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Tuesday, August 26, 2014

So where should the money come from?

 TRAI’s Recommendations on Issues Relating to Media Ownership, its second on the subject, is in the familiar TRAI mould: well presented, articulate, easy-to-read, and theoretically sound, but often opinionated, self-righteous and of questionable practicality.

That there are serious issues relating to ownership is without doubt, and the de facto acquisition of Network 18 by Reliance has thrown many of them up in stark relief. Even if there is no end in sight, they are important enough to discuss periodically, in the expectation that some resolution will evolve over time.

While some have questioned the parameters set by the regulator, it seems sensible to limit the subject for the present as proposed, to where it is most relevant: news and current affairs; on print and TV only; and with markets defined by language-state combination.

That said, it is in the main a one-sided view, lacking the very internal plurality it champions. A comprehensive review of it could be longer than the document itself, so I will confine myself to a few salient aspects.

Whose money is it, anyway?
At a seminar some months ago a senior journalist, who had recently had a public falling-out with his corporate employers, was critical of non-media corporates owning media companies. He was also not in favour of media conglomerates; owner-editors; journalist-owners; and of government or political parties owning media. I asked who then, in his opinion, should own the media. No answer.

The point is not to find fault with that journalist. It is, rather, that this is a fraught issue, in which every answer raises fresh questions. What is necessary is not to limit who may and who may not own, but transparency about who does. It calls, as with most things in India, not necessarily for new regulations but first for implementing existing ones.

No doubt “the mission of the news media is not to promote the advertiser’s interest by facilitating ‘consumption’ but to promote the citizens’ interest by facilitating unbiased dissemination of information”. Nice rhetoric, but where does the money come from? Surely the regulator is aware of the economics of the media business, especially of broadcasting, which is its remit. Surely, too, the regulator is aware that broadcasters still don’t get the benefits of digitization because the intractable last mile does not implement the mandated subscriber management systems, and no one – not TRAI, not the I&B Ministry – has been able to make LCOs comply. (That is exactly why now, on 23rd August, the government has pushed the digitization deadline by a year.)

As long as people don’t pay for content, advertising will remain the lifeblood of the media business. And as long as all their revenue comes from advertisers, that is who they will cater to. Do they have an option?

A news channel selling advertisements, and ensuring its ability to do so, is like a man who works long hours and has little time for his family. His mission is to provide for the well being of his family, but its the job which gives him the resources to do that. Stop whipping him for spending all his time at work: instead, ensure he is paid well enough; control inflation; and make quality education and healthcare affordable. Trust me, he would rather be free.

Sound and fury about private treaties
The near obsession with Private Treaties is out of proportion with the significance of the phenomenon and, if it is significant, with the possibility of doing anything meaningful about it.

This is a line of business in which a media owner has small stakes in multiple companies. Is that a bigger problem than corporate ownership? And what about the influence of big advertisers?  Does anyone know what proportion of revenue comes from so-called private treaties deals? And if indeed it is big issue, has anyone got the media owners’ perspective on it?

Private treaties “could be in various forms,” the document irresponsibly speculates, “such as advertising in exchange for equity of the advertising company or in exchange for favourable coverage. They could also take the form of giving favourable coverage to companies in exchange for exclusive advertising rights. Other innovative forms of private treaties could also exist.” Such speculation is out of place in a document of this nature. Surely it is the duty of an authority recommending a policy to do its homework; and surely TRAI has the wherewithal to get the necessary information.

And here is clinching proof offered, of skullduggery: “During the 2008 recession, these media entities refused to admit that the recession had indeed hit the country and instead called it a ‘temporary slowdown’ in order to prevent the stock prices of the companies they owned and companies that owned them from falling; else they were likely to lose big money.”  

That is perhaps the single most ridiculous statement in the entire 111-page document. Did the Government of India or the Reserve Bank say it was a recession? Didn’t they, on the contrary, actually insist it was only a slowdown? So did the Finance Minister, too, refuse to admit it was a recession because he risked losing big money? Would it have been better if the media had cried itself hoarse and caused panic, and the markets had crashed?

The simplistic, one-word recommendation to “proscribe” private treaties seems to give little thought to the practicality of such a measure. Does it mean media houses cannot invest in companies, or that their owners cannot? Does it mean they cannot carry perfectly legitimate advertisements of companies they have perfectly legitimate investments in? Does it mean their rate negotiations will be subject to approval by some authority?

Regulation, Self-regulation, Co-regulation
NBSA is dismissed lightly because its standards apply only to the 57 channels of 28 NBA members.  

Sadly, there is no informed assessment of it, or a word of appreciation for the fact that these broadcasters have taken the initiative. Instead, the Authority dismisses it as an “ineffective regulatory framework” and only quotes an unnamed organisation that has moved the Supreme Court against it, describing it as “a self-serving farce”.  

