FEATURES
Slice, dice & deliver
13 June 2014
13 June 2014: Rahul Johri is happy. In the past two years, the Discovery Networks Asia Pacific executive vice president and South Asia general manager has seen Discovery Science's ratings rise six times. Sister channel, Animal Planet, is up by 77%. And the joy is spreading. Almost every English-language entertainment and infotainment channel in India has seen either a spike in viewership or in stickiness in the last year or so. AXN, for instance, has seen time spent on the channel rising from eight to nine minutes to 13-14 minutes.The reasons may have as much to do with a maturing premium-content audience as they do about broad market trends, including the unprecedented choice that digital technologies are opening up. "Frivolous viewers who came in for snacky shows such as Just for Laughs have left and the serious ones who watch series such as Orphan Black or Sherlock, have come in," says Sunil Punjabi, business head, AXN Networks, at Sony Pictures Entertainment.All this is unheard of in a market where more than half the total time spent watching television and half of all television advertising revenues go to entertainment channels in Hindi, Telugu and other local languages.Discovery, AXN and the rise of English-language programming is just one illustration of the massive changes playing out in the world's second largest television market. By the end of March this year, 75 million homes - roughly half of India's 153 million TV homes - were digital. By the end of December 2014, going by a government mandated deadline, all of them should be.As it sheds its creaky analogue structure, the US$6.7-billion Indian television industry that reaches 740 million people, is discovering segmentation, premium programming and pay-TV revenues, among other things.Of these, programming is experiencing the biggest change, including day-and-date releases for the first time. Sherlock s...
13 June 2014: Rahul Johri is happy. In the past two years, the Discovery Networks Asia Pacific executive vice president and South Asia general manager has seen Discovery Science's ratings rise six times. Sister channel, Animal Planet, is up by 77%. And the joy is spreading. Almost every English-language entertainment and infotainment channel in India has seen either a spike in viewership or in stickiness in the last year or so. AXN, for instance, has seen time spent on the channel rising from eight to nine minutes to 13-14 minutes.The reasons may have as much to do with a maturing premium-content audience as they do about broad market trends, including the unprecedented choice that digital technologies are opening up. "Frivolous viewers who came in for snacky shows such as Just for Laughs have left and the serious ones who watch series such as Orphan Black or Sherlock, have come in," says Sunil Punjabi, business head, AXN Networks, at Sony Pictures Entertainment.All this is unheard of in a market where more than half the total time spent watching television and half of all television advertising revenues go to entertainment channels in Hindi, Telugu and other local languages.Discovery, AXN and the rise of English-language programming is just one illustration of the massive changes playing out in the world's second largest television market. By the end of March this year, 75 million homes - roughly half of India's 153 million TV homes - were digital. By the end of December 2014, going by a government mandated deadline, all of them should be.As it sheds its creaky analogue structure, the US$6.7-billion Indian television industry that reaches 740 million people, is discovering segmentation, premium programming and pay-TV revenues, among other things.Of these, programming is experiencing the biggest change, including day-and-date releases for the first time. Sherlock season three, for instance, aired in India the week of its U.K. launch. The Big Bang Theory, Orphan Black and Castle, among others, were also given day-and-date releases with the U.S. Just two years ago, this would have been impossible.Digitisation has changed the game, and channels are matching the technical ability to deliver with more aggressive acquisition strategies - including paying for shorter licensing windows - designed to offer more choice, to segment audiences more effectively, and to drive demand for high-end premium content, channels and value-add services.The launch of three new kids' channels, second and third general entertainment channels from big broadcasters such as Star India, Zee and Sony are some of the other signs of digital's impact. "Content will become more mature as digitisation takes off; we are on the cusp of that change," Johri says.Almost everyone agrees. "Digitisation is the biggest change that television in India has seen since cable and satellite took off in 1991," said Sanjay Gupta, Star India's chief operating officer, in an earlier interview.A snapshot of the country's TV past shows he's very likely to be correct. India is a highly competitive market with 800-odd channels. However, limited cable bandwidth led to the creation of an industry where distribution - not the consumer - was at the core of strategy.Direct to home (DTH) satellite TV arrived in 2003. This first digital option took off in a major way. By 2011, when DTH had reached about 50 million homes, the Cable Television Networks (Regulation) Act of 1995 was amended to make digitisation mandatory. This means that television signals cannot be sold without an addressable digital set-top box. By November 2012, Delhi, Mumbai and Kolkata were largely digital. The next 38 cities were due to finish by the end of March 2013. Delays aside, the process is well under way.In a market cussedly dominated by analogue, the broadening of the pipe that brings TV signals to homes does two things - eliminates the common practise in India of paying for carriage, which programmers have long cited as a major hindrance to market development in the country, and increases pay-TV revenues.The total impact on India's pay-TV environment could be that more than US$2.5 billion of revenues leaking in the analogue environment are brought back into the legitimate fold.The digital environment also dramatically expands bandwidth - an opportunity to slice and dice audiences, by price, demographics, location and tastes, that is not lost on local operators.What exactly are digital homes in India doing? Nielsen-Kantar joint venture, TAM Media Research, is currently the only TV audience measurement firm in India. Chief executive L.V. Krishnan points to the first of three early trends driving programming strategy in the post-digitisation age.One is the availability of electronic programme guides (EPG) on all digital platforms. While this may seem rudimentary in more developed markets, for millions of Indian TV viewers, surfing for something to watch was like groping in the dark for a light switch. Easier navigation has meant more sampling, more time spent and higher reach for several genres. For instance, there was a 25% growth in total viewership of kids channels last year against 2012."The biggest thing digitisation has done is help kids navigate; earlier we were all over the place, now we are all clustered together," says Nina Elavia Jaipuria, Viacom18's executive vice president and business head, kids cluster. The company's channels in India include Sonic, Nick and Nick Junior.This explains the second trend - the launch of more channels within a genre. "Increasingly GECs [general entertainment channels] are creating flanking channels where there is more scope for experimentation and potential to create content that represents an evolving India," says Anupama Mandloi, FremantleMedia India's managing director. FremantleMedia produces India's Got Talent and Indian Idol, among other shows.Almost every major broadcaster now has three to five channels within Hindi general entertainment in a bid to reach out to all the niches within the genre.Star India has launched Life OK and Star Utsav, which have taken off in small-town India. Viacom18 has Rishtey, and Zee has Anmol and 9X. Zee also rolls out new Hindi general entertainment channel, Zindagi, on 23 June. Zindagi, a premium mass-market channel, goes up with a schedule of Pakistani drama initially and with local production ambitions split between producers in India and Pakistan. Zee managing director and chief executive, Punit Goenka, called the channel a "category creator" and said it targets modern, progressive women who are not being served by traditional entertainment channels.The third thing that digitisation does is help increase the ‘long tail' of content, either by shifting the place or the time of consumption. For example the sampling of Tamil film and general entertainment channels went up by 76% in Delhi in the months following digitisation. Delhi is considered a Hindi-speaking market, so this rise could only mean that Tamilians living in Delhi have finally found an option to watch programming in their language and are grabbing it.Interactivity, too, runs alongside digital development, and broadcasters have not been slow to push visibility on social media platforms. One of the latest initiatives is Zee's interactive TV movie channel, &pictures, which kicked off a Twitter campaign in June to coincide with the channel's premiere of Aamir Khan's first unreleased movie on television.Whether it's a direct result of digital or not, India's content is changing too. FremantleMedia's Mandloi points to subtler shifts in long-running shows. "Characters that have been adopted by the viewers as inspirational or relatable are today taking a stand within the home, stepping out to pursue a career in, for instance, the police force, fighting for custody of a child, opting for divorce, adopting a child," she says.Zee's Goenka also weighed in on the changes taking place as India's content industry develops, telling media ahead of Zindagi's launch that the country's television tastes were evolving and there was a higher appetite for more progressive story lines.There are several obvious demands that these trends place on broadcasters and production houses. The first is the need to invest in content. For over three years now, the US$730-million Star India has been spending heavily on movies, drama and chat shows such as Satyamev Jayate. In 2012, Star India paid US$690 million for cricket rights from the Board for Control of Cricket in India. In the same year, Star India music channel, Channel V, morphed into a youth service because digital homes show a clear skew towards youth programming."The challenge is to move beyond envisioning content for the largest consumer base to specific demographics," Mandloi says.The slicing and dicing will eventually put a premium on the right packaging and pricing. In a conversation last year, Harit Nagpal, Tata-Sky chief executive, drew an analogy with telecoms. The realisation that the consumer wants to buy in small sizes led telecom firms in India to "hire the Pepsi and the Unilever guys". This is bound to happen in television. Someone in Nagpur [a town in Western India] may want two Malayalam channels [a language spoken in Southern India]. In the analogue mode, the platform operator's system was not flexible enough to deliver that. In digital it is and this puts a premium on packaging and delivery. There are a few worries though. Mandloi points to the first one. "Digitisation will have to go hand in hand with how we interpret consumer data in the digital bandwidth and what choices consumers make when the channels are unbundled. When digitisation, ratings data and subscription revenue are synchronised enough there will be significant change," she says. There is also the structure of the content industry in India. More than 70% of all original TV programming in India is commissioned by broadcasters, who eventually own all intellectual property rights to the production. This delinks the fate of the show from that of the producer, and, some thinking goes, limits producers' incentive to innovate and to create content with scale and monetisation potential.One could argue, though, that as the market for film retail in India changed, it forced production houses to become adept at meeting the needs of this huge, heterogeneous market. Now there are films made for every type of audience in India. It is a matter of time before broadcasters and production houses figure out how to make TV programming for the many Indias within.