Plus ça change — the French writer Jean-Baptiste Alphonse Karr came up with this pithy epigram in 1849. Loosely translated as “the more things change, the more they remain the same”, it has proven its handy utility to thousands of hacks confronted with the general stubborn unwillingness of the world to change too much too quickly. For the television broadcast and streaming industry, 2019 is likely to get filed in the ‘plus ça change’ section.
There are, as usual, four broad areas across which we must look at the business: delivery mechanism, the price/value equation for the consumer, the broadcaster or content platform’s revenue buoyancy and viewership measurement.
The year began with the industry, and more importantly the consumer, dealing with the TRAI-mandated NTO — the New Tariff Order. Conceived by the regulator as a process for putting more control over purchase in the hands of the consumer, the immediate consequence was almost universal perplexity and disgruntlement. Channel availability shrank dramatically, and many members of the household discovered, to their consternation, that their regular destinations were no longer tunable.
While MSOs and DTH service providers had already started announcing new packages, consumer homes were unable to make immediate sense and their package defaulted down to the near-minimum available. While this got corrected, more or less, over the first half of the year, it led to enduring, largely adverse impacts on channels catering to niche audiences. English entertainment and infotainment were badly bruised while the kids genre got off relatively lightly.
In general, the NTO reduced the number of channels available in the home, even as the monthly subscription paid was flat but with an upward bias. One long-term injury which the NTO has left on the channel mix is the sharply-reduced possibility of serendipitous discovery. Who amongst us has not spent a lazy Sunday afternoon browsing aimlessly through channels and stumbling upon programming that immediately draws us in?
Tightening of purse strings
It was clear from the beginning of the year that the economy was showing the pernicious, lagged effects of demonetisation and GST. Advertisers began to show skittishness in their marcom spends quite early in the year. Forecasts, including by the FICCI Frames, as late as March, kept speaking of a 10% or better growth in the M&E sector, with TV coming in a bit higher, and digital almost twice as high. It is safe to say that, nine months later, these pronouncements sound pollyannaish. In particular, a very large proportion of Indian broadcasters are solely dependent on advertising revenue. You know where this is going by checking on yields, typically expressed as ER (effective rate per spot) or CPT (cost per thousand). Broadcasters have seen ERs remain flat, again with a downward bias even as CPT has actually gone down. The latter is not surprising, given that the last round of BARC’s establishment study, Broadcast India, showed continuing growth of television footprint across the country. Advertisers cutting back on spends typically reduce the number of discrete media options they deploy. This concentrates spends with the larger channels and/ or networks and leaves niche and new players at risk of being revenue-starved. Combine this with the debilitating effect of NTO on channel availability, and you are looking at the perfect storm for them.
Before addressing the issue of measurement, we must look at how streaming services are impacting content consumption. Given that almost every significant global player is now in the country — noting that even Apple TV+ arrived last month — it is clear that India’s billion viewers are unmissable for the streaming industry. Mobile data rates, even after the reset late in the year, remain amongst the lowest in the world. Penetration of Android smartphones continues to grow and apps like TikTok introduce consumers to the joys of audiovisual entertainment on their personal screen.
This should make it abundantly clear that the future of television measurement is screen- and schedule-agnostic. Time shifted viewing, as pioneered by set-top boxes offering recording, is going to be upended by on-demand viewing, and models already exist in other markets where linear TV and streaming services are now so tightly integrated, the consumer is unable to notice where one ends and the other begins. BARC has been aware that this is where the future lies. It is highly likely that we will see the launch of appropriate new measurement metrics in 2020.―Authored by Paritosh Joshi, principal, Provocateur Advisory for Financial Express