Over the past few months, the Indian audiences have witnessed a consistent decline in the quality of TV news, culminating in the TRP scam that has made several questions the news media and the role of the broadcasters, advertisers, as well as the government, and its regulator, in creating a credible television rating system. TV news channels are always in a bid to increase the viewership as their business model depends on advertising revenue and thereby focusing on garnering ‘television rating points’ (TRP). The recent incidents may seem to have only just hit their nadir, but in actuality, it is a result of 16 years of strict control and regulation by the government.
In 2004, the Telecom Regulatory Authority of India (TRAI) became one of the independent sectoral regulators set up with the advent of economic liberalization initiated by the Narasimha Rao government in 1991. As the name “Telecom Regulatory Authority of India” goes, its core competency is in the telecom sector but broadcasting was given to them as an interim measure.
The decay of TV content in the last decade is a product of the failed efforts of TRAI with regards to the implementation of regulatory measures for the orderly growth of the sector with the aim to improve the quality of service and choice to the end-consumers.
Back then, as most of us will remember, we depended on a disintegrated market of local cable operators and suffered a lack of standard viewing choices. We as consumers had little choice over what we watched or the quality of service we received. TRAI’s aim was to regulate the sector and thus to provide greater choice, bring transparency, and make TV services more affordable but TRAI is nowhere near achieving that mandate fully. While TRAI’s mandate is to regulate three aspects: tariffs, the quality of services provided to consumers, and interconnection between broadcasters and distributors such as MSOs, LCOS, HITS, and DTH operators it has focused heavily on only the first of these.
Restrictions on the pricing of TV channels have led to a negative impact on the return of investment through a robust mix of subscription and advertising revenues. However, due to a skewed regulatory approach, the channels are forced to increase their dependence on advertising revenues.
In 2019, 37% of all advertising expenditure was made on TV. The new tariffs introduced by TRAI in March 2019 pushed up TV bills by 25%, causing 26 million TV customers to unsubscribe, and incur a loss of Rs 85 billion to the sector. Furthermore, channels’ financial decisions, production of programs, and its scheduling are largely influenced by television ratings.
In 2008, TRAI recommended an approach of self-regulation through the setting up of an industry-led body – the Broadcast Audience Research Council (BARC). After the recommendation of TRAI, BARC was made the accredited television rating agency in India. TV, with the plethora of options it provides to the viewers needed a television monitoring mechanism, and BARC, gave the media industry a nuanced audience report in the form of ‘What India Watches’. At present, BARC has 40,000 sample TV households of a total of 153.5 million TV households in the country.
But even with a robust research design that BARC follows to gauge TV viewership through its tracking devices called ‘peoplemeter’ installed in the 40,000 sample panel homes, smaller genre channels such as news channels with no subscription model are dependent entirely on advertising revenues, and as a result, are more likely to game the rating mechanism for survival.
The regulator needs to focus on prioritizing the quality of service and content in the broadcasting sector with a light-touch regulatory approach. A stable and cohesive policy is needed that considers the interests of all stakeholders – broadcasters, distributors, and consumers. This will help broadcasters to price the channel taking into account the investment needed to invest in producing quality content and force distributors to provide quality of service to the end consumers.
Internationally, the broadcasters’ revenue stream depends on both subscription and advertising revenues in the ratio of 70:30, but in India even after the implementation of digitalization and plethora of regulations by TRAI, the revenue leakage still continues impacting the broadcasters, the government exchequers, and the end consumer. As a result, television channels in India depend on a safe route, majorly on advertising revenue forcing all of them to go after more eye-balls resulting in the degeneration of content and irresponsible journalism that we watch day in and day out in our country.
Sana Ali is Public Policy Manager at Aakhya India, a communications and policy Advisory.