ITV

Category: Year Enders

  • ‘An outlook towards the future of Television’

    In this article, penned for Indiantelevision.com, Media e2e chief evangelist Atul Phadnis is of the view that the media landscape is changing rapidly and new distribution technologies would alter business models.

    As 2006 comes to an end, some of us, who had embarked on a new journey of creating a new thought within our industry, feel vindicated. The key changes that we had envisaged, envisioned and expected are taking place rapidly within our media & entertainment (M&E) environment. These changes are in terms of distribution platforms, newer business models, interactivity, new content formats and experimentation. This piece looks at the change catalysts and an outlook on how things would continue to develop within our space.

    End of distribution platform insulation

    Before we look at the current and future, a quick glance at the past. The history of TVs popularity among consumers can be gauged from the amount of advertising on satellite TV chasing consumers. As veteran industry folk would recall, the early 90s was all about DD when only experimental advertising monies would come onto satellite channels. In the mid-90s substantial chunks of budgets were diverted into satellite channels. By the late 90s and early 2000s, the satellite TV environment had reached a level of stability and maturity. Here’s where the story takes an interesting u-turn. The legislation changed and allowed newer distribution technologies on the scene. These new technologies ended the technology insulation that persisted in India vis-?-vis other Asian markets like Hong Kong, Korea and Japan.

    Distribution: set to change the ground rules

    Globally, whenever distribution channels explode, it sets off a chain reaction in terms of market segmentation, newer revenue opportunities, newer pricing models. The hectic activities since early 2000 to present day on laying cables, dishes, optical fibre, upgrading cable facilities, are today creating competition among satellite TV platforms such as DTH, HITS, IPTV, CAS, and even traditional cable.

     

    Creating the ‘Long Tail’

    For those who have read Chris Anderson’s book The Long Tail: Why the Future of Business is Selling Less of More (2006) would immediately associate that phenomenon with what’s happening with our television today. The Long Tail phenomenon occurs when distribution platforms become very large helping the smaller products collectively gain market share rivaling that of market leaders!

    The TV business has been growing a long tail as niche content offerings are getting acceptance in small pockets. Take the example of television news. Already, the kids channels are going the same way as the news channels. Animated, non-animated, teens, tweens, pre-teens! The good news – each of the niche segments that have been launched has shown Viewership.

    If the current trend continues and if distribution platforms get more and more addressable, one can imagine channels aimed at extremely niche communities. Surgeon’s channel, lawyers channel, chartered accountants channel to weather news channel, celeb news channel to even a Mumbai traffic channel! Considering that some of these formats exist in other economies expecting that in our environment seems fairly reasonable.

    Specialization to Segmentation

    The specialization in this industry is already segmenting the market. Groups of consumers who are watching specialist programming are extending the long tail of content. The specialist content has an impact on TV programmers and the TV production houses as resistance to experimentation could lead to certain death or marginalization. This impact should mostly be felt immediately post the universe adjustments of the TV ratings panels to latest estimates.

    Applications, on-demand

    Our environment is also critically poised to propel demand for applications that satiate this new consumer thirst for content which is typically instant and on-demand. Considering that for a bulk of Indian consumers, TV-watching emerges in the Top-5 daily activities, it’s not impossible to imagine the lengths to which consumers could go to better that experience. Gadgets like Digital Video Recorders (DVRs), Video on Demand (VoD), Personal Video Recorders (PVRs) can do exactly this if the pricing gets it right.

    Content mobility, malleability

    The consumer need for on-demand content in other Asian markets has made content both mobile and malleable. Content mobility is to do with being able to record and transfer content off television onto your phone, laptop or desktop. The last few months I have been an amazed, animated user of Bluetooth and the possibilities that emerge from being able to transfer data, music, and video from one device to another. Content malleability is something that TV, music and film companies would have to learn else the consumer is going to teach them a thing or two!

    Newer contact points via localization

    The newspaper business in the last 3 years has been growing faster on ad revenues than television. It’s done so on the back of distribution changes and reform that has resulted into micro editions. That has in turn propelled localized advertising through a slew of first time advertisers on print. The same is bound to happen to television. The only question is the timeframe. Local pizza stores, restaurants, banks, grocery and electronic retail, multiplexes would all jump in if micro-reach was possible via TV. It’s not as if all that is not possible today via local cable and regional stations. It’s possible and it’s happening. But while regional channels still score, there are questions on quality and popularity of local cable advertising.

    Branded Entertainment : winds blow stronger

    The Branded Entertainment Awards 2006 held in Mumbai have demonstrated a new industry-wide vision in this space. The promise that this specialist stream holds is that in a perpetually fragmenting media scene, TV could be used via innovation, integration and multimedia support. Activation is the powerful new word in this area and it’s expected to be initiated by regional channels. Activation would derive tremendous strength either from channels promising micro-reach or distribution platforms undertaking sampling/ contact programs. One of my recent favorites is a DTH company distributing sample set-top boxes to school children preloaded with education channels!

    Distant possibilities

    What seems to be now distant in our market but is very prevalent in the West and some parts of Asia is CGM or Consumer Generated Media (such as Blogs, and home or personal videos). This is a current rage even in the US if one is to see the popularity of sites such as YouTube. Low penetration of capture devices in India would typically see this as fairly futuristic. Having said that we are seeing news channels in India currently test this through Viewer reported stories.

    Finally in conclusion – expect key changes in television that’s bound to affect all stakeholders. These changes are expected to alter business models, revenue models as well as content formats.

