Deconstructing the quest for TRPs

In the last few years, TV news coverage in India has hit its lowest ebb. Night after night, anchors perform their best sensationalist acts and turn news into noise. They recreate conflict zones in studios, dramatise even the most nondescript stories and invite guests who spew venom at their co-panellists. All of this is done with a singular objective: maximise television rating points (TRPs), a tool that judges programme viewership.

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The sillier the news, the higher the channel’s TRPs. Higher TRPs help garner more advertising revenue — the main source of income for most TV channels. Data shows that in 2019, close to 70% of broadcaster revenues came from ads, and the rest from pay TV subscribers. In countries where TV markets are as mature as India’s, the inverse is true. So why is it that India cannot generate enough money from subscribers to offset advertising revenues?

It’s because the Telecom Regulatory Authority of India (TRAI) controls TV subscription prices, in the name of consumer interest. The rationale behind this fossilised socialist thinking is that since broadcasters earn money off consumers, their profits must be capped. As a result, TRAI’s regulations have forced broadcasters to depend on advertising revenues which, in turn, makes them dependent on the tyranny of TRPs. The result is content that caters to the lowest common denominator.

Regulators in most countries don’t treat content production like a mechanical activity. They understand that good content costs money. Take CNN, for instance — a global news network that runs over 36 editorial operations around the world. These are costly brick and mortar investments underwritten by a dedicated subscription audience, and not a high-risk ad model. TRAI’s fears about cartelisation and price fixing are misplaced because no broadcaster will voluntarily exclude itself from a hypercompetitive market by pricing themselves far above demand. That too in a market in which 700 out of 900 TV channels are free.

It isn’t as if India’s broadcasting industry hasn’t raised concerns about this systemic flaw. On the contrary, it is one of the most litigious sectors in the country, despite the presence of a regulator to solve its problems. A recent report authored by my colleagues, called “Indian TV Broadcasting at a Crossroads”, highlights that between 2004 and 2020, the regulator issued 77 regulations and amendments. These include 36 Tariff Orders, 21 Interconnection Regulations, 7 Register of Interconnect Agreements Regulations and 13 QoS Regulation. Some regulations were notified but subsequently withdrawn. Of the 70 Regulations (excluding 7 Reference Interconnect Offer Regulations), more than 70% of Tariff Orders and 13 out of 21 Interconnection Regulations were challenged in tribunals and courts.

Three key lessons emerge out of the current morass in which broadcasting is stuck. One, consumers must speak up and demand that fetters to better quality programming be removed. Two, it doesn’t augur well for the sector if stakeholders are constantly running to courts, challenging policies and decisions. Any foreign investor, willing to pump money into broadcasting, will think twice because the last thing they want is to be saddled with litigation. Finally, what all of this demonstrates is that TRAI’s regulatory mechanism to govern the sector has failed. What TV broadcasting needs now is freedom from economic control to survive and to compete. Till that happens, TV news will remain its sensationalist self and will continue to coarsen public discourse.

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