TV industry is taking baby steps with demand-led pricing: Prathyusha Agarwal
In keeping with the TRAI-mandated tariff regime, all channels have unveiled their different channel packs under different price brackets. The deadline for migrating to the new tariff regime is January 31, 2018, which TRAI has said won’t be extended. The new tariff regime came into effectfrom December 29, 2018.
ZEE has introduced its Family Pack offering 24 channels at Rs 45 per month. Speaking of the core insight that shaped the configuration of ZEE’s packs, Prathyusha Agarwal, CMO, ZEE, said, “When it comes to consumption of television content, everybody in the family has different demands and the monthly purchase is made keeping everyone’s preferences in mind. Hence, our approach towards pack configuration has been ‘family first’ - offering the top genres such as Entertainment, Movies, News, Music and Lifestyle that are critical to the everyday entertainment needs of the entire family! The Zee Family Pack offers top channels across genres like Zee TV, Zee Cinema, Zee Marathi, Zee News, Zee Café, LF making it the superhit entertainment choice for consumers.”
In an interaction with Adgully, Prathyusha Agarwal speaks about the channel pricing strategy, the value proposition, the fate of FTA channels and more. Excerpts:
Is the pricing is now competitive across channels?
Yes, absolutely. It is demand led price. We have looked at the brand equities, the brand power index of each channel. We have also looked at the consumption of a household and that went to making the packs a very attractive proposition. Thus, 24 channels at Rs 45 is a great value proposition for any consumer, and it is not just any 24 channels, these are the top channels in each genre and extremely competitive from a demand perspective. We will visit these rates every three months and look at how it is moving and how it will stabilise. This is the first time and the sector is taking baby steps with demand led pricing.
With the new tariff regime are the days of FTA channels over?
I don’t think so. There are two different things to it. There is the TV dish, which is the platform and it is a stronger medium dish I think in the whole objective of involved choice. We are looking at every channel in the FTA bracket, there is an involved choice and hence, our effort is to get them in this bouquet. If it is just Rs 10, that is like a throwaway price, but moving towards the involved choice region. It is a directional thing towards choice, that I’m choosing consciously, be it Zee Anmol, Zee Anmol Cinema or the other channels. That is the objective with which we are driving it and I think it is premature to say if it is all over for FTA channels or not. FTA channels are a different platform built for a different purpose. In the regions where this exists, these channels will now be a part of the Zee Family Pack and consumers will make a conscious choice.
However, DD FreeDish remains the same, there will be no changes to it.
Could you throw more light on the Rs 130 being mentioned as platform fee in ad campaigns?
Rs 130 is the access fee for network capacity that one is paying to the cable operator as distribution fee. It is the fees over and above what you will be paying for your chosen channel packs. In simple terms, it is the technology and access fee and the service fee along with the content fee for the channels that you want to watch.
Will the ARPUs for the broadcasters remain the same?
That is something which will play out because this is the first time that such a tariff regime is getting implemented. I think it is too premature to say whether ARPUs will grow or decline or stay the same. But I think as an overall choice regime, it is only going to make it finer for consumers to choose and hence, will help in building better channel brands. Will that directly translate into higher TRPs? We will have to wait and watch. Currently, we are welcoming it in a big way as the power of choice is in the hands of the consumers. Translating that into revenues is a long-term process and how that will play out will be a long-term game.
Hathway’s communication mentions that the cable service provider is offering a channel pack for Rs 100. What does this mean?
I can talk about the broadcasters and their pricing, but cannot comment on how the distributors or MSOs will price the bouquets. If someone is setting the price at Rs 100, then they have a pricing variable and they are choosing the price that they want to.
What about the LCOs?
There is enough confusion because all the conversations on it are about the channel rates being increased. I think everyone is being responsible – from the MSOs to the cable operators, each of them are putting together consumer-friendly packs and everyone is gearing towards creating the best pack for their set of consumers. Indians have a set budget in mind, and we either trade up or trade down. If I want something then I will reallocate my money for the budget I have in mind, but if I want something else, then we will be willing to spend more. Indian consumers have been very conscious consumers, for instance, when they go for a movie, they won’t mind spending a thousand bucks on it, because they know the value that they are getting. Therefore, if they find a channel pack that is of great value to them, they will be willing to pay for it.
Do you envisage a shift of TV viewers to apps?
I think we are underestimating the number of choices that one gets through a TV subscription vis-à-vis what they will get if they take 4 app subscriptions. If we look at the breakdown of the cost, one single cable connection gets me everything, whereas on the other hand I have the broadband cost, then I have to pay for different apps and have to shift between apps to access different kinds of content. It’s not a ‘this or that’ comparison. I will be subscribing to different services for my specific consumption, not necessarily a ‘this or that’ choice.
This is only applicable to metro DAS 1 consumers, if we take a DAS 3/4 consumer, I don’t think anyone would be willing to bear broadband fees in addition to the app subscriptions. It is just not a comparable comparison in that sense.