India’s big news television networks are going through a major ‘cost-rationalisation’ phase due to internal factors as well as the larger external economic and regulatory climate. This is changing the nature of the newsroom, and has generated fears of retrenchment among employees. It has also led to tensions between the industry and the government.
NDTV CEO Vikram Chandra said these were “challenging times.”
Broadcasters had hoped digitisation of cable television would remove multiple intermediaries, enable greater choice to consumers, and crucially, improve their revenue. “But carriage fees has not yet gone down to the extent we had hoped, and neither has additional revenue from direct subscription started coming in adequately. So we are heavily dependent on ads,” Mr. Chandra said.
But the ad-pie is not growing due to the external economic climate, with companies slashing ad-budgets.
An industry source complained about how ad rates have not grown despite broadcasters expanding viewership.
Investors were also unwilling to pump in money into the media, “till after the elections.”
The ad-game and ‘12 minutes’
The ad question is closely linked to the Television Audience Measurement (TAM) system, whose accuracy has long been questioned by broadcasters. TAM expanded its sample size to towns below population of a lakh, but this revealed erosion in the viewership of big networks.
Seven big channels — commanding over 70 per cent of viewership — walked out of TAM in June. It has now been decided that viewership will be measured in absolute numbers, in thousands, rather than rating points.
TV companies have returned, but are not fully satisfied. The entire process disturbed the balance between networks and advertisers.
If getting ads was not difficult enough in itself, say broadcasters, the decision of the Telecom Regulatory Authority of India (TRAI) to enforce a rule that allows only 12 minutes of ads per hour will ‘hurt’.
TRAI has said it is merely implementing a rule that channels signed up to when they got the licence, but have only observed in breach.
Channels have now agreed to bring down ad time to 20 minutes per hour, and then reduce it to 12 minutes from October 1.
“The government could have waited for benefits of digitisation to start coming in and other revenue streams opening up before implementing this,” says Mr. Chandra.
Speaking on the condition of anonymity, one candid network head flagged another factor. “We over-spent when the going was good. Now the chickens are coming home to roost.”
Critics have long criticised the unsustainable ‘top-heavy’ models of some TV channels, which spend beyond their means.
As a result, channels are now being forced to become “leaner.”
Network 18 — which owns CNN-IBN, IBN7, CNBC, Firstpost.com and other platforms — is in the middle of a transition. The concept of integrated newsrooms —– where journalists are being tasked to report across multiple mediums, different languages, and in real-time for the web — is becoming a reality. There are concerns that this will make many reporters redundant.
It recently announced the appointment of a new editor-in-chief for the Network’s business newsroom. The exit of four top editors of Forbes magazines, published by the network, is also being attributed to this move towards a common newsroom.
Unconfirmed reports suggest possible renegotiation of contracts with primetime show hosts, and employees are uncertain about future prospects.
When asked if this would all lead to retrenchment, an industry source said, “We don’t know yet. But when there is a crunch, the axe first falls on human resource and news-gathering expenses.”
Mr. Chandra said his network had taken some “tough decisions” to remove the “inefficiencies.”
NDTV shifted its major Mumbai bureau operations to Delhi sometime ago, while phasing out many employees.
Asked if business channel NDTV Profit was on the verge of closure as being speculated, Mr. Chandra said, “Far from it. We are totally revamping and relaunching the channel.” He also clarified that there were no ‘mass retrenchments’ in the offing.
While many of these issues are internal, the industry appears to feel that the government’s approach is not helping.
Taking pains to clarify they have no “complaints,” general secretary of the Indian Broadcasting Foundation Shailesh Shah listed out issues where things could have been done differently.
“There could be more efficient use of technology and digitisation. Two, things like the 12-minute rule will stick if the industry involves itself in a better dialogue with TRAI that works for everyone. Three, on content issues, we would like the government to recognise the diversity of the country, multiple audiences, and allow for freedom of expression. And four, there are tariff and taxation issues that need to be sorted out.”
Mr Shah said the government must ensure that regulation did not impede growth.
