The show must go on

The broadcast sector in India is in a state of flux and growth; with limitless opportunities. Penetration of cable and satellite channels is only 46%, with great potential for expansion across the country.

The broadcasting space, meanwhile, has been evolving fast, and how! Within a span of four years, the industry has witnessed the introduction of conditional access system (CAS) in major metros as well as the advent of six big DTH players, which have garnered approximately 11.1 million subscribers last year.

The industry has matured, keeping up with volatile viewership patters, offering a large number of distribution platforms and presenting differentiated content. And although there are roadblocks such as the lack of independent regularity of content, overdependence on rating and an inadequate rating system, the industry is optimistic of the future.

According to a recent study by PricewaterhouseCoopers, the television industry is projected to reach Rs 42,000 crore by 2013. It will continue to be the largest contributor to the media and entertainment revenue pie.

The ad spend to GDP ratio is 0.6%, versus 1% in developed countries. This is expected to grow at a stable rate of 11.4% cumulatively over the next five years, from an estimated Rs 24,470 crore in 2008.

In the television pie, television distribution is projected to garner a share of 60% in 2013, while the TV ad industry is projected to command a share of 41% in 2013, having increased from its present share of 39% in the total ad industry pie.

The biggest thing to look forward in the future is digitalisation — both of content and delivery platforms. This will help in reaching out to wider audiences within shorter spans of time.

The entry of DTH players is the step towards digitisation of TV distribution, and going forward, we will see MSOs getting digitised with a view to provide high quality content at attractive value for money pricing. IPTV and mobile TV will also hit Indian households, transitioning India towards a digital future.

One of the major roadblocks to the growth of pay television is carriage fee, which is paid by broadcasters to cable operators to place their channels in the prime band. It is expected that with digitisation of cable, carriage fee will be replaced by a better revenue sharing system.

One also hopes the government will resolve the ongoing issue of the cap on foreign direct investment (FDI). They have recently liberalised the FDI with the Telecom Regulatory Authority of India (Trai) recommending increase of foreign investment to 74% from the existing 49% in carriage services as well as increase of FDI from 26-49% in TV content service.

The matter is currently being examined by the government, which should duly resolve it by allowing an increase in FDI within the broadcasting space.

Another key industry feature in the coming days will be a robust rating system set up by the Broadcast Audience Research Council, in association with the Indian Society of Advertisers, Advertising Agencies Association of India and the Indian Broadcasting Foundation.

In five years, television broadcasters can hopefully get an independent, credible and reliable television audience measurement, which will be a neutral industry body.

Another big change in the broadcasting space will be minimal regulation around tariff structures. We are confident that an effective and transparent tariff regime will support orderly growth of the broadcasting sector.

Lastly, there is need for a level-playing field for all media houses, ranging across their medium — print, electronic, or web.

This will ensure that broadcasting entities get exemption from payment of service tax on revenue accruing from advertisements shown on electronic media, at par with the print media.  To conclude, television as a medium has created a concrete stand for itself in the years gone by. I would say that in spite of the challenges, we’re confident the industry will grow at the scorching pace. The journey and transformation has been a long one but this isn’t the end — the show has to go on.

The writer is  EVP, marketing & communications, Star India