AgVoice | Digitization will lead to a paradigm shift on monetization strategies

The Internet has in-fact empowered audiences to seek control over their entertainment habits, granting them the ability to consume media on their own and often on unique terms. This ability to deeply personalize what traditionally used to be a static user experience in Television has created a number of technological, social, ethical and commercial concerns, which actually by digitization has been addressed for Television to survive this most recent technological and social transition.

Digitization has several advantages over analog TV, the most significant being that digital channels take up less bandwidth (and the bandwidth needs are continuously variable, at a corresponding cost in image quality depending on the level of compression). This means that digital broadcasters can provide more digital channels in the same space, provide high-definition television service, or provide other non-television services such as multimedia or interactivity. Digitalization also permits special services such as multiplexing (more than one program on the same channel), electronic program guides and additional languages, spoken or subtitled.

The last mile Set Top Box/Integrated Receiver Decoder will definitely help reducing the under declaration of subscriber base. Industry regulator TRAI has proposed the four-phase migration from analog cable TV to a fully digital addressable system, starting with the four metros, of course, the move, which has long been resisted by the cable mafia, and with good reason, will spell doom for them.

The Indian cable industry is worth Rs 270 billion and is the third largest in the world after China and the US. The number of TV homes in India grew from 120 million in 2007 to 148 million today. Cable reaches 94 million homes with 88 million analog connections and 6 million digital ones, while DTH has commanded 41 million subscribers.

Of these 88 million analog households in the country, local cable operators (LCOs), who were charging Rs 160 per month, rake in approximately Rs 170 billion in revenue. Nearly 80 per cent of this, around Rs 136 billion is retained by the LCOs, and a mere 20 per cent, or Rs 34 billion, is declared, and half of the declared revenue, that is Rs 17 billion, is passed on to broadcasters to meet content cost.

After digitization the high cost of advertising on TV channels is expected to be a thing of the past as increased revenues from subscribers are expected to make up for revenue and bring down the advertising tariffs of broadcasting television companies.

The above mentioned impact are just a moderate beginning, actually the most extraordinary shift in the disparity between old media and new consumption behaviors will be primarily because users have discovered new means of information access and how this information can be heavily personalized. Traditional broadcasted Television (old media) is a highly inflexible medium that can only be consumed in pre-packaged linear ways and it's this content model which the entire Television industry has built is business models. Until recently, control over distribution channels was relatively easy, and this control gave commercial networks the power to monetize specific demographics. Primarily, as mentioned above, the monetization strategies were structured around selling consumer attention (advertising to audiences).

Once such content is available in digital format, it can be accessed through several devices, channels can be broken down into constituent parts, advertising can be avoided and programs can be consumed on demand, and in different locations, according to consumers' individual preferences. In other words, anyway, any place and anytime, something quite foreign to the established status quo of successful commercial Television networks. However, despite technological advances and changing audience behaviors over the past decade (favoring new and exciting content delivery mechanisms) the Television industry has been quite slow to find a place in this emerging new paradigm.

Increasingly, programs are utilizing the web, and specifically social networking (such as Twitter and Facebook), as a cost effective means to increase audience engagement. Websites, Video streaming (via catch-up services), blogs, and Social Networks can be easily created to catalyze an audience and create "lock-in' which aide in stabilizing audience numbers and potentially even increasing them through word-of-mouth.

The Film and Television Industries have learned from the music industry's mistakes and the subsequent success of legal music download services, such as iTunes and are slowly embracing them, however, the burden of geography still handicaps many users from getting what they want, when they want it.

New media is something that the mainstream will soon expect from the Television Industry. New media is about breaking down the walled garden of traditional media and stripping away all geographical bias and enhancing the social relationship. People now see Television as an invested social experience, one to be shared discussed and participated in. The concept of Prime-time Television is starting to disintegrate and soon will be gone altogether, as audiences simply download or time-shift to the program they wish to watch at the time. Interestingly, only Reality Television and Special Events (e.g. Cricket, Olympics, Sport Finals, Live Events) are likely to avoid this trend and be watched live, partly because of the need audiences will have to share these experiences in real time.

The next generation will be the one to watch closely. They will be an entire generation who've not known Televisual media any other way, with an utterly transformed mode consumption and interpretation. A generation of Television viewers who don't care which network a program comes from, only care that it's right for them, at that moment, to be shared and discuss. They will expect to watch Television in a post-scarcity world and in contrast Television's current status quo, expect Television to adapt it's broadcasts to everyone's own personal schedules. While the demands of unique personalization may take the Industry more time to adjust to audiences pulling them in every personal direction, once the Industry embraces new media we will again reach equilibrium. Despite the possible short-term struggles with the ethical, commercial and technological challenges, the future looks bright for all Television audiences because ultimately digitization allows new communicative, journalistic and content consumption which will force us to reformulate the existing paradigm. | By Rajiv Mishra, CEO, Lok Sabha TV

About the writer:

Rajiv Mishra, CEO, Lok Sabha TV is a broadcast/media professional and founder of Electronic Media Rating Council of India. His contribution in TV Ratings methodology in Europe has been recognised by ITU/EBU in 1996 at Geneva.

He did Masters in Broadcasting from IAB, Montreux, Switzerland, MBA in Media Management from MCNY, USA and a Graduate Certificate Course in Multi-Media from UCLA, USA.

He has worked for Hindustan Times, Star TV, TV Asia of USA, and BAG Films & Media. He is the nominated Member of various Media Advisory bodies in various Ministry of Government of India. Rajiv is currently working with Lok Sabha TV as CEO.

Rajiv is also the founder and first President of Association of Radio Operators for India (AROI). AROI is the industry representative body of all FM Radio Broadcasters/Stations of India. He has recently been nominated as Member-Working group IV of planning commission for Information and Broadcasting/IT/Telco and Convergence sector of india. The group will develop policy paper on Radio/Television/Telco and will also develop a strategy paper for audio/video on hand held devices and India's digital switch over plan.

His understanding of Convergence Industry and Digital future is exceptionally good.

Disclaimer: The opinions expressed in this article are those of the author, and do not reflect in any way of Adgully.