Why news channels are in the spotlight

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October 26, 2020 7:03 AM

A few advertisers have declared that they will blacklist news channels that air misleading and “toxic” content to drive viewership ratings

News channel business model is broken.News channel business model is broken.

A few advertisers have declared that they will blacklist news channels that air misleading and “toxic” content to drive viewership ratings. Venkata Susmita Biswas asks experts how the news genre can walk the proverbial tightrope between credibility and profitability.

Kishan Kumar MS, chief growth officer, Wavemaker

‘Need to revisit ranking and ranting’

In a 2016 survey by American Press Institute titled A New Understanding: What Makes People Trust and Rely on News, accuracy, agility and specificity emerged as the top three reasons. In single-TV Indian homes, a heady cocktail of agility, entertainment and ‘panel of experts’ has helped news channels challenge the viewership of GECs during prime time. Despite this raking in 10% of television advertising expenditure, at best, the share of conversation they command is disproportionate to the revenue they generate. Everyone from brands and politicians to entertainment companies benefited from this.

And then, news broke all boundaries. Rankings that ensured revenue and rantings that ensured eyeballs started getting questioned. Both these elements of TV news have been blamed for toxicity and their high-handed approach. In an increasingly brand-safety-conscious world, this dependence on ranks and rants will have to be revisited. For a majority of brands and advertisers, just rankings won’t be good enough; quality of those rankings will be equally important. Rants from studio-tops won’t be good enough; quality of conversations and accuracy of reportage will become more important. Because eventually, the above two factors will help TV channels command a premium as credibility will always come with a premium.

Aditya Gadiyar, DGM (brand head), VIP Industries

‘News channel business model is broken’

There are two distinct challenges: accuracy of the ratings, and certain news channels airing polarising content that gets the eyeballs. BARC ratings pose a conundrum. When BARC was launched in 2015, stakeholders across the board had seemingly identified all historical wrinkles with TAM ratings — ranging from sample size, methodology and technology to attribution. The events over the last few weeks, however, have brought a lot of the old questions to the fore. Research (even at a massive scale) is an extrapolation which will need to be interpreted subjectively. There will be a differential point of view on various aspects depending on who you speak to. However, it is still far better than flying blind! Also, long-term trends normalise short-term fluctuations.

The news channel business model is a broken one; subscription pricing is capped and nearly 70% of the revenue comes from advertising. ‘Reach’ is the God metric which attracts advertisers and, in turn, incentivises all actions that maximise eyeballs. Effectively, the tail ends up wagging the dog. This works till we hit an inflexion point, when the damage to the brand by association will outweigh the efficiency of deliveries. The difficult task on hand is for news channels to take a long-term view and self-regulate, before all credibility erodes.

Raman Kalra, partner, PwC India

‘Need to invest in data science’

While technological advancements leading to democratisation of content creation, aggregation and distribution have been a boon, they have also brought along their own share of challenges. Fake news continues to be a challenge in the digital world and so does the ‘breaking news’ and ‘debate’-led format of news broadcasting. Being primarily dependent on advertising revenues, news channels have always looked at ways of maximising eyeballs with a more entertaining news coverage model. While this did work initially, consumers now want a more balanced view.

Advertising dollars will never leave the news genre as people will always consume news. The news industry must invest more in data science to connect with consumers better, and deliver news across platforms in the most credible ways. Understanding the consumption patterns for different formats of news coverage across platforms is as important as the news story itself, for the survival and growth of the news industry. Linked to this is the other fundamental shift that the industry needs to adopt soon — unified audience measurement across platforms. Technological advancements and data-driven insights will, most likely, soon transform this space.

Read Also: Why brands advertised cautiously on coverage around late Sushant Singh Rajput on news channels

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