The Authority further betrays its bias when, in answering the question, “Has self-regulation worked?” it begins disdainfully with, “The cosy club mentality of this mechanism….” That is hardly calculated to give the confidence of the objective assessment that is the bounden duty of a regulator.

In fact, the entire concept of self-regulation has been dismissed, simply because it is a voluntary act. There is not a single reference to, not a single attempt to give, the perspective of the NBSA, of its Chairman, who is a retired Chief Justice of India, or of editors and broadcast executives – only of their detractors.

It is fair to have expected the Authority to first assess the NBSA mechanism, and then address the question of what next, and weigh options. What it has done, instead, is to point out the issues of statutory regulation and then go on to recommend it anyway, under the aegis of a Media Regulator. It does not make the critical distinction between content and structural regulation: statutory content regulation can easily become censorship; structural regulation is essential for fair competition.

There are two key issues with self-regulation. The first is its limited applicability: in the case of NBSA, only to NBA members.  The answer to that is to mandatorily bring all news channels under the jurisdiction of the NBSA.

The second issue is that penalties imposed by self-regulatory bodies are not enforceable, but giving penal authority to self-regulatory bodies has its own set of issues. The only viable answer is co-regulation, in which a self-regulatory body such as NBSA conveys a verdict and a proposed penalty to a statutorily empowered one, such as perhaps the proposed Media Regulator. The statutory body either accepts and implements the recommendation or reviews and modifies it. How hard is that?

Guilty until proven innocent
What is most galling throughout the document is the disdain towards every link in the media value chain. The best that can be said is that it is equal-opportunity disdain: everyone is tarred with the same brush. The only sources and views cited are those that support the Authority’s agenda. No alternative views are presented.

It is no one’s case that all is well with the news media. Everyone knows about motivated ownership, and indeed the document describes the issues in detail.  But indicting the entire industry and practically all its constituents is unacceptable. The least an industry can expect of its regulator is even-handedness, and that is regrettably lacking.

First published on, an independent media watch website, on 26th Aug 2014 

Tuesday, February 11, 2014

Media regulation: between the devil and the deep sea

Observer Research Foundation, a New Delhi-based think tank, held a seminar last week on Perspectives in Media Regulation: Lessons from the UK, with featured speakers from the Reuters Institute for the Study of Journalism, London. The question, as always, is, can we effectively regulate media in India? Indeed, should the media be regulated? By whom?

The on-going debate on media regulation is in many ways the stuff of the coffee house debates of the sixties, in which jhola-carrying intellectuals diagnosed the ills of the world and prescribed remedies, while the rest carried on running the world in their own ham-handed way.

Perhaps the best indication of this, at last week’s seminar, was in the presence – or otherwise – of a member of the broadcast regulatory body, TRAI. The hosts indicated their seriousness by having Dr Vijaylakshmi Gupta give the keynote address, obviously to set the Indian context before we heard about the UK. Dr Gupta indicated hers by reading out a prepared, platitudinous speech and leaving immediately.

And so the coffee house debate carries on….

In a discussion on regulation on another occasion I wondered why the media have a say in whether they wish to be regulated: were the banking, or insurance, or telecoms or airline companies asked if they do? The Chairman of the News Broadcasting Standards Authority answered that was because the media is special, not like any ordinary business, and has a role of national importance. Unlike banks and insurance and…?

If you break the broad regulation issue into its component parts, it comes down to two distinct aspects: ownership and content. Issues of ownership include both, the who? question- who should own the media; and the what? question – what they should be allowed to own, i.e., cross-media ownership.

The ownership question has no real answers. The discussion at another seminar a few weeks ago was perhaps typical. A senior journalist who had recently had a fairly public falling-out with his corporate employers, was critical of non-media corporates owning media companies. He was also not in favour of media conglomerates; owner-editors; journalist-owners; and of government or political parties owning media. I said I couldn’t disagree with what he had said, and asked who then, in his opinion, should own the media. No answer.

The point is not to find fault with this speaker. It is, rather, that this is an unresolvable issue, in which every answer raises fresh questions.  What is necessary is not to limit who may and who may not own, but transparency about who does. It calls, as with most things in India, not necessarily for new regulations but first for implementing existing regulations.

The other aspect of the ownership question is cross-media holding: born of the concern that media conglomerates, through cross-media domination, can drive public opinion. That’s a theoretically sound concern, but in practice doubtful at two levels. First, it is questionable whether in the pluralistic environment that is India even the largest media conglomerate can actually drive public opinion.

Second, what is the efficacy of such regulation? Even in the highly regulated and media-rich United States the media business is oligopolistic. And yet, going back to the first question, it is doubtful if any of the six dominant houses is in a position to actually drive public opinion.

