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Can Sircar turn around Prasar Bharati?

Source : BUSINESS_STANDARD
Last Updated: Tue, Oct 23, 2012 21:10 hrs

In his imposing office just a stone’s throw away from Parliament House, Jawhar Sircar has two large LCD TV sets mounted on the wall. On one, he keeps a close tab on his own Doordarshan channels and, on the other, he scans competing private players. His desk is strewn with files, press clippings and a note undertaking a financial analysis of all broadcasters, a majority of whom are also in the red. Sircar, who has just got Rabindranath Tagore’s works translated into Italian, points to one of the LCD TVs: “Look at the background of the Doordarshan newsroom, it looks as good and professional as any other private channel now,” he says with pride.

Sircar, an IAS officer from the West Bengal cadre and now the CEO of Prasar Bharati, took over the reins in February and is, of course, not content with just making superficial changes. He is determined revamp the public broadcaster — which has recently been hit by frequent changes in the top slot, as well as financial scams — so that it can get back viewership, as well as advertisers who seem to have forsaken it for aggressive private channels.

So, what are the immediate challenges he faces? “Our operational expenses are Rs 2,000 crore annually and we make revenues of Rs 1,400 crore to Rs 1,500 crore, most of which are through advertising. It is this gap that we have to meet. And, I don’t find any reason why we cannot, ” says Sircar confidently.

PRASAR BHARATI: QUICK FACTS
  • Prasar Bharati operates 37 TV channels (Doordarshan) and 262 radio stations (AIR) 
  • It reaches 150 million homes through Doordarshan
  • Annual operational expenses are Rs 2,000 crore 
  • Annual earning is Rs 1400 crore to Rs 1500 crore
  • Employees – Sanctioned 48,022 (AIR: 26,322, Doordarshan: 21,700)
  • Filled-up positions: 33,800 (AIR: 17,853, DD: 15,947)
  • Vacancies: 14,222 (AIR: 8,469, DD: 5,753)
  • No recruitment for the past 16 years. Govt likely to give nod for filling up 3,452 critical posts soon
GOVT’S FINANCIAL ASSISTANCE
  • Spectrum fee waived: Rs 12,000 crore
  • Govt to pay salary for all its employees
  • Govt to take care of augmentation costs
NEW PLANS
  • Prasar Bharati to take care of software costs (about Rs 300 crore annually), maintenance and marketing
  • Expects to increase revenue from advertisements, especially government campaigns, monetising centres by renting out space for ATMs and billboards and selling airtime slots at DD

A windfall of bonuses
But, Sircar has also been plain lucky, as the government has given him a huge bonanza. Just a few weeks ago, the cabinet waived off the Rs 12,000 crore which Prasar Bharati had to pay to the government. That included overdues of spectrum fees. The government has also agreed to pay the hefty salary bill of its sanctioned 49,000 employees (currently, it has 33,000) and take up capital and augmentation costs which include investments to introduce digital terrestrial services replacing analogue ones across the country.

This means Sircar has to just find the money for some operational costs which include maintenance, software expenses and marketing. That could have made his life so much easier— but many say Sircar’s confidence in bridging the still yawning gap in revenues might be misplaced. That is because of Prasar Bharati’s poor record in garnering advertising. This is reflected in the fact that it has a less than 10 per cent share of the Rs 15,000 crore earned by broadcasters every year through advertising. And, this is despite the fact that its reach is the highest — a staggering 150 million homes across the country. In comparison, Zee is available in just 32 million homes.

What is more worrisome is the fact that a bulk of the costs does not go into making quality software which would attract customers and get them viewers, but into running its terrestrial network on to which 20-22 million subscribers are hooked. But, the government mandate is pretty clear: These consumers have no other way to be reached and forms of news and entertainment have to be served to them irrespective of cost.

Prasar Bharati officials admit that 60 per cent of the cost goes in maintaining this terrestrial network which, of course, gives hardly any return. As a result, it only forks out Rs 300 crore on software development, or a mere one-fifth of the total cost. This, again, is in contrast to competing broadcasters who spend more than half their expenditure on procuring software. To make matters worse, it has an upper limit of Rs 6 lakh for programming.

