* More entertainment channels in the pipeline
Not only are newer networks appearing on the scenesuch as INX, Viacom18 and NDTV-Imagineincumbent networks are also launching more channels. While entertainment channels are the most expensive to manage and launch, from an industry perspective this is great news as it means more money coming into the sector by way of expensive content and marketing.
My company works in this sector closely and we are seeing a material change in the dynamics involved when a general entertainment channel (GEC) is launched as opposed to when a specialist channel (news, movies, kids etc) goes on air. There are differences both in the scale and quality of launches.
* Distribution platforms could bring down subscription costs for consumers
The earlier estimates for TV distribution indicated that India would have under 5 million set-top-boxes (STBs) by 2007. However, the scene on the ground seems to be growing a tad faster, according to our estimates. We are seeing a phenomenon of cable operators in select mini-metros happily launching what has now been termed as voluntary CAS (conditional access system).
This has been done to keep some of their key homes from being lost to DTH. This effort will get a shot in the arm from an initiative from the administration to incentivise voluntary CAS.
Then there are the multiple IPTV (Internet protocol television) and DTH (direct-to-home) launches. Sun, Reliance, Bharti that join the incumbents, are bound to make TV access cheaper for the consumer, a la telecom sector experience. Already the rumour mills are working overtime on consumer pricing for some of the new launches.
* Tiered service offering and specialist content
India will see a tiered multi-service offering going forward and the seeds of this are going to be sowed in 2008. Terrestrial, cable, DTH, IPTV, retail-TV (in malls), mobile TV (DVB-H, the global standard for mobile TV and IP datacast) will emerge in the next few months as different tiers in the market.
For the first time in television history, a channel was launched in 2007 only on the DTH platform and not on cable. This provided a good testing ground for the channel concerned and conserved vital distribution cash that would have otherwise been necessary if it had chosen to be on cable networks. A tiered market gives these kind of solutions to niche businesses spurring market experimentation by both small and large players.
A tiered offering, content specialisation and growing distribution options produce whats known as the long tail phenomenon. The long tail occurs when distribution platforms become very large, helping the smaller products to collectively gain market share rivaling that of leaders.
The TV business has been growing a long tail as niche content offerings are getting acceptance in small pockets. This has happened in news, sports and kids channels. The good news: each of the niche segments has shown good viewership. If the current trend continues and if distribution platforms get more addressable, one can imagine channels aimed at extremely niche communities.
* Segmented market
The specialisation in this industry is already segmenting the market. Groups of consumers who are watching specialist programming are extending the long tail of content. Specialist content has an impact on TV programmers and the TV production houses as resistance to experimentation could lead to certain death or marginalisation. When viewers become increasingly discerning, the quality, speed, variation and surprise elements have to be constantly improved. Clearly, 2008 is going to see a tremendous re-focus on content basics and quality.
There are also some concerns and challenges facing the TV industry.
* Nearly half the country does not have access to TV
While the southern states are clearly well penetrated even in rural areas, the same cannot be said for the rest of the country. This is a crucial challenge for the TV sector. Its no laughing matter that roughly a third of the 30 million homes in Uttar Pradesh (UP) have TV sets. Worse is the UP cable number that stands at one-tenth (3 million of 30 million homes).
Currently, the TV media sector does not try to directly influence the penetration of TV sets which is at an abysmal 55%. If that does not change, the pie is not going to grow as fast as its getting sliced.
* News channels are straying into reality and entertainment
Without taking a moral stand on this, it must be said that when news channels start playing reality shows, crime shows and entertainment content, something must be really wrong. Especially since there are 100-plus news channels that have applied for licences, making India one of the most news channel countries.
Will all of these channels conform to reporting standards Will all of them respect the thin line dividing news from sensationalism Very tough choices in an increasingly tough market.
* The dreaded L&R words Legislation and regulation. One is moving so slow that even a snail would be embarrassed. Direction and motivation are also constantly suspected.
The other is trying hard to maintain a balance between all stakeholders. With the sector becoming more and more complex, slow and mis-guided legislation spells doom for all the players in the market and may, in fact, slow down the rate of progress.
* Talent shortage
Talent shortage in the Indian TV sector is going to result in newer solutions. Already a host of new channels are coming in and changing the dynamics of hiring, salaries and retention. The long term effects will be growing stress, burn-outs and anxiety. At an industry level, this means rising costs and falling competitiveness and margins, besides loss of intellectual capital and speed.
All said, the year 2008 is an exciting time to be in the television industry, with growth prospects and scales never imagined. The fact that TV is attracting multiple revenue streams has also made this sector safer from the earlier perceived risks of a general economic downturn. In short, Indian television is poised to take a huge leap forward!
The author is CEO & chief evangelist, Media E2E