The real issue in cross-holding is not, to my mind, when a single company owns properties across print, TV, radio and the internet, but when a broadcasting network owns distribution channels. For a content owner to be in a position to control what gets to the viewer, and so be able to choke the pipeline for its competition, is a serious travesty of consumer rights. In India every major broadcasting network owns distribution platforms, the two biggest networks have collaborated in a joint venture to distribute content, and there is no law to protect the consumer. That is a serious issue for the regulatory authorities to address.*

The real, vexed question is of content regulation. Can we? Indeed, should we? Self-regulation or statutory? And, all the while, a government that has been trying for five years to regulate audience measurement wants you to believe that it is committed to self-regulation in content. It is the same government that in its previous term tried to create a broadcast regulator who would be not a constitutional authority but be hired and fired by the government. The proposed structure also required each broadcaster to have on its rolls a Content Auditor who would screen content and tell the Editor what to drop or modify and – incredibly – inform the broadcast regulator if the Editor didn’t comply.

The UK currently has no regulation of print media. The response of the press to the Leveson enquiry and the consequent government proposal is to resist any regulatory mechanism, which is to be expected. But it must be said, in fairness, that the News of the World scandal, though huge, was a ‘rarest of the rare’ case that was effectively exposed and dealt with swiftly, which is a great deal more than we can expect. Whether one NOTW should lead to from no regulation to statutory regulation is debatable.

In the US, too, there is no regulatory mechanism – self- or government. It depends entirely on good practice. The Editor is responsible, and owners typically take a back seat on editorial decisions. Would an editor carry content prejudicial to the owner’s interests? Probably not, but in a robust media environment you can’t stop the rest of the world from seeing you.

In India broadcasters, in particular, have made moves to self-regulation by setting up the News Broadcasting Standards Authority (NBSA) and, for entertainment content, the Broadcast Content Complaints Council, both under the aegis of the broadcast industry bodies. A necessary limitation of such self-regulation is that it is limited to the members of these bodies. In the case of news that means 53 channels of 23 NBA member broadcasters. The other 150 known news broadcasters in the country are beyond the pale.

The effectiveness of self-regulation is often questioned because, even if you don’t doubt their intent, self-regulatory bodies do not have the statutory authority to penalise offenders. Members themselves often don’t accept the rulings of the regulators they have created. Indeed, the first time the NBSA indicted a broadcaster the peeved member quit the NBA in protest.

Dr David Levy of the Reuters Institute had an interesting take on the matter. Effectiveness of self-regulation, he said, is a function first of culture, far more than of legal guarantees. In other words, some of us are made that way, and some just aren’t. The implication that we are incapable of self-regulation may raise some hackles but let’s face it, that’s fundamentally true.

The very idea of statutory regulation, on the other hand, is anathema. Those of us of a certain age have actually lived through it in its extreme form, nearly 40 years ago, and can’t begin to contemplate what it might be like in this multimedia age.

So where does that leave us, between the devil and the deep sea?

Giving statutory penal authority to self-regulatory bodies has its own set of issues.The only viable answer seems to be co-regulation. I see a system in which a self-regulatory body such as the NBSA conveys a verdict and recommends a penalty to a statutorily authorised one, such as perhaps the TRAI. If the statutory body does not agree with the recommendation, it must respond to the recommending body through a laid-down process, and the two come to an agreement.

That media owners protest against any and all forms of regulation is not surprising: who wants to be regulated? Every time content is mentioned in the same breath as regulation, even a limit on advertising time, they get all excited about Article 19, freedom of speech, democracy, et al. While no one doubts the sanctity of our constitutional freedoms, there can be no such thing as unfettered freedom. The trouble is, the press think everyone should be accountable and subject to criticism and control – the legislature, the executive and the judiciary; indeed, both Church and State – except themselves.

There is no perfect solution. The best solution is one that protects consumer interest, and that necessarily means some measure of control while enabling and protecting media freedom.
* This piece was first published in on 10th February 2014., the day TRAI issued regulations for content aggregators. A welcome coincidence.

Sunday, July 14, 2013

Crowdsourcing: no safety in numbers

‘Unilever to boost reliance on crowdsourcing with eYeka’ 
           – News item   

“[Lowe] have created a very strong creative vehicle that’s extremely well defined and portable. But their work has created a problem for them, because it makes Peperami the obvious candidate for crowdsourcing.” That’s how a Unilever London spokesperson explained it when, two years ago, the company fired the advertising agency on Peperami, in favour of crowdsourcing.   

Some compliment! Can you see the agency head calling in the Peperami team? “Folks, I’ve just returned from lunch with John Client. Peperami is tracking superbly on every parameter. You’ve created one of those rare great brand properties that will stay with the brand for many, many years. Unilever have paid you the ultimate compliment: we’re fired. From now the public will make the ads.   

“Jean, pop the bubbly. I’m proud of you guys. You are our A Team, and here’s an A Team challenge for you. I am assigning you to our biggest Unilever brand: get fired on it within the year. A special Christmas bonus if you make it. Cheers, and more power to your elbow.”   

