August 02, 2020
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Time For Media Industry To Correct Revenue Models And Reclaim Autonomy

The media Industry should use the unfortunate opportunity provided by the COVID-19 pandemic to correct their revenue models. The industry as a whole has to switch to subscription plus model.

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Time For Media Industry To Correct Revenue Models And Reclaim Autonomy
Inside view of a newsroom in Film City. Noida.
Sanjay Rawat
Time For Media Industry To Correct Revenue Models And Reclaim Autonomy
outlookindia.com
2020-05-11T14:36:50+05:30

India did not require a nationwide lockdown to contain the spread of coronavirus; it required a smart containment strategy. The extended 56-day lockdown has not flattened the curve, but it has poleaxed the Indian economy. One of the collateral casualties of this pandemic has been the media and entertainment industry. However, before we look at the distress in this sector, let us take a bird’s-eye view of this segment.

India has over 1,18,239 registered publications, out of which over 17,573 are newspapers. There are close to 904 TV Channels, out of which 573 channels are free to air and 331 are paid channels. The top five broadcasters own more than 250 of these channels. There are 381 operational private FM radio stations, 289 community radio stations, myriad news and non-news websites. In addition to it, Prasar Bharti runs an elaborate TV and radio network that needs to be rightsized. The country also has a vibrant and thriving multilingual film industry.

Anthropologically speaking, there has been a peculiar problem in the Indian media industry, and to some extent, in the film sector too. It is linked to the sociological evolution of India as a society. While we go to an air-conditioned shop to buy shoes, we prefer to buy our fruits and vegetables from carts buzzing with flies in markets full of dust. Similarly, we are averse to paying for intellectual property for we have been brought up to believe that information and large aspects of entertainment should be free – irrespective of the fact that the very same set of people who demand these freebies continue to pay exorbitant fees from Nursery class onwards till Post Graduation for what passes off as knowledge in our educational institutions.

Thus, there is a spurious dichotomy – as a collective of people we will pay through our nose for spurious education, however, we want our information subsidised, if not free.  Similarly, while we will pay for watching a movie in a cinema hall or going to the circus, we want other aspects of our entertainment to be cost negative, including and limited to theatrical performances.

The Indian print media played a sterling role during the freedom struggle. However, post 1947, it continued to remain largely in the hands of business barons, thereby, earning the sobriquet ‘Jute Press’. The electronic media – radio and subsequently television – on the other hand, remained in government control till 1992 when the policy architecture was liberalised and private players were permitted. However, the way we have doled out private television and radio licenses over the past 28 years is one of the most corrosive stories of India’s liberalsation. It has not created diversity but has led to market fragmentation and a business model heavily skewed in favor of advertising as opposed to subscription.

This skew has had implications for the Freedom of the Press. That global norm being 60 per cent subscription revenue and 40 per cent advertising revenue. In India, especially for Free to Air/Consumer, the revenue model is 100 per cent advertising dependent.  That is why whenever there is a crisis in the economy the first sector that gets hit is the media genre and, to a lesser extent, the film vertical. However, due to the current pandemic, even the latter would be heavily impacted as even if cinema theaters open people would be chary to step into such confined public places.

As the Minister of Information and Broadcasting, I oversaw the largest ever conversion of the Indian broadcasting space from analogue to digital. The entire idea was to create a transparent subscription-based revenue model for the content providers/broadcasters and eliminate the tyranny of carriage fees charged by the carriers—multi-system operators, Direct to Home (DTH) platforms and the Head end in the sky (HITS) operators. However, the exercise did not bear expected fruit as old habits die hard.

Therefore, the media Industry should actually use the unfortunate opportunity provided by the COVID-19 pandemic to correct their revenue models. With Rs 18 lakh crores already wiped off from the Indian economy in 50 days of the lockdown (Rs 30,000 crore loss per day being the cost of the lockdown), there is not going to be much advertising money around for a while.  The industry as a whole has to switch to subscription plus model. It will come at the cost of circulation or eyeballs but that is the paradigm shift that the industry will have to make rather than looking towards the government hat in hand. Many will perish in the process, but this perhaps is the rightsizing the industry requires.

By way of example, if I read three newspapers a day, I will have to bring it down to one and be ready to pay between Rs 5-30 a day per newspaper. If I can now surf 1000 odd channels theoretically, I will have to be prepared to limit it to ten odd TV channels. This will also put pressure on the content providers to curate better content and make the media market consumer-driven rather than advertiser-driven.  It will, of course, create the specter of echo chambers but that is something we will have to self-train to get out of and voluntarily subscribe to a diversity of views.

Consumer loyalty is fickle these days, and therefore, if they find content that is not up to the mark, they should also have the option to quickly switch media subscriptions around. Just as you have number portability across media verticals in a particular genre to begin with, subscription portability should become the order of the day.

COVID-19 has disrupted humankind on planet earth. The Media Industry must get out of its complacency and comfort zones and disrupt their revenue models and get them right. This includes downsizing their production costs, and of course, leveraging the cyber space to the optimum.

A brick and mortar civilisation has evolved over the millennia and a virtual civilisation is evolving. What COVID-19 teaches us is that the future of humankind would lie at the intersection of these two civilisations. With a diameter of 60 nanometers or 60 billionths of a meter, the Covid-19 virus is invisible to the naked eye. However, it has all but eviscerated humanity. But it has also given one chance to think out of the box.

Now coming to what the government should do. Industry associations will come up with wish list for the government that would never be fulfilled. I have been a part of many such savvy exercises over the past 50 days. Unfortunately, they would come to zilch for the government will have other priorities after botching the single biggest health challenge of the century. 

If the media Industry is savvy, there is only one thing they should ask the government for—more functional autonomy. In other words, they should insist that the licensing powers that the government has as a sovereign should devolve to an Independent Media Council going across the media space. The current licensors do not have the intellectual or the imaginative bandwidth to deal with the nuances of the industry. The low hanging fruit is abolishing the Film Censor Board and replacing it with self-certification. TV that supports 42 per cent of the media and entertainment sector needs to be taken out of the clutches of the Telecom Regulatory Authority of India (TRAI). Giving Broadcasting to TRAI in January 2004 was a mistake in the first place. It has hobbled the growth of the sector. Similarly, what is the core competence of Registrar of Newspapers of India? To regulate the Print industry or Broadcast Engineering Consultants India Limited (BECIL) to regulate FM radio or for that matter the duo of Electronic Media Monitoring Centre (EMMC) & Ministry of Information and Broadcasting (MIB) to regulate Private Television Channels?

Bottom line: correct your revenue models and get your autonomy back. Do not look at the government for sops. They will come at a cost – further encroachments into the already diminished editorial freedom.

(Manish Tewari is a lawyer, MP and Former Information and Broadcasting Minister of India. Views expressed are personal.)

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