Consumers to lose out if pvt channels go off DD Free Dish3 min read . Updated: 22 Mar 2018, 06:46 PM IST
By losing out a place on DD Free Dish, private broadcasters lose out on a big consumer base that translates into television rating points and, in turn, into ad revenue
Of the total all-India television viewership in the age group of 2 years-plus, 52% is in rural markets, compared to 48% in urban ones. Even for the Hindi speaking market (HSM) in the same age group, 51%, that is, a majority of the viewership, lies in rural India. Again, within HSM, 52% viewership for the general entertainment channels falls in rural markets compared to 48% in urban ones.
It is against the backdrop of these numbers, provided by Broadcast Audience Research Council India, that one must view the controversy related to the government suspending the auctions for DD Free Dish—its free-to-air DTH (direct-to-home) platform—to private TV channels. Since DD Free Dish caters precisely to these markets, if the government doesn’t auction slots on the DTH platform, a lot of private channels will miss out on the vast rural markets.
Currently, there are approximately 72 TV channels on Doordarshan’s DTH platform Free Dish, including private general entertainment channels like Zee Anmol, Star Utsav, Sony Pal, Rishtey, and news channels like Aaj Tak.
After the information and broadcasting ministry decided to review the auction of slots on DD Free Dish, public broadcaster Prasar Bharati—which operates Doordarshan and All India Radio—revised its FY18 revenue target downwards. That is probably because auction on the DTH platform was a revenue earner. DD Free Dish earned Rs85.10 crore in the e-auction held in July 2017 where it awarded 11 channel slots to private broadcasters. No auction has been held after this and the government is currently reviewing its policy. Channels whose term on the platform is nearing completion are worried that they may be knocked off the platform if auctions are not held.
Why private broadcasters are worried is easy to see. By losing out a place on DD Free Dish, they lose out on a big consumer base that translates into television rating points and, in turn, into advertising revenue.
According to Neel Kamal Sharma, chief operating officer (buying) at Madison Media, DD Free Dish is estimated to reach 22 million homes but its actual spread may be higher. The service is free from any monthly payment for content and only incurs a one-time equipment cost which is available at multiple, and, hence, difficult to track points of sale. “Since it is free DTH, any channel which is on this platform automatically gets to reach a huge subscriber base. As a result, many paid channels have converted back to being free-to-air (FTA), to reach out to the masses, especially in smaller towns and rural areas," he says.
Through DD Free Dish, advertisers see an opportunity to reach out to their consumers in these markets, which results in increased revenue opportunity for broadcasters. “This has led to many FTA channels across genres being launched in the past few years to leverage this business opportunity with least investment and higher returns," adds Sharma.
Meanwhile, the information and broadcasting ministry, which decided to review the DD Free Dish auction, is currently working on a new policy for its platform. Earlier, Doordarshan used to have an auction once in two months to award vacant channel slots on DD Free Dish to private broadcasters. For the year 2016-17, it earned Rs264.17 crore revenue from DD Free Dish.
The policy is being reviewed probably because the government wants to popularize its own television channels on DD Free Dish rather than giving prime slots to private channels. Besides, it feels that the private channels earn a lot of money riding on its platform and is thus said to be thinking in terms of allowing channels on DD Free Dish on a revenue-share basis.
However, executives at private channels argue that being on DD Free Dish offers only incremental benefits and should not be seen as a money-spinner. Firstly, to be on DD Free Dish, a channel has to become FTA and loses out on subscription revenue. Secondly, premium brands shun these channels as their viewers are low-paying consumers. Thus, broadcasters lose out on premium pricing.
Broadcast executives argue that a revenue-share formula with DD Free Dish may render the platform unviable for private channels.
While ostensibly the government probably wants to earn more revenue by reviewing its policy, critics argue that in its attempt to knock off private channels from the DD Free Dish platform, it may be killing content plurality, especially in the news genre. In that case, the consumer will be the biggest loser.
Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff. Respond to this column at email@example.com