanced portfolio of sports instead of the completely cricket centric approach.
The writer is COO, Neo Sports Broadcast
