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SRM UNIVERSITY, KATTANKULATHUR 603203

COURSE : Ph. D
ASSIGNMENT ON RESEARCH METHODOLOGY
NOVEMBER 2010

DOORDARHSAN : BROADCASTING BLUES

[DD India’s national television network is one of the world’s largest broadcasting
organizations with respect to the infrastructure it possesses. It present telecasts
programs on 19 channels. Over the years, DD has been losing its advertising revenues to
its competitors [private channels]. The continuously falling Television Viewers Rating
added to the problem. DD has also been facing many problems regarding its
managements, right from the time when Prasar Bharati was created. In mid-90’s, cable
television reached many Indian homes and several private channels were launched. All of
a sudden DD had to content with a host of channels whose programs were better
produced. Poor quality of transmission and program content prompted viewers to switch
to private channels. The case provides an overview of the problems faced by DD due to
mismanagement and competition from private channels.]

“DD needs an owner” – CEO, Carat Media Services India.

IS DD DEAD ?

After years of falling revenues, in 1999-2000 DD had a revenue growth of 50%. In 1999-2000,
DD earned revenues of Rs. 6.1 bn compared to Rs. 3.99 bn in 1998-99. DD showed signs of
revival with the launch of DD Worlds [a channel for NRIs] and had a certain measure of success
with some of its regional channels [Table – 1 DD Channels : A snapshot]. However, by the end
of 2000-01, DD’s revenues were projected to grow at 6 – 15 % while private channels such as
Zee T V, Star and Sony had a projected 40 –50 % revenue growth.

According to some analysts, DD’s sagging revenues were only the tip of the iceberg. DD was
plagued by several problems. By the late 1990’s, most private producers and advertisers and a
good part of the audience had deserted DD. Not even one car company advertised on DD and
even two wheeler manufacturers kept away. Advertisements of Pepsi and Coca – Cola were
found only during sports telecasts. Only FMCG companies stuck to DD, because its terrestrial
network would help them to reach the rural and semi urban audience. Despite having over 21000
employees, DD outsourced 50 % of its programs from private producers.

In the late 1990’s, DD faced allegations of large scale scams and irregularities. Under-utilized
infrastructure, improper investments and poor financial management adversely affected DD’s
performance. In 1992, when the Government opened the airwaves to private players, DD had to
face competition from private satellite channels. In Cable and Satellite [C & S ] homes it was
found that DD programs had hardly any viewers. The depleting Television Viewer Ratings [TVRs]
of the DD programs was also a cause of concern as advertisers deserted due to its low viewer
ratings.

According to analysts, DD would need a budgetary support of Rs. 5 bn during fiscal 2000-01 to
sustain itself, as its revenues would not cover its expenditure. Many analysts felt that
privatization would be the only solution.

DD : THE INSIDE STORY

DD was launched in 1959 as the National Television Network with a modest 21 community sets in
Delhi. In the year 1982, with the introduction of regular satellite link between Delhi and different
transmitters, DD began the transmission of national programs. In the same year, DD switched to
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colour transmission. Soon it had penetrated every nook and corner of the country, cutting across
demographic and geographic barriers.

DD had a three-tier program service – national, regional and local. The national programs
focused on the national culture and included news, programs on current affairs, and science,
cultural magazines, serials, music and dance recitals, plays and feature films. At the regional
level the programs were similar to the ones broadcast at the national level, the only difference
being that they were broadcast in the regional language.

In 1984, DD introduced a second channel [DD2] in cities like Delhi, Mumbai, Kolkata and
Chennai. DD2 was targeted at urban viewers, particularly the young viewers.

In 1995, DD launched DD – India, its international channel to cater to the NRI population. This
service covered SAARC countries, Gulf countries, West Asia, Central Asia, North Africa and
Europe. In the same year, DD entered into an agreement with the Cable News Network [CNN]
and launched a 24 – hours news and current affairs channel : DD News. In 1999, DD launched a
separate channel for sports.

In the early 1990s, about 479 mn people in Indian homes viewed DD and an additional 1.5 mn
watched DD on community sets. DD was ahead of the private channels in terms of viewership
with a 90% reach. However, in the late 1990s. it could not maintain the lead and private channels
were catching up in terms of revenue even though they lagged behind in viewership and reach.

Cable onslaught

In 1984, cable television entered India. For local entrepreneurs, cable television provided a good
business opportunity, as investments required to install a cable network were low. In the early
1990s, many private television channels were launched. Zee TV launched in 1992 led the pack.
During 1992-94, there was rapid increase in the number of cable connection in Western and
Northern India. In Tamil Nadu and Andhra Pradesh, a number of Tamil and Telugu channels
came up in the mid-1990’s.

