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Consumer feedback to drive pricing of Zee channels

If Supreme Court upholds TRAI’s proposed 15% discount cap, the pricing will change but right now Zee is looking at it as a behaviour change. The broadcaster will make changes after studying consumers’ feedback

Zee Entertainment Enterprises (Zeel) has proposed its new maximum retail prices (MRP) and bouquet rates following the new tariff regime. But the broadcaster says it may make changes in the pricing after getting feedback from consumers in the next six months.

The Supreme Court’s much-awaited ruling on a 15% cap on discounts in channel bouquets, which was proposed by Telecom Regulatory Authority of India's (TRAI), will affect the pricing. But Prathyusha Agarwal, CMO, Zeel, feels subscription pricing has become an open market variable and broadcasters in TV ecosystem have to think about it consciously variable and not wait for the regulator to intervene.

Prathyusha Agarwal

“If regulator asks us to change, adhering to the 15% discount cap, the pricing will change but right now at Zee we are looking at it as a behaviour change. We will study consumer feedback — what they are willing to pay and what not — and make changes accordingly. Currently, the bouquets are made looking at the staple and the value that one gets on surfing. It will take six months to settle down and we will be doing continuous research to understand. FMCG product pricing differs all the time and depends on the research of the market. With this ruling, our category will reach that stage, which is a very welcome move,” she said.

Zee has launched a base pack of Rs 45, which is on the high end and might discourage consumers from taking more channels. Agarwal says this is the first time that they are dealing with demand pricing. Like any other sector, she believes that now consumers can choose their channels.

“Earlier, according to our study, Zee enjoyed 80% consumption in the quarter. Now, all of them might not opt for pay channels but there will be marginal changes which we will have to see. The consumer is going to relocate their monthly budget on channels they really love and on channels they won’t mind shelving. If we consider consumers who can pay Rs 350 a month then the pricing is in their budget. But for consumers who can pay Rs 250, a bit of reallocation will happen,” she said.

Currently, Zee is concentrating on educating not only the consumer but also the trade ecosystem about the proposed MRP-based tariff policy. There is still ambiguity among consumers and DPOs when it comes to the policy and Zee has launched some initiatives such as WhatsApp outreach, Zee infographic, digital push and posters to inform them.

“We have a monthly action plan wherein we will see what challenges we need to tackle and will act accordingly. We are focusing on three things — overall awareness, where we are saying that consumer needs to be aware of making a choice; second, we are equipping the trade by informing them what the regime is all about; and third, the path to purchase. Till now the biggest thing in the broadcast industry is DDT. Now it won’t be just DDT but it will be DDT plus buy. Buy where and what is going to get included, so we are approaching it in three prompt ways,” Agarwal said.

From December 29, the new tariff will be implemented, after which consumers will have to choose individual channels, which means the bundle packages won’t work and they have to pay for each channel from different broadcasters. Is DPO prepared for this shift, do they have systems in place, are they prepared?

Agarwal said not all DPOs are prepared and it is necessary for them to be attuned to the consumers’ demand to be the first gainers. “DTH has systems in place as they have been doing it for a while and even DTH consumers are aware of it. But LCOs need to be prepared. While some are attuned to the change, others don’t have a clue. The LCOs are gearing up by briefing their salesmen. In India, a lot of communication takes place through salesmen. Though e-commerce is booming, the salesman is still of prime importance at the base level. I think LCOs will understand the system in the time period from December 29 to January 5, 2019, which is when they send their salesmen to collect money. They will have to take a call on what to tell the consumers. Everyone has to take a decision on what narrative they are going to use,” she said.

Speaking about the dropping of channels due to the a la carte option and its impact on advertisers, Agarwal said, “Today, there are 550 channels but only around 65 pay channels are watched. BARC data shows people weren’t watching the entire bouquet of 550 channels. The consumer will remove the channels which anyway they weren’t watching. Similarly, ad revenue of brands that have strength, pull and reach will go up and a product that is not good won’t attract revenue. The channel will either be in a virtual cycle or vicious cycle if you don’t correct the product. If it is open market, then if your offering is good, it will stand you in good place. Now there will be transparency and better understanding.”

In terms of renewable purchase obligation, Agarwal stated that it was too early to comment as the industry will take at least six months to settle. “This is the first time the industry is offering demand-led pricing. Only after consumers shell out, we will know how it works. Six months down the line, one will have a realistic outlook,” she said.

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