‘Stronger channel brands will gain strength with digitisation’

Q&A with Ashok Venkatramani, CEO, MCCS, on the channels’ performance post rebranding, impact of digitisation on news channels, TAM ratings and more. Edited Excerpts:

Dec 28, 2012 02:34:00 PM | Article | Campaign India Team

It’s been about six months since the name change happened. How has it impacted business? 

The name change from Star to ABP has been the most significant development for us in 2012. The positive impact of which is visible on viewers, advertisers, newsmakers that we interact with as a channel and our employees.  On the viewership front, average rating for all three channels (ABP News, ABP Ananda and ABP Majha) four months post the name change has gone up by two to three points, which is a sign that viewers have accepted us as ABP. We’ve seen an increase in the revenue from advertising in the past few months, which means our key clients have continued to show faith in us, like they did even prior to the name change. There has been complete acceptance from newsmakers such as politicians and celebrities. And as for our employees, I’m glad to mention that the company’s attrition rate post the name change has gone down drastically. So it’s very satisfying to see the transition happening very smoothly.  

But wouldn’t you agree that typically consumers take some time to relate to a new brand name?

It depends on the way the way the message (of name change) is communicated.  In our case, we actually started the advertising campaign three weeks before the date on which the name change happened. And within the three weeks of the campaign, we effectively communicated the message to our viewers. And the message was very simple and straightforward.

Also, it’s quite different for a news channel. Unlike a consumer product, where the brand does not necessarily speak to the end user on a daily basis, news channels have the advantage of reaching out to its audiences daily. So to answer your question, the name change is not a factor of time, but it is a factor of ensuring that the communication reaches to the consumer on time and more importantly, whether as a brand, you are able to live up to the promise.

Do you agree with the industry’s decision to delay the release of TAM ratings for news channels?

Absolutely! The industry decided to suspend TAM ratings in order to address issues arising from this whole process of moving from analog to digital. Firstly, the digitisation, as per the set deadlines, needs to happen. Set-top-boxes need to be in place in all markets. If that’s done, you expect things to settle down and then you can release the data. Currently, the story is quite different. The digitisation isn’t happening as quickly as the industry thought it would. Mumbai has done well, Kolkata is still not fully digitised, and Chennai has hardly shown any progress. Carriage fee agreements for niche channels are not finalised, discussions are still on. So there are quite a few things we need to look at. Let’s take the example of niche channels. A lot of niche channels are not in the best of positions because their weightage in overall viewership is low, their pickups will be low and hence the margin of errors TAM will be showing will be that much higher. This is a big disadvantage to small channels and is precisely the reason why TAM data for news channels have been deferred.

Does lack of ratings make any difference to the operations of a news channel?

No, it doesn’t make any difference. For example, if you want to watch India versus Pakistan, you will watch that on any sports channel it is showcased on; doesn’t matter if that is ESPN Star or any other channel. But, if you’re on a look out of news in London, you know which channel you want to view it on. It’s going to be BBC because that’s a local channel you trust the most. So news is always consumed by brand name. You know a certain channel delivers most authentic news, and so you tend to stick to that channel. We’re an established brand in India, so we’re not worried. There is no reason why the industry should be worried about absence of ratings.

Also, a media buyer does not buy news channels on the basis of weekly ratings like they do in the case of entertainment channels. News channels are bought on the average rating of eight to 13 weeks.

What are the highpoints for the three channels in the year 2012?

The highpoints for all the three channels are the same. They have successfully transitioned from their earlier avatar to the new avatar seamlessly without losing any viewers. They have actually added viewers during the transition, they’ve continued their performance in terms of revenue growth, and though it is little too premature to say, hopefully we will also see smooth transitions for all our channels from analog to digital.

How do you see the news genre emerge in a digitised world?

In a digitised environment, news channels will have to pay lesser carriage fees and that’ll have a positive impact on the revenues. Stronger brands within the news genre will gain more strength and the ones not doing well could fade out eventually. I’m saying this because the consumer will make the choice on channels he wants to view, which means channel brands will have to market themselves better and look at increasing their ad spends. With increase in subscription revenues, dependence on advertising revenues will be that much lesser. A trend which we've seen internationally, will now start to happen in India.

What is your view on the government slamming news channels on the coverage of Delhi protests?

I would like to make a generic comment without talking about any specific channel. Overall news channels have done an excellent job in terms of maintaining balance. I don’t think any channel has gone overboard.  It is quite unfortunate that quite a few news channels have been targeted by the police; a lot of us have actually lost equipments, people have been injured etc. which is very unfortunate. But channels, I think, have done a good job of covering the protests.

Across three channels (ABP News, ABP Ananda and ABP Majha), what are your expectations post release of TAM data?

I don’t think there will be much impact. And the reason I say this is that in the last intervening period, in many markets, there have been analog signals running in a pirated manner and the transition is still not made. It’s not as if any major channel has been shut off, and I don’t think we will shut off either in any of the markets. We’re number one number and number two in most markets, so we will be in a respectable position when the TAM data is released.