News genre ad rates grossly under-priced despite high reach, correction may happen soon: Avinash Pandey of ABP News Network

Broadcaster ABP News Network, which recently converted all its channels to free-to-air (FTA), expects its shift to boost its total viewership by at least 25%, given that 2019 has high-value events such as general and state elections, IPL and World Cup Cricket.

In an interview to BestMediaInfo.com, Avinash Pandey, CEO of ABP News Network, said going pay did not make any sense for the network as the subscription price was too low and the paperwork and compliances were too tedious. He said ABP’s popularity ensured all its channels are in the list of 100 FTAs offered by distributors.

Pandey says the news genre is too under-priced and once OTT gets more widespread, people would have cable/DTH connections mostly for news and sports. “I think the value the news channels are adding in the industry is unprecedented and advertisers should jump on this opportunity to expand their reach and advertise more on news.”

Talking about the challenges that the news industry faces, other than monetisation, Pandey said fighting fake news is among the top issues. Going ahead in 2019, he said the biggest focus for the news network would be cricket programming and politics.

Excerpts:

ABP had a good reach in the regional markets. Then why did it turn FTA?

The reason we went FTA was because only two of our four channels were pay and the genre pricing was meagre (between 10 paisa to 75 paisa maximum). The new regulation requires channels to measure twice the subscriber base and bill accordingly, plus there is GST. So for a standalone channel, it is a very complicated way of doing business and not worth the money. It is not worth because for each subscriber and MSOs we have to raise the bill, multiply by 25 paisa and then pay taxes. The cost of this particular task was higher than the return and hence we decided there was no merit in it. It may work for other people if they are confident enough to charge Rs 15 or Rs 19 for a channel -- then it makes sense for a standalone channel to go to the market and do well. Or, if you are part of a large network bouquet such as Star and Sony, which we are not. So it didn’t make sense. Our channel is extremely popular and we are in the middle of election. There is lot of activity in India and abroad. After concluding that the earning is not too high in the pay TV market, we decided to go FTA. At, least we can serve our consumer and advertisers.

What advantages do you see in being a FTA channel? Or did you witness an impact on your revenues?

In any case, our subscription revenues were infant and not very high. Now, news itself is a small market and within that our most popular channels are in West Bengal and then in Maharashtra. The share of pay was significantly small in our overall revenue pie and so it didn’t affect us. It is now beneficial for us because we have less paperwork. Anyway, we are paying carriages, so it makes better business sense.

The increase in subscriber base will happen as per TV penetration. In our market, our availability was almost 99% and it remains. Since we are a non-encrypted FTA channel, we are easily available on cable.

Is ABP Network part of TRAI’s 100 base channel package?

The popularity of our channels helped us to automatically get placed in the 100 base channels of TRAI. All our channels are part of the 100 base channel free pack in all markets. In Maharashtra, Hindi and Marathi are available, in Gujarat we have Hindi and Gujarati and in West Bengal, we have Hindi and Bengali.

Currently, the news genre is delivering a higher viewership. In fact, last week, the genre registered more viewership than GECs. Do you see it translating into ad growth?

Yes, with the Abhinandan story and the surgical strike, the news genre registered far higher viewership than what the GECs put together delivered. It has been an unprecedented market share but the advertising rate doesn’t change. So, here the challenge is that while the high-delivery programmes of GECs can manage to extract value from advertising revenue, the news genre is grossly under-priced.

But don’t you think the low pricing of the news genre is because it has more event-led programming unlike GECs, where there is a fixed offering?

Yes, that might be the case but the point is that India is such a vast country; so much happens every day. News channels show these happenings like an event. Millions of people tune in to news channels on a daily basis.

Now, many come with an appointment-viewing mindset when they come to see women-oriented shows or commentaries on daily soaps in the afternoon on different news channels. If we look at these programmes, they have a huge loyal viewership. But do we get advertiser support on these? No. But the same number of audiences can extract better value on advertising through GECs.

Also, the audience is highly engaged over here. Viewers are slowly shifting to watching shows on OTT instead of television. I think eventually only news and sports will be watched live and appreciated on television and people will subscribe to cable and DTH only for these two genres. The value news channels are adding in the industry today is unprecedented and advertisers should jump on this opportunity to expand their reach and advertise more on news.

What other challenges do you face when it comes to news?

The biggest challenge as a news channel is that we are in a situation where we have to fight fake news being spread on social media. The news companies are not just competing with each other but also with social media. News circulated on social media is picked up by smaller channels and aired as breaking. The big channels aren’t any more in a rush to break news unless it is verified.  

Going forward, how do you see the growth of the news genre?

FTA channels will be ad-led without doubt. I think this year would be big because of World Cup and elections – we have the Maharashtra elections followed by Jharkhand and Haryana. So we will see a 20%-25% growth easily in terms of viewership.

How do you plan to strengthen your offering and stay relevant to consumers?

We believe in breaking, live and face news. We are strengthening our line-up for the elections, which will be followed by World Cup programming. We have eight to 10 varieties of programme for the elections. From UK, we will be doing programming on Dhoni’s last World Cup. Our programmes on cricket are quite popular. We will be weaving content around cricket on television and also on our app.

How are you planning to distinguish ABP News Network from other news broadcasters? Do you think it will be difficult to attract viewers in today’s TV eco-system?

We are a premium brand as compared to other FTA channels in news. We have a 100% gap with them in viewership. In today’s TV eco-system, I think it will be a fair play as every channel will have its own business model. Channels will have to produce better content to attract viewers. I think it will be fair play for FTA and pay channels.

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