If the idea itself is strange, the outcome was bizarre. Unilever received 1,185 entries and selected not one but two submissions (Both of which came from laid-off advertising professionals: a copywriter from London and a former creative director from Germany. So much for the crowd.), and announced that they would combine the two ideas to make the new campaign. “We’re certain the two ideas will be a successful campaign,” said the Peperami marketing manager. That, from the company which taught us that every advertisement must be based on a “Single Selling Idea” – the first of the ten Unilever Principles of Great Advertising.   Whether Unilever’s winning Advertiser of the Year at Cannes that year was because of Peperami or despite it we don’t know.   

Meanwhile, Kraft Foods in Australia crowdsourced the name for the new cheese variant of its iconic bread spread Vegemite, and chose – hold your breath – iSnack 2.0.   “The name Vegemite iSnack 2.0 was chosen based on its personal call to action, relevance to snacking (I snack, get it?), and clear identification of a new and different Vegemite (2.0, wow!) to the original,” said a Kraft spokesperson. “We believe these three components completely encapsulate the new brand.” Consumers didn’t, apparently. Following a furore, Kraft rather tamely put out a list for people to choose from, and equally tamely changed the name to a blase Vegemite Cheesybite.   

Around the same time Frito-Lay in India sought ideas for new flavours of chips. To the credit of Frito-Lay it must be said that they weren’t chintzy – on the contrary, they generously spent more than they might have had they done conventional market research instead. For four shortlisted flavours they awarded a prize of Rs 5 lakh each – a total of Rs 20 lakh or over US$ 40,000, way more than Unilever London paid to get a new idea for Peperami. The prize for the ultimate winner was Rs 50 lakh (over US$ 100,000) and 1 percent of sales revenue.   

Frito-Lay were truly generous, but in any event, what they did was essentially to solicit consumer opinion on a new product, which might otherwise have been done by conventional market research. But meanwhile other marketers like GE, General Mills, Pepsi, Dell and Starbucks have been seeking everything from product and service ideas to, reportedly, inputs on agency selection and media placement.   Crowdsourcing shops have come up which will brief the crowd and filter the solutions, as Idea Bounty did for Peperami. 

That’s awfully interesting. Suppose one day Lowe had told Unilever London, “You’ll be delighted to know we’ve increased the creative strength on your business. We’ve fired your entire creative team. Now, instead of being limited to a handful of people under our roof, we’ll put our briefs on your brands out on the Internet and get ideas from hundreds, if not thousands.” Might they have saved the Peperami account? I don’t know about you, but I can’t see a delighted client congratulating the agency on its farsighted initiative.   

Now Unilever has taken a big step in the direction of crowdsourcing, saying, “A key role for us as marketers is to create magic and to excite people with innovative ideas.” I always thought a key role for marketers and related professionals was to actually develop the ideas that create the magic, but perhaps I’m wrong.   

Proponents of crowdsourcing cite the ‘wisdom of crowds’, propounded by Surowiecki in his book of the same name. “I don’t think people realize how powerful the crowd can be when engaged on working on a good idea,” says one. Perhaps, but this is not the crowd working on a good idea; it is a multitude of individuals independently developing ideas. They’re not building on each other’s thoughts; there’s no cross-fertilization of thinking.   

Diversity, independence and decentralization are three of the four “elements required to form a wise crowd” that Surowiecki lists: “Diversity and independence are important because the best collective decisions are the product of disagreement and contest, not consensus or compromise.” But 1,185 responses to a brief from perhaps as many people working independently of each other do not constitute collective thinking, and are not the product of disagreement and contest.   

Surowiecki’s fourth element is aggregation: in this context, the marketing management of the company deciding – singly, collectively or sequentially – among the shortlisted submissions. So it is finally down to the quality of decision-making. If you decide on iSnack 2.0, it doesn’t matter whether the submissions come from the crowd through a crowdsourcing agency, or from known people through an advertising agency.   

That the advertising agency has designated, informed people and institutional memory is only one of its advantages over a crowd. The other is that if you make bad decisions you can always blame the agency and fire it. You can’t fire a crowd.   

First published in, 12th June 2013

Wednesday, August 8, 2012

The TAM has come...

If the industry is a victim of the prevailing audience measurement system, it is a complicit victim.

"The time has come," the Walrus said,
"To talk of many things: 
Of shoes - and ships - and sealing-wax -
Of cabbages - and kings -
And why the sea is boiling hot -
And whether pigs have wings."    
      -- Lewis Caroll, Through the Looking-Glass

