A strike is never good news, but the 10-day TV workers? shutdown was particularly distressing for the broadcasters, for no fault of them. What started as a dispute between producers and workers over remuneration ended in a messy shutdown, the first in the media & entertainment sector since cable & satellite television started in India15 years ago. Though the strike is off for now, the repercussions of it could be long-term for the Rs 22,600-crore TV industry, which is projected to grow at a CAGR of 22% into a Rs 60,000-crore business by 2012.
The strike spared none, be it broadcasters, producers, workers, advertisers, media planners or viewers, though it also meant a brief spell of gains for niche channels at the expense of general entertainment channels (GECs).
Advertisers are already talking about stricter contract terms with broadcasters in future, while broadcasters may look at content outsourcing eventually.
The showdown began in October when the Federation of Western India Cine Employees (FWICE), the parent body of almost 22 workers? bodies, demanded higher wages and timely payment, and the TV show producers refused to budge.
Worker unions disrupted shooting and as a result only a few hours of new content were shot and telecast. Broadcasters had expected an end to the impasse by November 9, but that was not to be. The workers struck work from November 10, forcing GECs to air repeat telecasts of their shows.
Advertisers, on an advisory from the Advertising Agencies Association of India, stood by the broadcasters, though they were to review their stance after 10 days. By then, the strike was called off.
GECs put up a united front as television producers proposed to raise the cost of content to meet the workers? demands. The aggregate increase would be 10-15% per episode, through at a specific level the cost of some components would go up by 200-400%. Given the prevailing economic crisis, broadcasters are certain that it would be impossible to recover the extra cost through advertising.
Broadcasters hit hardest
As it turns out, the strike has dealt the hardest blow to broadcasters, caught in the middle of the feud between producers and the workers? federation. In fact, they were so shaken that they appealed in vain to the ratings agencies?Television Audience Measurement (TAM) and aMap?not to provide data on ratings of the repeat shows.
As the GEC crisis on content was playing out, a whole bunch of advertisers walked over to sports, niche and movie channels, which managed to sell their inventory at higher rates. An analyst says the ad rates had tripled for the sports channels.
Media planners now feel that the contracts between broadcasters and advertisers will become more stringent. Mona Jain, India head-strategic investments, India Media Exchange (IMX), which is a media buying agency, says, ?The major learning we had from this strike is that we need to apply a stipulation in all our contracts that in the instance of a repeat episode airing, for whatever reasons, the advertiser is not liable to pay. The interest of advertisers in these kinds of unexpected and unpredictable adversities can be taken care of.? Jain also points out that the industry should speak in one voice.
?Channels too should realise the implication of the situation and take a call which ensures that the advertiser?s money does not go waste especially in times like this, when every penny is precious and needs to be well spent,? she adds.
Loss for advertisers
Jain and other media buying agencies point out that with ratings dropping, advertisers lost an opportunity to reach their consumers in a critical period of their sales?some advertisers have the last quarter as the key season. ?With GECs not delivering to their maximum potential, advertisers had a low- impact campaign. The money too was ploughed in and there was no contingency plan. It was too short a time to take immediate action. Also with the plea from the advertising and the advertiser body for giving 10 days to the channels stalled any action which could have been taken,? rues Jain.
Given the economic meltdown, sectors such as automobile, white goods, financial sectors are already facing a downturn and they will soon go stingy on ad spends. Therefore, advertisers in these sectors can demand some sort of compensation from broadcasters?either by running free ads on channels or by increasing free on-air sponsorships.
Ratings agency aMap reveals that during the strike, the gross rating point of all the GECs dropped between 35-55%.
Jain says, ?We felt this was a little unfair to advertisers. Especially after the ratings came out, in which GECs showed a drastic drop. Channels should have given an option to advertisers to either cancel or give pro-rata discounting on every drop in viewership.?
Media planners are now firm on including a clause in the contract that advertisers are not liable to pay for any unscheduled repeat episode. In the eventuality, they point out, a proper negotiation process should be established which is a win-win for everyone.
During the strike period, advertisers looked at other options, many shifting their money to sports, movie and niche channels. Even print and radio has seen an increase in ad spots due to the strike, say media planners.
Content outsourcing on the cards?
But what sort of a defence mechanism can broadcasters adopt so that they don?t land up in a similar situation in future? Albert Almeida, executive vice-president and business head, Sony Entertainment Television, says, ?We are looking for a resolution and agreement that there will be constant rectification of grievances, where there will be no disruption in work and that genuine demands can be negotiated peacefully.? However, there is no clarity on whether a resolution will lead to the formation of another industry body including all the forces of the media gamut.
?As a general community, I think, we need to keep our eyes and ears open. I don?t think we can make unjustified demands at times like these. We also need to be sympathetic. The industry should have a certain degree of transparency and an organised format,? adds Almeida.
Industry sources told FE that broadcasters are now going back to the drawing board and want television producers to cut down on the cost of content. But after this strike will broadcasters also consider having a small in-house production team for some of their key shows? Says Almeida: ?That doesn?t resolve the problem. There are other issues as well. For example, when the cost of back office work got expensive in countries like the US, UK, it led to the formation of the BPO industry in India. So even for broadcasters, outsourcing is one of the strategies. I think we need to relocate to cheaper facilities that can deliver good quality content. The cost of doing business in Mumbai is becoming unviable.?
And though the strike has been called off, the dispute is far from over. Last heard, a section of TV workers had scrapped the MoU signed by the core committee of the producers? association (comprising the Producers? Guild, the Indian Motion Picture Producers? Association and the Association of Motion Picture and Television Programme Producers of India) and the FWICE members, saying the reworked compensation package is still less. No, we haven?t heard the last on this.
The ratings story
• All major general entertainment channels suffered an average drop in prime time gross rating points (GRPs) of between 35% and 55% during the strike period
• From 10-13 November, when GEC channels telecast reruns, primetime saw a 36% dip in viewership; but the viewership rose for sports channels by 50%, movies by 40% and music by 30%
• On November 12, the peak time GRP of Star Plus dipped to an average of 8.7, which was 29.9 on November 5; for Zee it slipped to 6.5 from 13.1; and for Colors to 10.9 from 18.2
Source: aMap