Why digitisation is good news for you

Vanita Kohli-KhandekarCome Dine With Me pits four people in a fun competition. Each has to cook and host a meal for the other three. On their way home in the taxi the guests are asked to rate the host. The person with the most points at the end of day four, wins a thousand pounds. It has some nasty moments, some hilarious ones and some sad ones. But the human drama goes way beyond the food as people’s biases are revealed. The show used to air every weekday on BBC Entertainment. It was one of my favourites along with Hustle, Sherlock and Spooks on the same channel.

BBC Entertainment was pulled off air on December 1. The reason — both CBeebies, BBC’s kids channel, and BBC Entertainment were not making enough money. Both are specialised, somewhat niche, genres in India. They cannot reach the numbers that advertisers will flock to. So subscription revenues were key. With those not coming in, BBC Worldwide pulled the plug on these two in India.

Clear picture: In the next two years, digitisation will push up broadcasters’ revenues and therefore niche programming.¬†

What is not clear is why it did that in the year that digitisation is finally taking off. By the end of October, the three metros had, largely, met their digitisation deadline. If the ministry of information and broadcasting does as good a job with the next 38 towns, due to be digitised by March 2013, then we are set for meeting the national deadline by December 2014.

At a very basic level digitisation means better picture quality, an electronic programming guide and easy navigation among other simple things. That is in the short run. In the long run, because of the wonders it does at the backend, digitisation will mean that channels in niche areas, such as golf, romance or even classical music, can make money. It means more choice, if you are willing to pay more.

Here is how it works. 

Television reaches 148 million homes in India or about 740 million people. The average price is Rs 150-200 per home, the money you pay your cable operator. However, a bulk of this money stays with him instead of getting passed on to the signal distributor (like Hathway) and broadcaster (Star or Zee). In the US, for example, 70 per cent goes to the broadcaster, in India only 15-20 per cent does. This happens because of structural flaws in the way cable has developed in India.

This anomaly has meant that Indian broadcasters are highly dependent on advertising, which in turn means that they are very sensitive to viewership numbers and ratings. This has ensured that only channels and shows that can get huge numbers on reach are pushed by a broadcaster. This has more or less killed all attempt at programme experimentation. The foreign channels that do offer specialised programming, such as TLC or Nat Geo, have to either depend on ad revenues or align with a larger network to get distribution and advertising leverage.

However, digitisation changes that. Now the distributor, say a Hathway Cable, sells you a dabba through which you watch television. This dabba or set top box comes from the cable operator. So every home on Hathway’s system is mapped. There is no scope for not declaring all consumer homes or not sharing revenues. This is already happening with the 50 odd million DTH homes where the operator, say Tata Sky, is selling you a dabba directly. In short the dabba acts as a TV meter of sorts, ensuring that bills are paid and monies are passed along the chain.

If all of India is digitised, more than Rs 10,000 crore will flow back into the broadcast industry over the next five-odd years. This reduces dependence on advertising and gives broadcasters the flexibility to experiment and offer more specialised or niche content for a price. Till they did not know who the subscriber was, where he was and what he was willing to pay, this was difficult.

Some of these changes are already evident. ZeeQ, a kids channel from Zee, launched in November this year at Rs 77 a month. This heavily research-based, edutainment channel has not factored advertising revenues into its planning. It may fail or work, but what it signals is that the process has begun.

Hope you are back soon, BBC Entertainment.

The writer is a media specialist and author. Follow her on twitter at 

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