Though by 2000, DD had an incredible reach of 70 mn homes, in comparison to C & S’s reach of
only 30 mn homes. It could not turn this network into an advantage [Table II for growth of cable
and satellite penetration in India]. In urban households, DD programs had hardly any viewers.
DD was also behind the private channels in terms of ad revenues, as its TVRs were very low
compared to the TVRs of programs on private channels.

Falling Revenues

During 1996-99, the TV advertisement market grew by 76%, but DD’s revenue from
advertisement registered a negative growth [Table III for fall in revenues of DD]. Though DD
continued to be number one in overall audience share, it lost out on viewership segments that
had the highest purchasing power.

In 1998-99, DD’s revenue from advertisements were Rs. 4 bn [25.8% of the market], Zee TV was
close with Rs. 3.85 bn, Sony had Rs. 2.53 bn and Star channels grossed Rs. 2 bn. But the ad
revenues of private channels have grown significantly, when compared to those of DD. During
the period 1996-99, Zee registered a growth of 122% in ad revenues, Sony 299% and Star
channels 206%. During the same period, DD’s ad revenues went down by 70.17
%. DD’s falling TVRs were a matter of concern for clients like Hindustan Lever – DD’s largest
advertiser. Said Ashutosh Srivastava, VP, HTA-Fulcrum, the media-buying arm of HLL, “ Our
only source of reaching 40% of this country is going down.” Till 1998-99, 70% of HLL’s ad spend
went to DD but by 2000-01, due to falling TVRs HLL’s ad spend to DD had gone down to 50%.
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During 1999-2000, producers and distributors stopped giving films to DD when it began to
demand a minimum guarantee of Rs. 10 mn to broadcast a film. This forced DD to repeat the
same old films that it had aired several times, and the RVRs went down further.

According to some analysts, DD’s revenues were going down because advertisers considered it a
down market channel, which catered only to the lowest socio-economic groups, whose
purchasing power was limited. The revenues earned by DD showed a negative growth during
1997-99. In 1999-2000, DD saw its revenue grow by 52.8%, but in 2000-01, it was projected to
grow only at 6% [Table III]

Identity Crisis

DD’s problems were largely attributed to what Kiran Karnik, former CEO, Discovery
Communications, India called ‘its loss of identity. Said Karnik, The channel has lost its identity,
What is Doordharshan : Is it a public broadcaster or a commercial entity ? Initially, DD officials
had envisaged that the national channel would play the role of public broadcaster, while DD
Metro would be the commercial channel. Private producers and advertisers pointed out that this
attitude increased the confusion. They argued that no other network had two channels competing
against each other.

With the launch of the Star News Channel, [the first independent news channel] in 1998, DD
News lost its viewers to Star news. The in-depth analysis of news items by Star News caught the
imagination of the viewers [Table IV Comparative study of different news channel]. DD’s image
of being the propaganda machinery of the Government also went against it.

Some analysts said political interference and corruption were another reason for DD’s poor
performance. In 1997, The Indian Broadcasting Bill was introduced in Parliament. The Bill was
not passed, but it was enforced through an ordinance nearly a decade after it was enacted. DD
was brought under a holding company called the Prasar Bharati. In 1998, the Government
sacked Prasar Bharati CEO SS Gill and the Government made DD answerable to a parliamentary
committee. Political interference at the top level made matters worse for DD.

There were allegations that members of the Central Commissioning Unit of DD took bribes from
producers to air their programs. In 1998, the CBI arrested two DD officials for taking bribes from
a serial producer. This incident focused attention on the rampant corruption in the organization
and forced management to issue guidelines regarding acceptance of gifts by employees.

DD had a poor track record in both payments to and collections from private players. Over 50
companies owed Rs. 18.2 mn to DD, as on July 2001. Amitabh Bachchan Corporation Limited
was DD’s highest debtor with outstanding dues of Rs. 330 mn.

Another allegation that DD faced was that it had allowed International Cricket Council’s [ICC] ex-
chief Jagmohan Dalmiya and World Tel’s Mark Mascarenhas to defraud it of Rs. 160 mn over the
telecast of 1998 tournament in Dhaka.

The exorbitant prices that DD charged for advertisements slots also contributed to its poor
performance. DD charged the producers around Rs. 1 lakh for 10 seconds, while some of the
highest rated soaps on private channels charged half that price.

DD did not have a marketing team, which could market the advertisements slots as a package.
Private channels like ZEE and Star had their own marketing teams, which provided the
advertisers with a package of advertisement slots on their programs. But DD had 56 different
producers with 56 different half-hour programs slots for four hours of prime time each week.
Each producer sold commercial time separately, to the advertisers. But advertisers preferred
package deals, which would give them airtime across the programs for a whole week.
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Breathing fresh life into DD

After SS Gill was sacked in 1998, Rajeeva Ratna Shah was appointed as new CEO of Prasar
Bharti. Shah began overhauling the programs of the two DD channels and weeding out
corruption in the network. He stopped commissioning programs on DD1 and DD2. He decided to
auction programming hours to the private players who produced the programs for DD and market
them. Shah also announced the setting up of a board comprising eminent film-makers, actors,
poets, writers and people from different walk of life. This board was to be entrusted the task of
revamping DD.

