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Scam News: More Bang, Fewer Bucks

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The last quarter of calendar year 2010 saw a perceptible shift in media news content. Scam-related news exploded. Maharashtra chief minister Ashok Chavan lost his job to the Adarsh Housing Society expose. So did Suresh Kalmadi for the kick-backs in the award of contracts during the Commonwealth Games (CWG). Mind-boggling numbers tumbled out of the 2G telecom spectrum allocation, and the minister in-charge, A. Raja, had to finally call it quits.

The fourth estate is once again flexing its muscles. The wrongdoings of politicians and stories about rogue corporate operators siphoning off public assets is the flavour of the season. In many ways, the shift of news media is deliberate and intended to restore its heavily-damaged credibility. And it seems to be working.

What is not that apparent, though, is whether news television has been able to monetise the shift in eyeballs. Do the numbers indicate that, in fact, audiences have shifted to news channels? And if so, is more ad revenue flowing in?

News People Watch
News has always been a very small portion of the television universe. Now, even that is on a decline. The audience share of English news was on an upward trajectory till 2007, when it peaked with 0.7 per cent. Thereafter, it has steadily eroded, to just 0.3 per cent in 2010. Hindi news peaked in 2007 with an audience share of 4.8 per cent, was flat in 2008 and has declined to 3.4 per cent in 2010 (see ‘The News Leaders', page 52). Expectedly, this loss has been the gain of the Hindi general entertainment channels (GECs). In the 2006-08 period, Hindi GECs' share was flat at about 23 per cent. In 2009, it shot up to nearly 27 per cent and to 29.6 per cent in 2010.

"Television viewing has not gone up. Audiences are split between increasing number of channels," says Meenakshi Madhvani, managing partner of Spatial Access Solutions. "Data shows that people, especially the youth, are spending less time per day on television."

Interestingly, though, regional news channels have bucked this trend and have shown robust growth. From a share of just 1.7 per cent in 2006, regional news has more than doubled its audience share to 3.6 per cent in 2010. Local news and news in local languages seem to be the way of the future.

Scam-related news, too, did not have much of an impact on viewership. English news' audience share went up only marginally from 0.46 per cent (July-September) to 0.48 per cent (October-December). For Hindi news, it in fact declined from 6.58 per cent to 5.57 per cent (see ‘Low On Impact').

Significantly, a look at the top stories on news channels in terms of time share shows that while scam-related ones topped on English news, not so for Hindi news channels. The 2G scam, for instance, was the top story on English news channels with a whopping time share of 30 per cent in December. In October and November again, the Adarsh Housing Society, 2G spectrum, Karnataka chief minister B.S. Yeddyurappa's land allocation scams and the Lalit Modi-IPL imbroglio were among the Top 5 stories.

The top stories on Hindi news channels were startlingly different. Except for the 2G spectrum scam, which was heavily watched, no other scam was a top story. The preference was cricket, Zodiac forecasts and the Varanasi blast story in December, and the Bihar Assembly elections in November 2010. US president Barack Obama's India visit in November, however, was top news for both English and Hindi news channels.

Says L.V. Krishnan, CEO of television audience tracking agency TAM Media: "The data takes away from the perception that people only come in for sensational news. It is not negative news alone that gets audiences, but relevant news. Big ticket international events like Obama and sports are always a big draw, too."
Kapil Anand, who heads audience tracking agency Target Marketing Services, explains, "Stories that affect the common man or directly deal with national pride always get viewership. Scams get a better viewership on English news as these were scams by the rich for the rich."

Advertising Slowdown
The advertising growth chart has predictably followed the path of audience shares. Till 2008, there was a robust growth in advertising on news channels as advertisers and media planners discovered that news channels offered a more efficient alternative to other media platforms such as print and Hindi GEC channels. "Money has been moving into news channels in recent years as brands found they were more cost effective for longer campaigns than the traditional newspaper medium. Even FMCG brands began including them in their media plans," says Jasmin Sohrabji, MD of media planning and buying agency OMD India.

Of the approximately Rs 10,000 crore that is invested by advertisers in television annually, the news channels' share crept up from around 5 per cent at the beginning of the decade to around 12 per cent currently. Now, it is flat and may even slip as other segments grow faster. "News channels take in around Rs 1,300-1,400 crore annually, of which Hindi channels account for about Rs 800 crore. But, against television's overall ad revenue growth of 13-15 per cent, news is clocking just 4-5 per cent," says Ashok Venkatramani, CEO of Media Content and Communications Services (MCCS). Regional news again bucks the trend with galloping growth rate of around 15 per cent. 

Slow ad revenue has hurt the bottom lines of most news networks; the only ones in the black are those that have strong regional channels. TV Today, which operates Aaj Tak, Headlines Today and radio channel Oye! 104.8FM, showed lacklustre results with a net loss of Rs 6.6 crore on revenues of around Rs 125 crore for the first half of FY11. G. Krishnan, CEO of TV Today, says this was mainly due to losses in radio. NDTV was also in the red by as much as Rs 99 crore for the first half of FY11 on revenue of Rs 165 crore. On the other hand, Zee News — whose five of seven news channels are in regional languages — managed to make a marginal net profit of Rs 9.7 crore on revenues of Rs 201 crore for the nine months ended 31 December 2010.

In Need Of A Long-term Plan
There was little shift in eyeballs because of the flurry of exposes; and advertisers and media planners do their budgeting and placements long-term on predictable events. For instance, Hero Honda, which invested heavily in the CWG games, planned an effective campaign around the torch relay that opened the games.

"News media is never bought for scam stories. Most of the buying is long-term, (based) around festivals, elections, budget reporting and sports and cricket," points out MCCS' Venkatramani. Adds Sohrabji of OMD: "Scams and breaking news by their very nature are unpredictable; so how can we plan for these events?"

Breaking news and serious exposes help news channels in other ways. "Breaking news has no immediate impact on a news channel. But it does impact the brand and credibility of the channel in the long run as without good breaking stories, audiences and advertisers may both go away," says TV Today's Krishnan.

At the same time, news channels are painfully realising that by promoting entertainment and sports, they are aiding Hindi entertainment and sports channels. For instance, the day the Indian team was announced for the ICC World Cup (17 January), there was little else save cricket on news channels. This only helped promote the live matches and ESPN's channel share in the long run. A report on Bigg Boss 4, an entertainment story, was among the Top 5 viewed stories on Hindi news channels in November. This helped entertainment channel Colors.

"After the GEC channels, news channels have the highest reach. On the remote, GEC and news channels are next to each other. So you have the strange scenario of news channels urging people to go back to entertainment channels," explains TAM Media's Krishnan.
Till news channels continue to piggy-back on Bollywood and sports and fail to carve a specific space for themselves, this quixotic problem of lack of identity will persist.


(This story was published in Businessworld Issue Dated 07-02-2011)