Will current P&L of news channels support high bids for slots at DD Free Dish auction?

Does the latest round of bidding by news channels for DD Free Dish make business sense? Unlikely, given the overall pressure on the margins observed by the vast majority of the television news channels in India.

It is reliably learnt that the bidding price for one slot scaled a record figure of about Rs 20 crore. Industry watchers aver that such a high bid defies business sense apart from putting additional undue pressure on the news television genre.

It is also learnt that a key feature of the latest auction by the public broadcaster has been that news channels with relatively not so strong balance sheets have bid maximum in the latest ongoing DD Free Dish slot auction. In contrast, news channels that have maintained a healthy top-line bottom-line orientation have made fairly reasonable bids for the available slots.

For instance, sources say, News18, part of the Network18 bouquet of channels, bid a maximum amount of Rs 19.85 crore. This was followed by India TV at Rs 18.65 crore. Bharat 24’s bid stood at Rs 17.15 crore.

As against these, TV9 Network made the lowest bid at Rs 14.55 crore.

Experts point out that while TV9 Network has of late achieved robust revenue, News18 parent profitability has been under pressure.

A comparative assessment of the bids received so far shows that there is an element of prudence visible even with legacy players like Aaj Tak, who is said to have bid Rs 15.10 crore, while Times Navbharat apparently bid Rs 15.15 crore. News Nation is said to have bid Rs 15.05 crore.

Interestingly, the ongoing DD Free Dish auction has witnessed a U-turn by television news bodies. First, the two news television industry bodies – the NBDA and NBF – together petitioned the Information and Broadcasting Minister to reimagine the auction process.

The two bodies earlier wrote to the Union I&B Minister on March 14, seeking a meeting with him and Prasar Bharati officials, pending which their respective member channels would not participate in the auction.

Prasar Bharati kicked off the latest round of bidding on March 13 effecting a change in the format. Upset over the new format, news industry bodies argued with the Minister that the new formulae was “skewed against news broadcasters” and that “there were fewer slots available” under the new state broadcaster prescription.