PECKING ORDER

Indian TV viewership and ad demand is witnessing a de-growth

foray into quality content with a Hindi movie channel which in spite of good content fell flat as distributors did not agree to its a la carte pricing. This year a lot of new channels either got launched or got converted to FTA with the intention of garnering mass viewership. Meanwhile, the government is not renewing the licences of the FTA channels, so where does it leave them? Drift to whatever, whenever A recent report by Trai showcased how DTH active subscriber base growth has slowed down from 52 per cent (AprJune 16 over Apr-June 15) to 8 per cent (Apr-Jun 17 over Apr-Jun 16). Compared to that the OTT user base had moved from 63 million in August ’16 to 164 million in August ’17. As the drift moves to smartphones pre-embedded with OTT apps, low cost of data and the freedom to watch whatever, whenever, wherever, does it help the Indian broadcasting industry to launch new channels? Laws of pure economics It all boils down to demand for content and advertising. While both consumers and advertisers are welcoming good content (as we can see from the growth of time spent on Netflix), question is if it is via new channels? If not, then why are these channels being launched? Close to 70 new channels were launched this year (table), mostly in genres that saw no growth in viewership or inventory demand from advertisers. A few of these channels, mostly from the news genre, are more like mouthpieces of political parties, but what about the rest?

More channels means more supply. And supply not supported by demand leads to price erosion in the long run. We can already see that in some genres. I won’t be surprised if the fire engulfs the whole forest sooner than we imagine.