Good Morning and a Happy News Year. I am happy to report The News from the front lines of the news battleground. Returning after a sabbatical, it gives one a fresh perspective into what went by and what to, perhaps, expect next.
2009 had begun on the back of the most alarming news event of the decade: the terror attacks of Mumbai.
2009 also witnessed the biggest news event of 2009, the General Elections and an accidental death of a Chief Minister, which was widely covered.
Not much changed in the stack up of the news channels – the #1s continued their reign respectively, Aaj Tak, Times Now and CNBC. New channels came into the offing. Some changed ownership. Regional News was the hero of the year, clocking most significant viewership…
If I take this route ahead with this news bulletin, it would be so conventional. While I have been asked to comment on the year, which went by and what to expect in the coming year, I thought I would rather report what my candid conversation with folks connected with TV News broadcasting reveals. Turning this rewind-forward commentary, to views gathered from experts (names withheld on request) over a few candid conversations.
1. Profitability
Business leaders in the domain believe the big challenge is profitability. Of the listed news entities, only one network has stayed ahead, going by its public reports. Others have taken a hit! Perhaps due to the challenging financial conditions of the last two years and/or due to the increase in costs structures.
See it any way, profitability of the TV news industry is under significant strain. This may be bad news for investment but it is also a big opportunity for businesses to spruce up their act. With over 200 news channels across all languages and genres, certainly a challenging act. A prominent investment banker believes the next two years provide opportunity for consolidation, projects some of the news networks may dither off the horizon and those focused around profitability are most likely to succeed.
Profitability for news is not a bad term. It is essential, as firms which do not make the cut, eventually vanish and so does the editorial associated with it. Hence for the “freedom of the press” to exist, being profitable is even more essential.
There are 4 underlying fundamentals to profitability
Market Positioning: Each news Network has a position in the minds of its viewers. News is not vanilla. Most viewers have a choice and a repertoire and a set of channels they almost never visit. News networks need to invest in growing their position. With the wide range and choice that exists in the market place, positions can be adopted by way of brand offering and editorial experience. This is what leaders of news networks need to apply themselves to.
Ad Revenues: The gap in revenues amongst the top 3 of top 5 is decreasing and growth of the leaders is not as significant in historical periods. Yet the category as such is not saturated. The leaders need to pick the pace. Set the standard. Up the price and ante and not crowd to the median price point.
One of the challenges the industry faces is to learn to sell audiences and not just market shares. The quantity and quality of audiences. Not just Tam audiences, but the homes the news network reaches. This change in strategy and market-based positioning can be the sleigh on which the next Christmas fortune may be written.
Subscription Revenues: Some of the news networks have been successful in turning “Pay”. For some the earning – learning has been lower than market potential. But strong brands can move ahead and begin to grow their revenue curve by focussing on subscription revenues.
The worry of viewership shares is driving the channels to commit for larger ground paid connectivity. But true strong brands will find its loyal viewers ask for them. One cannot be indifferent and say news is news..that‘s why the pecking order has stayed largely stable. There are ” News Brands” and they have a demand, for which they can charge. Brands are language agnostic.
Cost Structures: It‘s not about the quantum of costs but about the nature of the cost structure. Is this sustainable in the medium turn for businesses to be profitable? Is there potential to find cost arbitrage in the nature of news gathering and ground connectivity amongst news channels? Can local channels work co-share resources or reportage or news blocks, so prominent in the mature US markets, as an example. Each News Network has an astute understanding of what works for itself and what is rarely used, arbitrage that. Rationalize to build essential cost structures and not unsustainable ones. As an illustrative example, Is it really necessary to be in international markets, if say a channel is losing money? Is that sustainable?
2. Editorialisation, Not Sensationalism
The editorial independence of TV news networks continues to grow with balanced strength, Aligned to its viewers needs and to provide objectivity in news reporting. The term sensationalism is sometimes used to describe the dramatic visualisation of a story. It is not a replacement for the quality of editorialisation which continues to grow. Who will determine what is what? The editorial flow of news is committed to providing the news in a simplistic, objective manner. It must use the metaphor to create the necessary visual drama for its viewers to understand.
News is no more simple. There are multiple views, all of which are right. There are various hierarchies: the government, justice, social justice, the lobbyist, the consumers rights, the editorial right et al. All need to be balanced and put together in a manner which is cohesive and does not tempt the remote button to be pushed.
We acknowledge there are temptations and those may exceed the boundaries. But then social networking, blogging, independent reports etc keep flexing these boundaries and new ones get created. India has been largely balanced, informative, educative and in many recent a time, bought to the table excesses, be it of state or individual. The very same which accuse of sensationalism are those which cause it. Strange isn‘t it? When it does not suit you, the media is no more your friend?
The media, my dear was never your friend. It is as unbiased “as a potato”, what you do with it, will give you the taste you want. News is all pervasive and has bought to society a new spectrum of information.
3. Corridor of Collaboration
In recent times, with the advent of the News Broadcasters Association (NBA) and other cooperation measures introduced by many news networks, the industry is getting better equipped to collaborate and compete. Those who embrace this approach are likely to see better fortunes for themselves. Transparency in collaborations creates for better understanding, deters suspicion and makes for a stronger market place. Be this by way of sharing of local news with national channels or the other way around. Or news blocks on networks, co-branded or branded otherwise.
The practice of sharing the local advertising time, via local avail, has already begun and seems to a market gainer for all. There is more to be done, as not all news networks are members of the NBA. The corridor of togetherness will drive new practices, forge collaborations and result in better profitability. As an illustrative example, connectivity costs, news gathering and sharing, best practices in terms of disciplines, new technical alliances, taxation and import policies.
So what is the news forecast for 2010? All is well. Yet nothing much may change and there may be more bitter rather than sweet moments, unless the industry takes rapid and conscious charge of the above. I am very optimistic of the industry and so were the experts I spoke with – from editors to business leaders, to media experts, to consumers…
The news is important and everyone wants to be in it. So hang in and make the TV news industry hang in too.
