Removing the froth

Does it make sense to deter ‘non-serious' players from entering the broadcasting space and launching TV channels? Well, it depends on what one calls ‘serious'. If it refers to content, very few channels — including the top ones that beam prime-time sitcoms of the saas-bahu genre — would qualify as serious. One would presume, therefore, that the Government's recent decision to weed out ‘non-serious' players stems essentially from doubts regarding their seriousness about the business per se rather than any concerns over content or quality. That explains why it has chosen to link seriousness with the net worth of prospective operators. A fresh entrant is required, henceforth, to have a net worth of Rs 20 crore for up-linking of news and current affairs (NCA), against the earlier Rs 3 crore, while the increase is from Rs 1.5 crore to Rs 5 crore for those in general entertainment (GE). Further, for every additional channel, the NCA players will have to augment their net worth by Rs 5 crore, with this at Rs 2.5 crore for extra GE channels. All these norms, however, apply only prospectively and not to the existing 760-plus channels. A clear case, perhaps, of a regulation that does more to protect the interests of incumbent players from heightened competition than keep non-serious prospective players out.

That raises questions about the very futility of the latest exercise. From a pure business perspective, it is probably best to leave the judgment of what is ‘serious' to the market (in this case, the viewer). Here, the market does seem to have formed its own judgment. Take the most lucrative segment of GE and within that the Hindi channels that make up the biggest advertising market. The Television Rating Points (TRP) indicate that three channels — Colors, Star Plus and Zee TV — dominate viewership. These, along with Sony and Imagine, would account for a 90 per cent-plus market share. It is no different in the English and Hindi NCA segments, the regional language space, or even business channels, where the top two or three take away all the eyeballs.

This only suggests that the hundreds of channels that have sprouted over the past decade were probably never started with the idea of making money in the traditional sense of expanding viewership and monetising it through either subscriptions or advertising revenues. The attempt seems to be one of presenting a channel to prospective investors as one with potential and thus seeking a premium price for an exit. The possibility of extra-business considerations swaying the initial decision too cannot be ruled out — the number of channels patronised by political outfits is a pointer. The virtual absence of entry barriers in the business has certainly helped them. But whether that justifies erecting these now — unless players are squatting on transponder capacity— is another matter.

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