Such a situation has emerged because TAM Media Research, the only company that offers television ratings at the moment, has no option but to stop operations by February 15, thanks to a new set of guidelines released by the Union information & broadcasting ministry earlier this month. (More of it later.) WPP-owned Kantar Group, one of the two promoters of TAM, has gone to court against the ministry's directive. Till the court gives its judgement, everybody will be on tenterhooks. Meanwhile, the Broadcast Audience Research Council, or BARC, an industry body in charge of providing the new TV ratings, is still in the process of putting its infrastructure in place.
If the court verdict goes against TAM, the Indian television industry could soon enter a ratings blackout that will last for at least nine months. This could stretch further if BARC is unable to meet its deadlines. Ratings are critical because they are used to buy and sell advertising time on television. Advertisers, who spent Rs 17,000 crore on television in 2013, are a worried lot. Says CVL Srinivas, CEO, South Asia for WPP-owned GroupM, India's largest media buying agency, "The guidelines have come into force without the new ratings taking full effect; therefore, they throw the existing system out of gear. How do we conduct our day-to-day business?"
BARC should meet its October deadline, says Punit Goenka, BARC chairman and CEO of Zee Entertainment Enterprises. Just around the time the ministry issued the guidelines, BARC signed an agreement with Mediamedtrie, a French industry body. Mediametrie will share the open-source technology it has been using in its TV metering system for 15 years. BARC will use it to install people meters - gadgets used to measure viewership - that are made in India. Open-source and local manufacturing allow for scalability, which is critical if BARC has to meet its target of getting data from 20,000 homes by October and 50,000 homes over three years.
The numbers are staggering. TAM currently has 9,650 people meters covering over 36,000 people. At 20,000, BARC would be in twice as many homes, covering over 84,000 people, but at roughly the same cost. BARC CEO Partho Dasgupta says the ratings will be priced to recover BARC's costs. BARC ratings also promise the ability to measure time-shifted viewing (on recorders) and viewing across different devices (laptops, mobiles et cetera, apart from television). The industry is nodding in approval.
The issue was always TAM's small sample size: less than 10,000 homes in a country with 153 million TV homes. "A sample size of 20,000 homes is the basic minimum," says Shruti Bajpai, former country manager and executive director, HBO Asia. TV viewing in India is also complex because of diversity, regional spread and urban-rural differences. But the sample size has meant that any close look at niches makes the data statistically unstable. It starts throwing up weird results. For example, "sometimes English general entertainment channels do zero on weekly reach numbers and yet show up on the ratings," says Sunil Punjabi, business head, AXN Networks at Sony Pictures Entertainment.
Till 2005 or so, most advertisers and broadcasters chose to ignore these anomalies. However, as competition increased, cherry picking data became common. This threw up some crazy results in under-sampled categories such as English news. Then the government got into the act with consultation papers and committees. This pushed the industry to kick-start BARC which had been in deep freeze for six years. BARC is a venture between the Indian Broadcasting Foundation, Indian Society of Advertisers and Advertising Agencies Association of India.
Meanwhile, the government's consultations culminated in detailed and restrictive guidelines for operating as a TV rating agency in India. These include a 10 per cent limit on any cross-holding in other advertising/ media/rating agency or in broadcast firms. TAM is owned jointly (it is a 50:50 venture) by the $5.4 billion US-based Nielsen Holdings and the pound-10.3 billion UK-based marketing services group WPP.
It will take more than the stipulated 30 days for TAM to meet this guidelines. In other words, the new norms could put TAM out of action. TAM CEO LV Krishnan declined to comment since the case is sub-judice. BARC, however, is an 'industry body,' so many of the restrictions don't apply to it.
BARC says it is very focussed on reducing costs and improving the credibility of the new system. The research process and the contracts attached have been broken into different parts and given to disparate agencies. This, Goenka thinks, is critical in ensuring transparency, eliminating corruption and reducing costs. For instance, the establishment survey or the universe from which the sample will be chosen has been bought from the Indian Readership Survey, or IRS, at roughly half the cost. The new IRS released this week has a sample of 235,000. BARC has brought pure-play technology companies into the fray instead of the usual agencies. "It blew this absurd notion that the people meter costs a lot," says Paritosh Joshi, a member of the BARC technical committee. The big lesson is: shop for everything, watermark technology, and get meters or software from different vendors. "By taking the pain of co-ordinating among these vendors on ourselves, we have lowered the cost," says Dasgupta. For example, using open-source technology and manufacturing in India together has brought the cost of the people meters to one-fifth the current costs.
The catch is that a larger sample will invariably throw up several unpleasant truths that broadcasters may not like. Remember how upset several were when TAM increased its sample last year to include towns with a population of less than 100,000? Many large channels got pushed down the charts. Also, "the October timeline does seem ambitious," says Bajpai. Most industry insiders reckon that BARC's ratings will be out only next year. At any other time, a delay would have been fine. But with a rating blackout in the offing, the pressure, not just on BARC but also on the industry, has increased.
Srinivas who was there when the shift from INTAM to TAM happened in the late '90s explains: "Even if we had gone from TAM's system to BARC's, the transition would have taken 6-12 months. People need to get used to a new methodology. Now if we go from TAM to data dark and then to BARC data, there will be too much instability." For an industry that is already going through massive digitisation, it is going to be a tough year, or two.
|What happens when ratings are blacked out?|
| Not having ratings will be a blessing for broadcasters in the commodity space - news and music. For news channels, no ratings in an election year will be great news. The broadcasters with big new shows or marquee properties such as cricket rights or a blockbuster film will suffer. |
These need ratings to justify higher ad rates.
Niche and specialised broadcasters are sanguine. "English entertainment channels (movies and others) don't change numbers overnight. The needle moves slowly over six months to a year," says Sunil Punjabi, business head, AXN Networks at Sony Pictures Entertainment.
Then there are the new entrants such as Kerala-based Mathrubhumi. The young network with two channels doesn't look forward to selling any airtime without ratings. "Agencies and clients are keen on having an interim system. But if BARC can deliver the ratings by the third quarter of this year, it is good," says Mohan Nair, CEO, Mathrubhumi Television.
That is a big if.