In 2000, the government appointed a committed headed by Shunu Sen [CEO, Quadra Advisory,
a strategic marketing Consultancy], NR Narayana Murthy [CEO, Infosys] and Kiran Karnik to work
out a program for reviving DD. The committee considered three options. : Privatizing of DD,
continuing to run it as a Public Service Broadcaster [PSB], and running DD on both PSB and
commercially viable lines. Of the three options, the committee recommended the third option.
The committee felt that there was no need to privatize DD, but recommended drastic steps for
reviving it.

Some of the important steps suggested by the committee were :

 Downsizing 25 % of DD’s 21000 strong staff
 Getting into new media
 Setting up its own marketing department
 Developing a sharper programming focus.

One of the recommendations was to improve the quality of broadcast. DD sought the help of
BBC to digitize its channels. Modi Entertainment Network began distributing the five DD
channels via satellite. DD went in for a revenue sharing deal with B4U for showing movies, and
auctioned the 7 : 10 pm slot on DD Metro to the HFCL – Nine networks. In addition to Rs. 1.21
bn that DD got from this deal, the move helped DD to penetrate urban homes as well as C & S
homes to some extent. DD also entered into an agreement with Direct to Home platforms like
Echostar and Astra to distribute DD – World in 79 countries. DD employed Accenture to advise it
on how to go about revamping its financial, management and administrative systems. The
National Institute of Design was employed to redesign the logo.

In 2000, DD announced that it would start its own peoplemeter project through a separate
corporate entity in partnership with a few private channels and some advertisers. DD felt that its
programs were not getting enough viewership ratings because the viewer samples used by the
two firms doing the ratings – IMRB – AC Nielsen and ORG MARG were largely from C & S
homes. Their ratings did not accurately reflect the viewing habits of the Indian populace.

According to most, these steps were bound to have a positive effect on revenue. However, for
real growth DD had to be freed from political interference.

TABLE I : DD CHANNELS : A SNAPSHOT

DD 1 Primary channel with national, regional, local and educational programs on a time
sharing basis
DD 2 Metro entertainment channel targeted at urban viewers, particularly the young
viewers, Programs relayed by the terrestrial transmitters in 47 cities
DD 4 to DD Ten separate regional language channels : Malayalam, Tamil, Oriya, Bengali,
13 Telugu, Kannada, Marathi, Gujarati, Kashmiri and Assamese
DD 14 to DD Networking of the regional services of the four Hindi speaking states : UP, Bihar,
17 MP and Himachal Pradesh
DD 18 Punjabi Regional Service
DD India International channels
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[DD World]
DD Sports Sports channel
DD News 24 hours news channel

TABLE : II : CABLE TV GROWTH IN URBAN INDIA

YEAR NUMBER OF
HOUSEHOLDS WITH
CABLE TV [IN MILLION]
1992 1.20
1993 3.30
1994 11.80
1995 15.00
1996 18.00
2000 22.00
30.00

TABLE III : FALL IN REVENUES OF DD

YEAR REVENUE [RS. GROWTH OVER
BN.] PREVIOUS UYEAR [%]
1995-96 4.30 8.10
1996-97 5.72 33.20
1997-98 4.90 - 14.30
1998-99 3.99 - 18.50
1999-00 6.10 52.80
2000-01 6.50 6.00
[Estimate]

TABLE : IV COMPARISON OF THE NEWS CHANNELS

STAR NEWS ZEE NEWS DD NEWS
Channel encrypted Channel not encrypted Channel not encrypted
Decoders are required Can be freely aired Can be freely aired
Content caters to the Content caters to the mass Content caters to the mass
premium segment market market
English predominant Hindi predominant language Hindi predominant language
language
Only premium brand’s All brands accepted. Not No ads. Only social
ad taken. Very selective regarding ads. messages were broadcast
selective regarding ads

Questions :

1. Examine the research scope in the above case with which Doordharshan can identify
the problems and determine the solution.
2. Considering the financial status of DD, what type of research is appropriate to change
the situation ?
3. Construct a questionnaire to get the opinion of the cross section of the viewers with
regards to the quality of transmission, contents, falling Television viewing rate and
competitor performance.
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4. Discuss the tools of analysis which would be used to analyse the data collected
through the questionnaire.
5. Based on the analysis, if you are required to develop a turn around strategy what type
of research based strategy would you suggest ?