MUMBAI: Price controls are limiting the revenue growth for broadcasters in India as they earn net income of $700 million from subscription after paying out carriage fees of $400 million. Investments in programming are muted and, as a result, India is not able to export television formats and finished content while software, music and animation is travelling overseas.
"If the industry is to see strong ROI which would encourage greater investments in programming, then price controls must go," said Fox International channels president, CEO Hernan Lopex at Ficci Frames 2012.
Advertising revenue stands at $2.6 billion and, thus, broadcasters are heavily dependent on advertisers. An ideal revenue mix should be 50:50.
“No other democracy puts controls on television. Price controls equals creative shackles; they trickle down the creative process. At Fox we buy formats and content from different markets but India is not there. This is not due to lack of talent, ambition and vision,” said Lopex.
Lopex gave the positive example of Colombia where a TV episode costs $150,000 compared to India where an episode costs around $20,000. The turnaround there was the emphasis on creating a dual revenue stream. New channels were launched for underserved audiences. Consumers also wanted content in Spanish and Portugese.
"That is because Colombia has a strong system of TV production, has great writers, animators, actors and the country also fights strongly against piracy. In India under declaration, along with controls, means that the broadcasters are getting squeezed," Lopex averred.
India must let go price controls and allow consumers tell how valuable content is. "When consumers see that spending more money results in better content, then they will be happy to pay more. In some markets, initially consumers thought that cable and satellite services were not worth paying for. But as more options were added, they realised that they were getting value. I am looking forward to a time when my children, when searching for content, find choices that come out of India. I am keen on buying Indian formats that can be shown elsewhere,” Lopex added.
FIC has now nine channels in India, including National Geographic. "We have seen double-digit growth year-on-year. But things have to be approached differently here compared to other global markets," he said.