First, a disclaimer: I hold no brief for TAM, or for any company or industry body. Also, I have no knowledge of the alleged corruption in the TAM system, and neither am competent to comment on it, nor wish to.
In all that is being said about the ills of the audience measurement system, a lot remains unsaid, as broadcasters and other stakeholders look over their shoulders when they speak. Having led broadcast networks as well as media agencies and been in the leadership of industry bodies, I too have debated the issues and heard the arguments. But I have no skin in the game anymore, so I don't need to be circumspect.
The rumblings began, or at least became audible, in 2005, when MRUC called meetings of advertisers, broadcasters and agencies in Mumbai and Delhi, and initiated discussion on the shortcomings of TAM. But these were only crib sessions: they proposed no action plan. Much heat was generated; rhetoric indulged in; tea and samosas consumed; and everyone went back to business as usual, crunching TAM data to do media plans and deals.
I said it then and I say it now: if the industry is a victim, it is a complicit victim.
That TAM is inadequate for the current context and marketplace is perhaps inarguable. But broadcasters and agencies have been using data that they say is inadequate and inaccurate at best, and manipulated at worst, to further their business: to direct the spending of clients' money. That is over Rs 60,000 crore of TV ad expenditure in the seven years since 2005, when MRUC initiated the discussion (basis: PwC estimates). That this is the only data available is no argument: that's like saying, "I know I'm lying: but I don't know the truth, so let's go with the lie." So who is the victim? The advertiser, I should think.
The biggest point of contention has always been the sample size, and everyone has their own prescription. I am no market researcher or statistician, so I cannot comment on what the sample size should be, but it is clear that currently it is inadequate for the large and complex market that India is.
TAM as we know it was the result of the merger of two systems: TAM and INTAM. They were created at a time when the media world was simpler. The big advertisers were FMCG marketers; most brands addressed females in the age group of 15-44 years; and most programming was entertainment. In that simple world, TAM as a broad measure was perhaps adequate. As channels and genres of content proliferated, audiences got fragmented and newer categories began to be advertised, addressed to other, more sharply defined audiences. The need for finer measurement grew but the system remained the same, buffered now and then by some increase in sample.
And what did the users do? Sliced and diced the data at will, ignoring the fact that they were dealing in dangerously small samples.
Broadcasters use TAM data not only to negotiate and sell specific deals to advertisers and agencies, but to advertise themselves, too. Every news channel runs ads claiming to be No.1, on some day and time of its choosing. And they do worse than split hairs. Consider the fact that English news has, on an average, 0.1 per cent share of total TV viewership. If a channel with 23 per cent share claims to be the leader because it has a two percentage point lead over the next one, that's a difference of 2 per cent of 0.1 per cent of TV viewership - based on a notoriously inadequate sample.
Is English news viewership really so tiny? Perhaps it isn't. Perhaps this is a reflection of the inadequacy of TAM. But you can't use the data to show off your prowess, on the one hand, and question its veracity, on the other.
There have often been discussions, formal and informal, with TAM and among user bodies, on the need to increase the sample. The problem is no one wants to pay more than they already are, though they want more than they are getting.
About a year ago, the NBA demanded that TAM release news viewership data monthly instead of weekly. They somehow positioned this as being in the public interest, and mustered government support for it. Thankfully, the idea sank - under the weight of its own sheer ludicrousness, perhaps.
In March 2012 at FICCI Frames was announced, amid much applause, the formation of the Broadcast Audience Research Council (BARC). An industry initiative to develop a robust, user-driven audience measurement system, BARC brings together the industry bodies of the three key stakeholders: broadcasters (IBF), advertisers (ISA) and advertising agencies (AAAI). Part of the announcement at Frames was the much-lauded bringing aboard of the AAAI, by the other two.
At last, a welcome step in the right direction? Yes, except that the three bodies first met about six years ago, and in time formed BARC as an equal three-way partnership. Nothing seems to have happened after that except that two years ago, AAAI was thrown out, for reasons that remain unclear. And nothing seems to have happened since, except the announcement at Frames and subsequently, IBF accusing its 'partners' of delaying the process.
So it appears, sadly, that the industry bodies of the three stakeholders cannot together find a solution to their single biggest collective problem. Finding fault is not enough. Either manage the current system or change it. Now.
First published in

Monday, May 7, 2012

Can't Imagine what they were thinking

The closure of Imagine brought two questions to mind. Why now? And why would they have expected a different outcome?

In the space of about eight months in 2007-08 the Hindi GEC space saw the high-profile launches of four channels. The best thing that can be said about Real is that its owners didn't dawdle in applying the guillotine. 9X had a chequered life, but at least it served the useful purpose of enabling its promoter to keep himself in golf balls and single malt in the English countryside for the rest of his life.

Imagine was launched by NDTV in early 2008, opening with 56 GRPs (CS 4+, HSM), and taken over by Turner at the end of 2009. Twelve weeks into Turner’s tenure (Week 10 of 2010) viewership peaked at 176 GRPs, and then went quite steadily downhill for the next two years, getting back where it started – 54 GRPs – in the week before its closure was announced. 

It was not just Turner, the short history of Real notwithstanding: Imagine never had a chance. It started with the fairly fail-proof offering of Ramayana but ran soaps in weekly episodes, harking back to the old Doordarshan format for an audience that had become used to daily soaps. Why they thought that was a good idea shall remain a mystery, the more so because Sameer Nair, then CEO, was famously the one responsible for moving Star Plus from weekly to daily soaps, with great success. The only apparent reason seems to be economy: making each episode last seven days instead of one.

