Convergence In Media Conglomerates In India In The Areas Of Competition, Content, Regulation And Technology
There is a shift towards content oriented films including women centric ones from star oriented concepts. Content specific channels help get premier ads and niche audience. Niche content especially targeting kids, youth and women has been showing an upward trend to tap in their spending potential. Due to its mass appeal, cost effective nature and easy to monetise format, fiction continues to be a top draw among the audience, advertisers and broadcasters in both Hindi and regional languages. Cashing in on the mass appeal of sports, media use it even on family oriented and non- sports platforms with regional language voice overs.
In Technology, print readers and advertisers are slowly shifting to digital platforms, putting pressure on circulation revenue. Digital technologies like Animation, Vfx, and Computer Generated Imagery (CGI) in production, post production and exhibition churn out blockbusters like Baahubali. Digital film creates better picture quality, reduced production cost and time, more reach in short span of time through better marketing and revenue generation by plugging in revenue loopholes.
Government’s plans like National broadband connectivity, public WI Fi and digital India help people to consume more media. Vertical integration between content and distribution (Network 18 and Reliance Jio) help telecom companies get a major share of the revenue. Satellite technologies help broadcasters to avoid intermediaries, reach unassailable terrains, besides superior picture and sound quality and add on services like content on mobile and interactive media.
In Competition, while urban markets in India reached their saturation level, regional markets including rural are showing growth. So national and international players either opened shops in regions or provide dubbed content there. Rural India is going to trigger growth in media hereafter. Increasing number of multiplexes help industry garner more revenue (30% of total screens) and work as a hedge for curbing piracy.
Co-production between production houses, between Hollywood and Bollywood, Bollywood and Hollywood with regional cinema are the order of the day. Another trend is films featuring actors with multi ethnicity. National Film Development Corporation (NFDC) has already initiated international treaties with countries in Films. Sharing of production facilities in Print are increasing. Film rights including those of old ones are syndicated to a number of channels instead of being sold to a single channel to exploit multiple revenue options. Studios are strengthening their film library so that channels could negotiate on a bulk basis and advertisers could do the same for spots and launch the promo well in advance.
Indian film industry embraces corporatization with a slew of changes like top down view, cost first approach, legible financial sources like banks, equity and crowd funding, co-production, pre-sale of intellectual property rights, roping in in-house talents and organized production. Hollywood has been expanding Indian film market and getting a rousing welcome even in rural countryside. Introduction of interactive online video (The Wall Street Journal), high quality investigation and analysis driven journalism, hyper local content are survival tools employed by print. Alternatively hybrid model of good paid and free commoditized content is also on the vogue.
Media is into branding camouflaged as socialisation through events and supporting public causes. Media resort to tactics like rebranding of channels, (Star One as Life OK), introduction of two minute break countdown, three episodes in one hour, original content on weekends and premiering big ticket movies on channels other than flagship one, script and an episode bank as a buffer for emergencies, flat newsroom (same source for content across the border) and screening of films to focus groups before actual screening for assessment to stay in contention.
In Regulation, DD Free Dish would give a run for money for private DTH operators riding on Free to Air channels, BARC data and TRAI regulations. BARC would be another game changer as the only agency in Television sector with shareholding of major stake holders and rural data in hand. TRAI would shape up media scene in the country through its far reaching restrictions on cross media ownership and free commercial time until an exclusive media regulator takes over. Regulations and rules have made FM Radio sector, one of the most converged one.
Rating points are expected to provide media a tab on customers and advertisers. Content creators start appreciating long term benefits of Intellectual Property Rights (IPR) through its creation, identification, protection, commercialization and management and upscale fight against piracy.
Benefits of Convergence
Convergence helps media to transform into an industry mode with job profile related hiring, training and retaining of talent and assigning responsibilities keeping in mind strategies. Companies are investing in research and data analytics to understand the audience so that they could customize their product to consumer needs. Cloud of secrecy regarding programs and planning are slowly lifting the veil as public listing, equity investment, collaborative investment and strategic partnerships are increasing. Corporatisation of media improves its corporate governance through good practices like Corporate Social Responsibility (CSR), standard company board structure, internal control, code of conduct, legal compliance, succession planning, performance evaluation, whistle-blower mechanism, compliance addressing system and training and diversity across organisation. Media benefits convergence through cutting edge technology, global brand image, management expertise, global best practices, more government events and collaboration of parties.
Problems of Convergence
Convergence leads to huge profit through monetisation of content. For that media need eyeballs with spending capacity. Registering Intellectual property rights, niche content, fragmentation of audience, localized content, evolution of rating from gross rating point to television viewing time, introduction of channel packages, collection of customer details by multi system operators are measures for better monetization. It translates to cost escalation for audience. Due to acute competition, the advertising spot rates are sky rocketing making spot buying an impossible terrain for local players. Competition has been fragmenting the audience (terrestrial, analogue and digital) and thereby ratings putting a pressure on ad revenue of the channels. Underperforming channels in terms of revenue and content have been facing a phase out. Several shows meet abrupt end on Star TV, Colors and SAB Plus. Distributors use High definition channels and add on services like broadband to leverage on loses of subscription revenues. Competition force broadcasters to offer content across niche genres to upscale reach to generate revenue.
Convergence process
Convergence in Indian media is marked by portfolio diversification, entry to digital platforms, capital infusion and content diversification. Media, Information Technology and Telecom sectors are coming together to provide better value for money. Small players, manage to survive riding on technology and unique content marketing expertise to emerge as disruptions in mass media. Regional channels, losing out on subscription and advertising share benefit from convergence. In short, low cost of entry help channels to proliferate, only to end up merging with big players.
Triggers of Convergence
Analysis of media scene point to a list of factors triggering convergence. First, broadband penetration. National Telecom Policy 2012 increased minimum broadband speed to 2mbps in 2015. Result is more live TV and movies consumption through internet. Second, Hi-tech gadgets like smartphone penetration and mobile internet help people to consume multiple media on a single device. Third, digital technologies like advanced compression technologies and movie aggregator applications result in small file size and easy sharing. Fourth, flexible regulations. National Telecom Policy stresses the importance of seamless delivery of converged services and The Cable TV Regulation Amendment Act 2008 lets telecom to provide Internet Protocol TV services. Fifth, technologies like cloud computing, social media, big data, embedded systems (digital watch), mp3 player, augmented reality (real world enhancement using video and audio), graphics, Google glass and mobility.
In short, increase in consumption growth, digital distribution and presence of foreign players trigger convergence. But it needs to answer reasons of transaction, cost involved, scale of integration or separation involved, niche areas and how to manage the new entity.
