It is important to enlighten the TV news industry as it helps to understand the structure of the industry and shows how the industry works. Generally speaking, the television news industry is a complex web of different intersecting forces. The TV news industry is highly competitive and various Hindi, English and other language TV channels feature rivalry among the existing competitors. The competition among these news channels is to attract more viewers to pay attention to their channel and the industry is driven by intense rivalry for viewership. The “audience” of these news channels is the buyer power. However, along with viewers, advertisers have become one of the most important forces as a buyer in the industry which affects the mechanism of the industry as well as the broadcast content. Industry revenue is generated by advertisements. However, advertisements depend on the audience of these news channels. As a result, a virtuous circle of advertisers and viewers is created which drives the television industry.
One of the most critical components of the television news industry is advertising. Even though the “buyers” within the industry are made up of viewers or the audience of these news channels, the dispute between these news channels remains to attract more audience in order to attract more advertisements to generate income. Recently, with the proliferation of the media industry across the country, attracting more high-priced advertisements has taken center stage in the industry. According to TAM AdEX, in 2020, the news genre led with a 31% share of advertising volumes, followed by the General Entertainment Channels (GEC) genre with a 27% share. Hindi news remained the second largest language genre for ad volumes and increased its share of ad volumes to 6%. Therefore, a high audience becomes important to attract more advertisements, as media agencies and advertisers look for audience data and general trends when buying advertising time on news channels. However, it has been argued that audience data is not the driving force behind advertising revenue and that pricing depends on other factors such as channel brand, quality, demand from distributors and reputation built at the over the years. Nevertheless, audience data remains an essential element in determining advertising.
With the changing digital landscape in India, news channels are expanding their reach from TV screens via DTH to mobile phones, tablets and laptops via digital channels as well as programming on YouTube and Facebook. News channels have not only made live streaming of their channels available on OTTs and YouTube, but now exclusive online channels and exclusive content are also being made available to digital audiences. According to the FICCI-EY Media and Entertainment Report March 2021, the online news audience grew to 450 million in 2020. India has the second largest digital population in the world at 468 million and the time spent online increased by 32% in 2020. In 2020, online news had the widest reach with 454 million among mobile and desktop users of news sites, portals and aggregators, against 450 million online entertainment users. Additionally, in 2020, downloads of news apps and online magazines grew by 12%, signifying a shift from newspapers and TV as news sources to digital platforms.
Now the question arises: with the rapid expansion of the news channel industry, how does the industry keep up to date with the performance of a particular company in the industry? This is done through a television rating system, where an agency measures the performance and viewership of various news channels. The television rating system holds the power to influence the structure of the television news industry. Such a rating system has a massive impact on the advertising volumes attracted by news channels. Notably, news channel audiences are now split across different spectrums, from DTH to online platforms. However, the rating system simply assesses DTH viewership with a limited sample size, without keeping up with the rapidly changing landscape and nature of the television news industry. Thus, it becomes imperative to have an unbiased rating system mechanism that does not ignore changing scenarios. Instead of a rating agency having this immense power and ability to distort the fair competitive market. The situation requires the TV news channel industry to wake up and find a new way to assess its performance, keeping pace with the expansion of its own industry.
Amit Kapoor is President of the Institute for Competitiveness, India and Research Fellow and Visiting Lecturer at Stanford University; Akshay Bhambri is Research Director, Institute for Competitiveness, India and PhD student at Harvard-Yenching Institute.