    And the creatures aren’t too far away from us now. Stop! I hear the door creaking open. Wait! I can hear them growl…

  • ‘Consolidation good for the sports broadcasting business’

    ‘Consolidation good for the sports broadcasting business’

    2006 has been a rocky year for sports broadcasters. Cricket properties were acquired at humungous prices, SET India decided to walk out of bidding wars, Harish Thawani made his entry into the broadcasting arena and Zee bought 50 per cent in Ten Sports.

     

    ESPN Software India MD RC Venkateish offers his views on the consolidation in sports broadcasting, the challenges broadcasters face in pushing sports other than cricket, the need to come out with sports entertainment programming, and the Cas issue.

     

    Over the past few years we have seen a proliferation of sports channels but 2006 was a year when we saw consolidation. You had Zee buying a stake in Ten Sports while Sony opted out of sports. Nimbus is also in the process of aligning itself. This happened because earlier you had an unsustainable situation where a lot of people jumped onto the sports bandwagon thinking that it was an easy play.

     

    People have realised that it is not that easy to run a sports channel. This is because of the kind of skill sets that are required, the capabilities that are required and also the kind of investments that need to be sustained.

     

    Going forward you will see moderation in the sports business. You will see the crazy escalation in rights prices starting to cool down a bit. People are starting to get more realistic. In terms of overall developments of the business, consolidation is good.

     

    You earlier had smaller players jumping in and bidding the rights prices to crazy levels. There was a destabilising factor in terms of asset valuations. When asset valuations reach a ridiculous level you are bound to have a correction. This sort of a boom-bust cycle is not good for anybody’s business. People who tried to take acquisition prices up, have realised that it is not an easy game to play. Now the players who are standing are serious and committed. The environment is stable with players who are in it for the long haul and looking to increase their brand equity rather than a quick fire in and out situation.

     

    Consolidation means that the model of let me set up something sell it and get out is gone. A stable environment will allow the players to invest in broadcast quality, programme content. We can focus on better quality of coverage for the viewer rather than saying,”Hi I am blowing your brains out on the rights acquisition costs.” From a five-player field it has been reduced to three and possible eventually to two.

     

    Sports Entertainment

     

    Sports is entertainment. There are wrap around shows around content. What we have sought to bring to the viewers is 360 degree spectrum of sports. We have always had magazine programmes, informative shows. We recently launched a lighthearted programme revolving around sports. The main theme, though, will always be live sports. Around that we try to build properties and shows. Anything that seeks to enhance the understanding of sports and inform the viewer provides a different angle.

     

    This space needs to surround the live programming. It cannot act as a substitute. As an exclusive standalone as a channel or as a genre I do not think that sports entertainment will have any legs. Recently, one of the players launched a live sports channel and another channel on sports entertainment. Yet if you see the second channel it too has live sports. They probably couldn’t find enough software. That is not to say they will not create software but it is important to find a proper balance. At ESPN we have added concepts like dream job, Full Toss to the live experience.

     

    Sports federations need to get their act together

     

    International football is doing well with the soccer World Cup and English Premier League. The World Cup gave ratings that have not been seen for a non cricket sport. We had all India ratings of 2.6 and 3.1 for some of the league games. Unfortunately, the ratings for the rest of the stuff has been middling. That has to do with the lack of performance at the international level by sportspeople. I remember that two years ago when Sania Mirza came to the third round of the Australian Open the ratings shot up to 1.1.

     

    Unfortunately she has not been able to maintain that sort of form and the ratings have dipped. Premier Hockey League has given us ratings but because the national side has not been performing their matches have not fared well. Unless you perform at an international level it is hard to capture the imagination of the public.

     

    People want to emulate winners not losers. If you do not do well then there is no new pipeline of young talent who wants to play the sport. Eventually the sport dies out. We are doing our bit to push hockey and soccer. Having said that, sports federations need to have a deep, hard look at themselves. People need to fundamentally overhaul the system. Otherwise it is not going to go anywhere. It has been like this for the last 40 years. It will be like this for the next 40 years. Cricket at the moment does not face challenges. You have a good set of players as well as youngsters who want to take it up. So the pipeline is active.

     

    Certainly in other sports when it comes to marketing it is a challenge. With hockey we have to fight the dice a little bit as the national team’s performance has been bad. If India had won the Asian Games or even finished as runners up, there would have been a positive groundswell of support for the game. Marketing is a lot easier if the national team is doing well. Hopefully, people will put the bad performance of the Indian hockey team behind them and watch PHL for the love of the game itself and not for the satisfaction of one team beating another. In the UK local soccer league games have more viewership than some international matches.

     

    2007 A big revenue boost for sports

     

    Sports is event driven. You have the cricket World Cup coming up. So there will be a boost. Then there is the 20/20 World Cup in September. India goes to England and to Australia. We also tour Pakistan. So there is a fair amount of cricket. It compares favourably to this year when there was the soccer World Cup and the Champions Trophy.

     

    Distribution

     

    DTH has been around for quite a while and is a good development. It offers an alternative to the consumer and it is digital telecast. It is good that sports are airing in a format that is clearer to see. We welcome Cas from a technology perspective. The only thing that we are unhappy about is the kind of price regulation that has been forced down our throat. We will get 45 per cent of Rs 5 per subscriber, which is two rupees and forty-five paisa. This is absurdity that defies even basic, cursory logic. It is extremely unfair and we have already appealed to TDSAT. It has always been seen that free market forces are the best even for the consumers eventually.

    To interfere with that is always going to be a recipe for disaster. DTH and Cas address single subscribers and provide content for that subscriber. We are already providing interactive services to both Dish TV
    and Tata Sky. This allows viewers to check out rolling highlights, players statistics, different camera angles. As the transponder capacity goes up, it will afford the opportunity for more data. We have the rights for Euro 2008 and so the DTH service providers will probably come to us to see if we could do something with them.