Priorities for Mr Jaitley

BY sevanti ninan| IN Opinion | 13/11/2014
Digitisation is a job half done which has so far benefitted the government the most, by way of taxes, and the consumer the least.
SEVANTI NINAN on crucial issues the new ministers need to consider. (Pix: PIB: Arun Jaitley taking charge as the I&B minister on November 10.)
Sevanti Ninan
We suddenly have a new part-time information and broadcasting (I&B) minister, a new minister of state, a new chairperson for Prasar Bharati, and a new joint secretary for broadcasting at the ministry as well. But new beginnings are helpful only if the right issues are on the table. 

Mr Arun Jaitley kicked off his re-entry into I&B by chairing a meeting with members of the parliamentary consultative committee attached to the ministry. It was meant to review cable digitisation. The terrestrial digitisation of Doordarshan was apparently also discussed. But the reporting does not suggest that certain crucial aspects of both issues came up.

The general impression created by the media is that the ministry in the last few years has tirelessly pushed digitisation. Tirelessly maybe, but not selflessly. It is a job half done which has so far benefitted the government the most, by way of taxes, and the consumer the least. The broadcasters, multi-system operators (MSOs) and the local cable operators (LCOs) come somewhere in between. 

Deadlines have been pushed back for Phase III digitization covering all urban areas by more than year partly because TDSAT (Telecom Disputes Settlement & Appellate Tribunal) has been flooded with litigation involving broadcasters, MSOs, LCOs and DTH (direct to home) operators. Lots of messes to be sorted out, but the voices least heard are of those of subscribers. The poorer they are, the greater proportion of their household income they have to shell out now. 

An analysis done by Kotak Institutional Equities in January this year looked at the impact of taxation on consumer pricing of cable and documented that the combined impact of entertainment tax and service tax in three cities—Delhi, Mumbai and Kolkata—is the highest on the starter pack which is the cheapest pack on offer, for the lowest socio-economic segments (D and E) of the audience. (Tax as a percentage of consumer pricing  is 32 per cent on the starter pack in Mumbai as compared to 25 per cent on the premium pack!) Yet the price of the starter packs  before tax are the lowest in  Mumbai, at Rs 160. So the government does need to look at this issue.

Has anyone in government or Trai (Telecom Regulatory Authority of India)  worked with broadcasters on the possibility of offering the consumer at the bottom of the ladder a basic package of 12-15 channels which they really want and pricing it accordingly? Cable starter packs today are priced well over Rs 200 a month, per TV set, in addition to the cost of the set-top box. People are clear they don’t need a 100-plus channels to choose from when it hurts their budgets, but they are equally clear about which ten or fifteen they really want.  

Media reports say of yesterday’s meeting, that in  the ministry’s presentation, specific reference was made to the initiatives undertaken by the ministry including discussions with stakeholders and the campaign to “sensitise the masses”. I love that term. How about sensitisation of those implementing digitisation on the financial impact it is having on the ‘masses’? 

Then there is the issue of terrestrial digitisation for Doordarshan. The ministry and Prasar Bharati have to stop kidding themselves that rural viewers are still accessing TV largely through its terrestrial network and that Doordarshan is therefore the most watched broadcaster in rural India. It is not. Between 2006 and 2013  the percentages for rural TV access got reversed. Cable’s share of access went from 30 per cent to 43 per cent. DTH went from 6 per cent to 29 per cent of the rural market, and terrestrial TV, a government monopoly, went down from 64 per cent market share to 27 per cent (Urban-rural trends, Francis Kanoi Marketing Research).  Rest assured that it has declined further. A television household opting for its first TV set in rural India today goes straight to DTH. 
So the short point is that DD’s terrestrial network is a needless drain on the exchequer, a source of misplaced financial use. The Pitroda committee report estimated that terrestrial distribution of Doordarshan channels eats up 88 per cent of the broadcaster’s operation expenses and reaches 8 per cent of its households! The terrestrial digitisation of Doordarshan meanwhile is proceeding apace and the assumption is that whenever DD is digitised all over the country the audiences will buy another set-top box to access just DD. That is high optimism. 

Prasar Bharati today spends the bulk of its Rs 4,000 crore annual expenditure on salaries and infrastructure, not on  programming. The budgets for the latter are abysmal. Here is a sampling: the Delhi production centres put together have an annual allocation of Rs 150 crore  for software production expenses for 2014-15, Andhra Pradesh of Rs 9 crore and Odisha of Rs 2.5 crore. (DD figures). A private channel spends up to Rs 1 crore an episode these days on programming. Some programmes cost more. Viewers, including the poorest in the most backward districts of the country, can tell the difference, which is why they opt for DTH bouquets other than DD’s free dish which gives them 25-plus DD channels. 

Finally, there is the issue of allowing news on radio. Arun Jaitley opened up FM broadcasting in 2000, now it is time for him to open up radio to news. A continuing ban only serves to speed up the decline of radio in a country where it should have been the most powerful form of communication. Even with the growth of FM the number of radio sets in India has come down by 18 million from the 2001 census to the 2011 one. Will reliance on just a monthly prime ministerial radio chat reverse that decline?

(This is an expanded version of a column which appeared in Mint on November 13, 2014.)
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