They did move to daily soaps in 2009 and saw a blip in viewership, but soon went on to reality programming of a type, like Rakhi ka Swayamvar, the Rahul Mahajan show and a couple of other such faintly disreputable shows. Originality is a good thing but not, for a mass market offering, if it doesn't appeal to the core consumer. Imagine did get some traction, but its viewers were not the mainstream audience that makes GEC prime time what it is. It also ran rather quickly out of steam and went into repetitions ad nauseum.

Colors launched in Week 30, opening at the same level as Imagine was in the same week, its twenty-sixth. Then rapidly building and maintaining three to four times the size of viewership, it has stayed consistently among the top four in the genre, alongside the three legacy channels, week after week.

The question, of course, is what has made Colors different from its late, unlamented contemporaries.

What you have to do depends on the scale of your ambition, which in the case of Colors was clearly to be in the big league. In a crowded category with well-entrenched leaders, you don't do that by ingratiating yourself over time; you break down the door and barge in, in one fell swoop. No one is looking for another TV channel. You have to break into their consciousness; intrigue them enough to make them want to check it out; be available right alongside the channels you want to pull them away from, not expect them to search for you; and then, when they do sample your fare, be liked enough for them to want to keep coming back.

Colors pulled out the stops in product, distribution and promotion. It started with big shows, upped the ante on distribution – the broadcasting industry was agog with whispers about how much they spent – and invested heavily in advertising and promotion. It’s not only a matter of having the resources; it is a matter of having the risk appetite to put money, careers and reputations on the line, and then the energy to fight every single day to keep your place at the top table.

It’s true that in marketing nothing succeeds like success, and nothing fails like failure. Success and failure are fluently explained after the event, but the question is, what were you thinking when you launched or acquired the brand? In the cold light of day, what did you think you were doing that would induce consumers to exercise their choices in your favour? That is all marketing is: inducing people to exercise their choices in your favour. And that’s the one question to which top management must have the answer. That’s the difference between success and failure. The rest is detail.

First published in Impact, 6th May 2012

Friday, April 27, 2012

Media ownership: more questions than answers

It used to be spoken of in whispers and written about obliquely; now it is reported openly. But the questions around big business investing in media remain.

About four months ago it was reported that Reliance would, in a typically complex transaction, invest Rs 1,500 crore in the companies that control Network 18 Media and TV18 Broadcast, two listed entities of TV18. To put that sum in perspective, at the time of reporting the two listed companies had a combined market cap of about Rs 1,800 crore. The deal will enable TV 18 to acquire the TV business of Eenadu, and make Reliance effectively the largest shareholder in TV 18.

Now it is reported that at least three big business houses are interested in acquiring 26% of TV Today. The Aditya Birla Group is reportedly the front runner but denies any interest, which is of course standard practice. Market sources say Birla is expected to invest Rs 300-350 crore. Again, to put that in perspective, the market cap of TV Today at the time of writing is Rs 390 crore.

So what is the issue? These are diversified conglomerates, one may say, with interests in everything from shirts to cement and oil exploration to supermarkets, so why not in TV channels?

First of all, because you expect such conglomerates to go where the money is, but there is no money in the media business, and certainly not in broadcasting.

Of the touted Rs 72,800 crore Media & Entertainment sector in 2011 (FICCI-KPMG), Television accounts for Rs 32,900 crore, or 45%. The KPMG report does not give the composition of that, but the PwC report (India Entertainment and Media Outlook) of 2011 estimates the share of distribution to be 63%; of content providers, 4%; and of TV advertising – the sole source of net revenue for broadcasters – at 33%, which makes it just under Rs 11,000 crore in 2011. That’s the entire television business, comprising, at last count, 623 channels: an average of Rs 18 crore per channel per year. That’s less than half the cost of distribution for a medium-sized channel.

With the impending digitisation of cable the equations and the economics of the business are expected to change, in favour of broadcasters. That, perhaps, is the golden future big business is betting on. Well, if FICCI-KPMG estimates are to be believed, after full digitization in 2016 broadcasters will begin to get about a third of what consumers pay, against 10-15% now. Distribution will still get two-thirds.
Small wonder that of the top ten media and entertainment companies by market cap on the BSE only five are in the television space, and three of those are pure play distribution companies – two of which belong to broadcasting networks.

In the present instance Network 18 is bleeding money from every pore while TV Today is barely profitable, with its revenue hovering around the same level for several years. Why would global scale, highly diversified, globally invested conglomerates with wide open opportunities invest in a losing business in a bleeding sector?

If it is simply a desire to be in the media business – a perfectly legitimate desire – it is interesting that they go only into the news space, not into entertainment. A notable exception is Reliance ADAG’s Big TV, which is apparently part of a larger, serious play in the cinema and entertainment space.

