Mumbai: At the inaugural session of Indiantelevision.com's Video and Broadband Summit 2022 industry experts stressed the need to unshackle the linear TV industry and get it out of over regulation. It is important to leave the pricing to the market or else the broadcast industry will not be unshackled. People are thinking about what it is that they are paying for. The industry needs to create a crisis body and meet the regulator. The session pointed out that bundling is still important. It cannot be taken out. Bundling helps families watch more content. Television, at the end of the day, is a family medium unlike OTT which is an individual medium. As a result of regulation distribution platforms have had to face the wrath of consumers who have said they have to pay more for less. The good news is that the industry is working together in a collaborative manner to address the drop in the pay TV universe.
The panel was called Video Content Monetisation Landscape: No Free Lunches. The speakers were Disney Star head distribution and international Gurjeev Singh Kapoor, NxtDigital managing director & CEO Vynsley Fernandes, IndiaCast president Amit Arora, Travelxp co-founder, CEO Prashant Chothani and Deloitte India partner-consulting Prashanth Rao. The session was moderated by media consultant Anuj Gandhi.
Gandhi asked where the pay TV drop had gone. There is a 90 million unexplained disappeared number. Even with Freedish there is a gap of almost 40 million homes. Cheating is not more than 10 per cent.
He also noted that there are no free lunches. The advertising based video on demand (AVOD) business of big tech, he noted, is a serious threat to traditional media businesses. On the subscription side thousands of crores has been lost.
Kapoor noted that no significant movement on Freedish has happened in the past six months. Prior to that, during covid, Freedish had a free run and was laughing its way to the bank. Viewers also had a good run. He noted that piracy is not more than 5-10 percent at best. Analog is still present in places like villages. "We are collaborating with our partners. The good news is that focus is now on how best we can get these customers back in. The way of looking at the business is different now. It is more about collaboration with partners. We have not seen any issues like blackouts. Efforts are made to get the lost users back on. In the next two years we should get them back." At the same time he noted that there is also OTT which is targeting the premium segment. In terms of Freedish as competition he said that it will depend on whether or not broadcasters put their channels there. It is the Hindi speaking market (HSM) that is getting affected.
Arora said that 30 million homes is the gap. "What we have seen is that after covid people are sitting down and are really, really thinking about what they are paying for? Do they really need it? A lot of chat is going around that you should just pay for what you want to watch in an MPR regime. Covid has taught people how to surf for content between a small and a large device. I will say that we really need to unshackle the linear TV industry and get it out of the grip of the over regulation that we currently have. The consumer looks at his final purse. Rs. 200 is the favourite denomination of a recharge," he pointed out.
Fernandes said that the first phase of losing customers was those who had more than one TV set in 2018. Then during lockdown, people wanted content no matter where they were. Other devices started to play a greater role. More people moved to handheld devices. As things get better people want to improve their package. Q1 April-June saw people suspending linear TV subscriptions.
“As lockdown eased people held back on renewing subscriptions. But thanks to big ticket cricket properties, renewals happened. The question is that bundles must be created where linear is bundled with broadband and OTT. That is becoming a strong driver for the urban consumer who does not want to deal with multiple service providers. In tier two, three towns and cities this is less of an issue,” he added.
Chothani agreed that regulation is a problem in the country and it is hampering innovation. Networks cannot do any kind of innovation unlike in Europe. "The customer is going to go to the biggest screen available to him. If he has a choice between the TV, mobile and tablet he will go to the TV set. OTT is losing in discovery. There is a movie available, which nobody knows. One has five minutes to find what one wants to watch. That is a consumer’s habit."
This, he said, gives an advantage to the existing distribution ecosystem for cable and DTH. They can aggregate all content and the internet together. But again regulation will hamper that innovation as well. He noted that with the growth in smart TV penetration churn is increasing. He gave the example of someone not finding NDTV on linear and then finding it on YouTube. That person may not renew his TV subscription. He added that carriage fees are a hurdle for the industry's growth and have been so for over a decade.
The supply chain cannot be the customer. The distribution ecosystem does not have great content people, he noted. Content guys need to sit in all distribution companies. "There should be no regulation." He feels that the practice of applying for a broadcast license should be done away with. On an OTT platform like MXPlayer channels are running for which a license has not been given. He also said that the industry should create a crisis body that meets every regulator.
Rao said that viewership has come down in non-news and non-sports in linear TV among the 30+ age group. In those genres there is appointment viewing. He also said that choosing a platform or content is based on interest. He also noted that putting a cap on pricing like sports channels leads to a challenge in monetisation. Ads are limited in number.
He also noted that when you have OTT, broadcast and free TV regulation cannot only be for only one party. An OTT can charge anything. But in broadcast there is a limited innovation in pricing one can do. "Pricing innovation is important for the broadcast industry to survive and thrive. Regulation should support innovation."
Kapoor said that there was a huge uproar from viewers in NTO 2.0 that they spend 10-15 per cent more for a lesser number of channels. So the plan is to go back to consumers. They want more quality content. They complain that these things have been taken away. Even English channels are not there. So the rationale is what good is TV anymore.
"If you look at the wrath of viewers at large they are giving up more money getting less content and it is now clear that bundling helps the family watch more content. Television is a family medium. It is not an individual medium. Four to six members of the family watch the television. You still bundle whether at a broadcast or an MSO or a DTH level," he pointed out.
It was noted that some foresight and control for the regulator should be there but pricing should be left out of it. Globally the regulator does not get involved in the pricing whether it is FCC in the US or Ofcom in the UK. There is a lot of competition in India among broadcasters. 60 per cent of channels are on FTA. Competitive forces are there.
It was noted that regulation in the country does not take into consideration digital consumption which has changed the world in the last five to six years. Regulation is there in terms of inter connection not at the last consumer point. A systemic change of deregulating has to be brought in to let platforms and broadcasters deal with their lives.
Fernandes noted that the industry has matured where stakeholders can sit across the table and decide what is good for the system. During the NTO everyone sat together and decided how to go about it. "We can fix it ourselves. Everyone looks for growth and that will not happen if you dampen the pricing on day one. You cannot say that a benchmark will be set for the greater good of the nation." He added that bundling of linear and OTT should be allowed. The industry has to sit and decide how to take things to the next level.
Pricing is not just about bundling and unbundling. It is about the premiumness of content and the time value of content like a movie. The way pricing is today, it does not respect the time value of content. It was noted that monetisation is not only done through money. In OTT monetisation if a telco's Arpu is at a certain level then channels might be given to the service as a bundle to the telco. The customer is not charged. Payment happens through B2B. Can linear TV do something like is a question that was asked. There are different currencies. The overall scheme of pricing must be open to allow these kinds of innovations per se.