Creative revenue generation
So, where will Sircar get the additional revenue from? He says contrary to what many believe, government advertising is not so big for Doordarshan — it attracts about Rs 300 crore annually, the rest coming from the private sector. Sircar wants to increase that share. “The government spends about Rs 1,500 crore on advertising. There is a lot of potential for us to tap more of the campaigns and increase our share,” he says.

He is also looking at expanding the scope of deals with private broadcasters to simultaneously telecast a programme across private channels, as well as on Doordarshan. This would be based on a revenue-sharing deal. Sircar has already undertaken this with Star TV’s popular show Satyamev Jayate and has earned a cool Rs 14 crore, while Coke has experimented the same with its show Coke Studio.

Sircar is also looking at increasing the cap of Rs 6 lakh per episode which has been imposed. He says he could go in for more expensive programmes and attract viewers, provided these are funded through advertisements and sponsorships.

There are also some uncharted areas that Sircar is looking at: Monetising the 600-odd kendras and offices and 341 studios, which are now being transferred to Prasar Bharati. He says while selling them is out of question, it could get rentals by renting them out as, say, ATMs, or counters, and even generate money by permitting billboards. He is also trying to look at new ways of selling air time on Doordarshan. So, one such idea being floated is to offer slots with a minimum guarantee and with a share in the advertising revenue in case of an upside. This ensures an assured return.

Also, Doordarshan had virtually stopped advertising, especially its programming, unlike private broadcasters who spend a lot to push their key offers. Sircar is hoping that it would be able to fork out Rs 100 crore on advertising and he has already got Doordarshan programs listed in newspapers.

Of course, Sircar and his men know that there will be a need for some organisational restructuring in many areas to refocus its business. For instance, he wants to set up a separate vertical which would be responsible for direct-to-home (DTH) so that it can take on the challenge from private companies. Similarly, there is hardly any estimate of Doordarshan’s viewership abroad though its signals are available in many countries. Sircar has mooted the idea of having a separate vertical akin to BBC World, which would run the overseas business. Third, but not the least, he has been able to push the government for appointment to 3,452 critical posts of its 14,222 vacant positions, so that he can incentivise his staff by giving them promotions (most of them did not get any for the past 16 years) and get new blood from outside.

Challenges
Yet, competitors and advertisers say the going will not be easy. Most media planners say that they use Doordarshan only for some products targeting rural India and don’t see any change in their strategy in the near future. So, getting additional revenue in a market slowdown might be a tough task. “Companies that sell products for the rural mass do opt for advertisements on Doordarshan. But, they only consider it when there is no other channel available, mainly in the terrestrial areas. In urban areas, Doordarshan is not considered as a medium for advertisements. I don’t think this will change,” says a senior executive of Media Planning Group.

Also, private players say the fundamental problem is that Doordarshan’s positioning has been unclear and contradictory. Says a CEO of a top TV channel: “Nearly 70 per cent of their programme is cinema or entertainment, based on which they are competing directly with private channels who do it much better. That should not be the focus of a public broadcaster. Their biggest problem is what they want to become.”

Private competitors in the DTH space say that DD Direct — its DTH service — makes hardly any money for Doordarshan and, therefore, is completely mismanaged. “They get no subscription revenue from DTH, everyone watches it for free, its boxes are not supplied by them and that is the only investment a subscriber has to make. He gets all the free channels without paying,” says the head of a leading DTH player in the country. He adds that unlike their strategy which is to offer more pay channel options to customers so that it can increase subscription revenues — DD Direct has completely ignored this revenue generating area.

Sircar, however, is aware of the problems. He is making an effort to improve the DTH services by planning to increase the number of channels on it from 59 to 97 channels in the next six months and then look at the business afresh.

He is also hoping that digitisation (from November 1, it will be mandatory in the four metros) will be beneficial to Doordarshan, as many cable operators remove the mandatory Doordarshan channels from the prime band. Says Sircar: “It is difficult to chase more than 60,000 local cable operators and track what each is up to. Thus, Doordarshan would stand to gain in terms of a clear and visible display after digitisation.”

However, the real test of whether Sircar can revive Prasar Bharati or not would solely depend on how he transforms its positioning against private broadcasters, which would remain a monumental challenge.




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