The mainstream media have reported these developments, but briefly – and almost entirely without comment. No noisy TV debates, no editorial comment of note. The media don't write or talk about each other, and certainly not critically.

Rajya Sabha TV, lamentably little watched, did have a discussion featuring senior journalists and commentators – and not a good word to say on the matter. Madhu Trehan summed up the picture when she said, “When a politician or a government spokesman speaks, we don't believe them, but when somebody like Rajdeep Sardesai or Sagarika Ghosh speaks, or anyone at IBN7 or TV18 comes on, we presume we should believe them. Now there is a big question mark [when Reliance has indirect control over CNN-IBN].... We are looking at very subtle plants of stories, subtle angles, subtly putting things in a certain way so that people think in a certain way....”

While Trehan cited Reliance and TV 18 in the context, the principle obviously applies to any such situation. If there are some 15 news channels in Telugu, for instance, that cannot be because it is a large and lucrative market. So there is really no difference, in principle, between Reliance buying control of TV 18 and a small businessman or a local politician owning a local news channel in Ranchi or Amritsar or Tiruchi. The difference is of scale and therefore of its potential to influence.

Many countries do regulate cross-holding in media, with a view to preventing media monopolies. For all that, even in a highly regulated, media-rich country like the United States the media business is oligopolistic. In India the government tried about five years ago to bring in cross-holding legislation but had a huge fight on its hands, with both the political establishment and the media establishment waging all-out war against it, and ultimately shelved the draft bill. 

The real issue in cross holding, to my mind, is not when a single company owns properties across print, TV and radio, but when a broadcasting network owns distribution channels. For a content owner to be in a position to control what gets to the viewer, and so be able to choke the pipeline for its competition, is a serious travesty of consumer rights. In India every major broadcasting network owns distribution platforms, and there is no law to protect the consumer.

While there is a modicum of action on other aspects of regulation, even if of questionable effectiveness, when it comes to regulating who may invest in media at all there is little or no legislation in the free world, nor does it appear practical. It does seem, on the face of it, well nigh impossible, in a free-market democracy, to stop anyone from owning anything unless it is established that such ownership distorts the free market.

If you can’t regulate the ownership of media, can you regulate its use, or misuse?

Even regulation of content is a fraught issue. The Press Council of India is famously toothless, made no better by its present Chairman, “who is baiting the media, who doesn't believe in conversing with the media,” as S Nihal Singh says. The News Broadcasters Association took a laudable initiative in self-regulation, but the effectiveness of the mechanism is debatable and indeed frequently debated. The Indian Broadcasting Foundation, after squirming and obfuscating for years, finally set up a mechanism, but it is too early to say how – even if – it works.

Any discussion on regulation – of ownership; of cross holding; or of content – runs into questions of freedom of speech and raises constitutional issues; and the haloed Article 19 is invoked, and with good reason.  Now the Supreme Court has asked what can be done if business entities use the media to harass rivals, what mechanism is available to deal with such a situation. In response counsel for the media said – predictably, but not wrongly – that the court can do whatever is in its power, but not at the cost of the right to free speech.

Dilip Cherian holds out no hope for media legislation in India, citing the nexus between business and politics. “As a country we are not able to legislate for two reasons,” he said on Rajya Sabha TV. “One, because of the influence big business houses have on policy making. And two, when you bring legislation (on regulation) up, the other group that is affected are the politicians who own media houses of their own. You are talking about a new coalition of forces which the public is incapable of handling.”

Where we are today is far from perfect, but every solution raises its own problems. Big business must not be allowed to control the media, but who wants a fragmented, anarchic melee of small, unaccountable media? Media monopolies are unhealthy, but do you trust the government to decide who can own what?  Self-regulation of content is not working; but do you want the government to decide what we should see and read?

It’s a complex web of issues. Where we are today is the outcome of conflicting forces and vested interests playing out over many years. It’s like global warming: it affects my life in fundamental ways; its effect is not dramatic today but its potential to damage is huge; and I don't have a cogent solution, but I know it is something I have to be concerned about.

First published in Impact, 29th April 2012

Friday, November 18, 2011

Wanted: more magic, less logic

The brand manager – frequently a young marketing person on the way up the commercial ladder – sometimes uses temporary occupation of the brand to demonstrate flair and originality at the expense of brand consistency.”

-- Wally Olins, in Corporate Identity

One day last week a small news item in The Economic Times caught my eye. “Dettol vs. Lux?” it asked, and reported that Reckitt Benckiser was extending Dettol into body wash. “After sparring with HUL's Lifebuoy in the anti-germ category for years,” it said, “Reckitt is set to take on HUL's Lux in body washes.” The line extension into body wash seemed natural. The bit about Lux didn’t.

