Prasar Bharati looks at a turnaround

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Prasar Bharati operates as the public service broadcaster and is largely dependent on government funding. It has two arms: the television arm Doordarshan and the radio arm All India Radio (AIR), with a collective workforce of around 36,000 employees drawing salaries from government funding. Over the past several years, its expenditure has outgrown its revenue earning capacity, which is solely dependent on ad revenue. In order to achieve its objective of public service broadcasting without compromising on opportunities to earn revenue, Prasar Bharati has turned to a transparent system of conducting e-auctions of slots and airtime to accommodate private channels and content creators. The objective is to improve the quality of programming while maximising revenue in a transparent manner.

On its free-to-air DTH platform called DD Direct Plus, Prasar Bharati will kickstart the e-auctioning of television channel slots to the highest bidders who wish to enjoy the vast reach of DD Direct Plus.

What has Prasar Bharati’s financial performance been over the last few years?

In the last four years, the expenditure incurred in operating Doordarshan and AIR has witnessed a 47% jump, according to Prasar Bharati’s own estimates. In contrast to an expenditure of R2,030 crore in 2007-08, Prasar Bharati is estimated to have incurred an expenditure of over R3,000 crore in 2010-11 (these numbers are still being finalised).

However, there has been growth on the revenue side too. From generating revenues of R987 crore in 2007-08, Prasar Bharati has witnessed a 41% jump in 2010-11, generating R1,400 crore. But the deficit between expenditure and revenue has to be filled in by loans and grants provided by the I&B ministry from its own budgetary allocations. And this is the gap Prasar Bharati is looking to fill from its own pockets by generating its own revenues from its commercial activities. According to the I&B ministry, the operational cost of Prasar Bharati has been on the increase in the wake of implementation of the recommendations of the 6th Central Pay Commission (CPC). However, the government has advised Prasar Bharati to contain expenditure by strictly adhering to financial prudence.

How is the government helping Prasar Bharati?

The Group of Ministers (GoM) on Prasar Bharati has considered various issues relating to the capital and financial restructuring and funding pattern of Prasar Bharati. The GoM has, inter alia, recommended restoration of section 22 of Prasar Bharati (Broadcasting Corporation of India) Act, 1990, conversion of all outstanding government loans to grants and waiver of interest and penal interest thereon, all Plan funding to be given only in the form of grants, government to support the operating expenses to the extent of 50%, and waiver of accumulated arrears of space and segment charges up to March 31, 2010. The projected requirement of Prasar Bharati during the year 2010-11 was to the order of R3,000 crore. After extensive pruning, a budget of R2,946 crore was allocated to both the directorates (Doordarshan and AIR). Follow-up action is being taken by the government on the recommendations of the GoM. However, after reservations were expressed with regard to Prasar Bharati not being able to meet its 50% share, a revised funding pattern is being worked out by Prasar Bharati that will be placed before the GoM for consideration. Secondly, DD and AIR have been adopting an aggressive marketing strategy that will help generate revenues and cut costs wherever required. These steps would ensure improvement in the financial status of Doordarshan and AIR.

What is the network and reach of Doordarshan and AIR?

Doordarshan is one of the largest broadcasting organisations in the world in terms of the infrastructure of 66 studios and 1,415 transmitters. The Doordarshan network provides coverage to about 92% population of the country, spread over about 81% area. All the areas covered by the terrestrial transmitters along with rest of the country have been provided with multi-channel television coverage through Doordarshan’s free-to-air DTH service, signals of which can be received anywhere in the country with the help of small-sized dish receiving units.

Doordarshan started with an experimental telecast in Delhi on September 15, 1959, with a small transmitter and a makeshift studio. The regular daily transmission started in 1965 as a part of AIR. The television service was extended to Mumbai and Amritsar in 1972. Until 1975, only seven Indian cities had a television service and Doordarshan remained the sole provider of television in India. Television services were separated from radio in 1976. In 1982, Doordarshan as a national broadcaster came into existence. The same year, colour TV was introduced in the Indian market with the live telecast of the Independence Day speech by then-PM Indira Gandhi on August 15, 1982, followed by the 1982 Asian Games that were held in Delhi.

At present, Doordarshan operates 21 channels including the two pan-India channels (DD National and DD News), 11 regional languages satellite channels, four state networks, an international channel, a sports channel and two channels for covering the proceedings of the Parliament (Rajya Sabha TV and Lok Sabha TV). It also operates the DTH service called DD Direct Plus.

AIR was established in 1936 and is one of the largest radio networks in the world. AIR offers different services, each catering to different regions/languages across India. Vividh Bharati is one of its most famous services, which is also known as the commercial broadcasting service. The external services division of AIR broadcasts in 27 languages to countries outside India, primarily by high-powered short wave broadcasts although medium wave is also used to reach neighbouring countries.

Why is Doordarshan adopting e-auctions and for what?

With the growing popularity of DTH services in the country (which has crossed the 40-million subscriber mark for the six private DTH operators and around nine million for Doordarshan’s DTH service), several small and free-to-air broadcasters prefer the DTH platform over the traditional but disorganised cable distribution route. Therefore, they want DD Direct Plus to carry their channels because it has a satellite footprint all over the country. Sensing a revenue-earning opportunity here, Prasar Bharati is adopting e-auctions to sell slots on its DTH platform to the highest bidders.

Out of the current 59 channel capacity, it will auction 20 slots by next week. By December, it plans to auction another 175 slots. All auctions will be valid for 12-months. With a minimum reserve price of R1.5 crore, there are expectations of selling each of the slots at around R2-2.5 crore. Therefore, Doordarshan can virtually generate around R400 crore in revenue every year by auctioning slots on DD Direct Plus. Secondly, it is also looking at e-auctioning five primetime slots on DD National on each of the five working days to leading production houses. The winners will not only be expected to deliver high-quality content to Doordarshan but can regain their investments by selling free commercial time within the 30-minute slots to the advertisers.

This way, Doordarshan won’t have to spend on creating content or marketing it to advertisers but will get to earn money by simply auctioning the slots to professionals who are in the content creation business. Of course, Doordarshan will reserve space for its own network of 21 channels on its platform free of cost. Also, it plans to conduct e-auctions on the primetime slots on DD National, its flagship entertainment channel.
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