Pankaj Krishna shares 3 takeaways 6 weeks into the NTO rollout

Pankaj Krishna, Founder of CHROME DATA ANALYTICS & MEDIA, shares three takeaways on what exactly is happening on the ground six weeks after the rollout of the New Tariff Order

Six weeks into the tariff order and the television landscape is changing. Here are three takeaways on what exactly is happening on the ground.

Takeaway 1: Are consumers aware of the NTO?

96.5% of India is aware of the new tariff order in some form or the other. Where did they come to know of it from? 83.6% came to know of it from television itself, thereby reinforcing the fact that television remains the highest penetrated medium in India.

What are the packages that they’ve chosen? Almost 50% have gone with the DPO-defined packages, packages defined by operators, leaving the balance 50 percent’s split into two components – 25% with packages from broadcasters, a la carte package. 26% have exercised both, which is a combination of a DPO package along with some kinds of a la carte, 2% don’t remember what they exercised.

So one thing that’s very interesting that’s come out is consumers felt that they were earlier paying for content that they were not willingly subscribing to.

So that leaves the tariff order in the right spirit of transparency, where consumers are getting an idea of what each channel and each bouquet costs, and they feel empowered to pick what they want.

Takeaway 2: How has the penetration fared over the last six weeks?

How has the penetration, or the reach, or Chrome connectivity — what we call OTS – fared over the last six weeks? Broadly dissected into Pay and Free To Air,  Pay has gone down, FTA has gained.

Here are the numbers:

  • Pay, an average national connectivity of 75%, goes down to an average of 51%. So you’ve seen the numbers oscillating from a 75 to a 52 to 54 to 57, now at 51,  which is a drop of 32%.
  • FTA on the other hand, gains from 21% to 26 which is a 23% gain. A word of caution here, many agencies today are buying media on the back of Chrome data. These are national averages for urban and rural India.

If you were to buy English news, you’ll be looking at English-relevant market, which would be 1 million-plus market, primarily skewed toward urban, so take those calls. But don’t go with these numbers at the national level; you’ll have to dissect them for the relevant TG.

Takeaway 3: What’s working with the Indian consumers?

It’s what  we discovered last time, price and quantity… that’s exactly what is working with the Indian consumers,  and the DPOs have figured that out.

Long term, I think the maximum off-take that you would see as things stabilise would be DPO-defined packages clubbed with a la carte off-take.

And we’re seeing maximum impact on broadcasting where companies are graduating from pure distribution, lobbying-driven business to consumer marketing organizations

Now let’s look at the numbers. As per TRAI, the mandate is to carry at least a hundred channels for Rs. 130. The distribution platform owners have taken it to a new level altogether.

So I’ve got some random three numbers:

  1. Vijay Digital in Orissa, in 1 lakh+ is carrying 277 free channels in the network capacity fee, followed by
  2. Gajanan cable in AP & Telengana in less-than-1-lakh carrying 274 channels, and
  3. We’ve got NXT Digital in Udaipur, Rajasthan, carrying 264 channels.

So operators right now are competing for consumers by providing the maximum number of channels within the fixed 130 rupees. DTH – Tata Sky, Dish, Airtel – Average of 250 channels in the network capacity fee.

So, I think long term, what we predicted is exactly coming out true – there is a price-quantity relationship which is already happening with operators putting in maximum number of channels to get maximum subscribers.

Long term — I was chatting to a friend of mine as well — I think the maximum off-take that you would see as things stabilise would be DPO-defined packages clubbed with a la carte off-take.

And we’re seeing maximum impact on broadcasting where companies are graduating from pure distribution, lobbying-driven business to consumer marketing organizations.

Your thoughts, please