Over 75 years old in India, Dettol is a defining brand. ‘Clean and safe’ has a smell: the smell of Dettol. The smell of a hospital is the smell of Dettol. A bottle sits on many a bathroom shelf, often unused for months or even years but giving the quiet reassurance that it is there and you don't have to worry about nasty germs. “Dettol protects” was its simple, confident tagline for many years.

Of course there is a limit to which domestic use of liquid antiseptic can and will grow. But if you owned a brand as powerful as Dettol you wouldn’t shrug your shoulders and say, “I guess that’s about it”: you would want to leverage its equity to look for new ways of meeting consumer needs – in other words, line extension. So far, so good; but the question is, line extension into what?

It was in the late 1980’s, if I’m not mistaken, that Reckitt first forayed in that direction, with Dettol Soap. The antiseptic property of Dettol was interpreted, with what often passes off for deeply insightful thinking, to lead to a so-called higher-order benefit – antiseptic, therefore protection, therefore care – and the soap was dubbed ‘The Love and Care Soap’.

Of course that didn't work. Neither was Dettol about love and care, nor was the mother so wanting for expressions of love and care that she had to reach out to Dettol for one. Repositioned later to offer a “100% bath” – as a result of its antiseptic property – Dettol soap grew to be a very strong player in premium toilet soaps. The soap became the primary form in which consumers interacted with Dettol, but it was the liquid antiseptic that gave meaning to Dettol soap.

The story is not in itself remarkable. What makes it so is that this was only the beginning of Reckitt’s many failed attempts over the years to make Dettol what it is not. And it would seem from the reported intention to take on Lux that they haven’t done with the idea.

Apart from the perfectly sensible hand-wash liquid Reckitt have, over the years, launched Dettol shaving cream, mouthwash, prickly heat powder, anti-dandruff shampoo and floor cleaner, among other products: most dead, some perhaps on life-support systems. And in toilet soaps, moisturising soap (Dettol Extra) and glycerine soap (Dettol Junior). The argument was that all of these products protect – against dryness, against dandruff, against prickly heat. “Dettol protects”, remember?

The argument for Dettol moisturising soap was that research showed (The graveyard of marketing is full of products whose conception began with someone saying, “Research shows...”) that many people didn't like Dettol soap because it smells of Dettol; and they didn't like the colour; and they didn't particularly feel the need for a germicidal soap. So Dettol moisturising soap was meant to enable you to use Dettol soap that didn't look or smell like Dettol or do what Dettol does. Why would you want to? Now Dettol body wash comes in four variants: Original, Skincare, Cool and Fresh, for possibly the same reason.

That’s all very well, you may say, but what should Reckitt have done? Well, they didn't have far to look. Dettol in the UK has a wide range of product offerings, all of them anti-bacterial, in two broad sub-brands: Healthy Touch and Complete Clean. All have the predominantly green Dettol graphics: not a pink or a blue among them. I have no idea of their history or how much each of them contributes to the Dettol kitty, but as an observer I see an inarguable consistency in the brand proposition as well as the presentation.

Dettol is not alone, though. Consider Dove. Once upon a time I knew what Dove was: one-quarter moisturising cream, so it keeps your skin soft while it cleans. I could understand Dove body wash, and face wash. Now there is a range of Dove shampoos, to keep hair soft by keeping it damage-free; prevent hair fall; and protect your hair and strengthen it, among other wonderful things they do, because (I’m not making this up; you can see the ads) they are one-quarter moisturising milk. As if that was not enough, there is Dove deodorant, which nourishes your underarms and makes them fair in seven days because – you guessed it – it is one-quarter moisturising cream. Is there somewhere a Dove beauty bar or body wash that keeps your skin soft? I forget.

Then there is Garnier. Dove, to be fair, is based on a single product attribute, stretched though it may be, and there is an identifiable Dove look. Garnier has products for practically every part of the body, for both sexes, with little in common in terms of product attribute, tone and style, or brand vocabulary. If you look at a reel of Garnier commercials, it seems anything goes as long as at the end of the ad someone says, “Take care.”

The products are perhaps selling, in larger or smaller quantities. But just as strong brands take long to build, they take long to get damaged. Dettol, despite everything, continues to feature in the top ten in the Brand Equity list of India’s most trusted brands.

It is not that you can’t stretch a brand into seemingly unrelated products: there is perhaps no better example in the world than Apple, going from computers to music players to mobile phones, changing the game in each category and stamping it with the unmistakable Apple brand. To do that you need to have a very strong sense of what the brand is and can be to its consumers, and that is largely a creative leap, not the reasoned, numbers-driven, left-brain argument that Marketing has become.

It is good to see, in this milieu, one global leader declaring that it will bring back the magic, and reward marketers who are prepared to take risks and back creative ideas. Outlining a ten-year marketing perspective to their global brand teams recently, Unilever’s top marketing executives emphasised the need to move away from “unthinking adherence to quantitative market research at the risk of losing some of the creative spark that leads to great creative ideas”. Amen.

First published on