Internet has benefited enormously because of free content. Since competition is really fierce between content providers and consumers can switch with one click, pricing of online content for newspapers and magazines is easier said than done. However, there are recent reports about Microsoft’s Bing negotiating for exclusive news content deals.
In this post, I try to draw a parallel between pay channels and free channels on DTH platform. Several channels in recent past have become pay channels. Almost, all channels after they became pay channels, offered their services for free for limited durations. Also, even after they become pay channels they have introduced “teaser promotions” for limited durations to gather more subscribers. Switching from free content to paid content is about trade-off between advertisement revenue and subscription revenue. If executed right, both can increase.
CNBC TV18 is one of my favorite channels and until six months ago, I had the package from my DTH provider which included it by default. I did not care if it was pay channel or a free one. However, with price competition in DTH service providers, I moved to a no frills package and it became apparent that I cannot buy this channel standalone, I need to buy a whole bundle which was fairly expensive. When the price became apparent, I considered the plus and minus of not taking the channel. From an analysis point of view, the channel’s coverage is the best. Competitors like NDTV Profit were also pay channels. UTVi was free (for limited duration), however, news coverage lacked depth and anchors had little knowledge or expertise. At the same time, UTVi served the limited purpose of information on share prices and charts, and I shifted to online transmission of CNBC TV18, its website moneycontrol.com and newsprint to make up for analysis and insight. For the moment, if I assume that moneycontrol.com or its online transmission was paid for, will I pay for my DTH package? Most probably yes, I like the content CNBC TV18 delivers and will probably pay for it, if I cannot get it for free on another alternate channel.
The point I want to make is about competition among delivery channels and how consumers trade off online with print and TV. It will help CNBC if it kept the access to http://www.moneycontrol.com and online transmission of CNBC TV18 free for some-time to have larger number of viewers during early growth stage of product adoption. Even though, it may lose some of its paid subscribers on DTH platform. It may want to switch to pay per use or subscription model for online content during the maturity stage.
In the Indian context, we are probably entering the second stage of growth in online content with 3G round the corner. My hypothesis is that online business channels will the first ones to benefit – if you can watch CNBC TV18 on your mobile phone while going from one meeting to another, in your car, or in a lift, you will probably do so.
Disclaimer – I am an investor in shares of TV18 network which owns and runs CNBC TV18.
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