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Less than a year after NDTV broke off with TAM Rating, many Indian broadcasters have walked out of the ratings monopoly. Does this rating serve any useful purpose?
Less than a year ago, NDTV’s decision to sue TAM (Television Audience Monitoring) for a billion dollars sparked many derisive comments. But just two months after a New York court dismissed the case, several broadcasters have walked out of the monopoly TAM system, making the exact same allegations as NDTV had. What has changed in one year? And why did broadcasters not strengthen NDTV’s hands then? The broadcaster had accused TAM of manipulating ratings on behalf of those who paid bribes. The fact is that Neilsen, which owns TAM, is part of the WPP group, which is such a dominant player in the media buying business that many broadcasters probably didn’t dare to take it on. Since that situation remains unchanged, what has emboldened broadcasters, such as Sony, Times Global Broadcasting, Sri Adhikari and probably the Network18 group, to walk out today?
One reason could be that the economic downturn has shrunk the advertising pie, especially since big spenders like the auto sector are badly hit. With less money to go around, some broadcasters with cross-media offerings probably want a bigger share of the revenue. It hardly helps them to be judged by TAM alone, while those affected by lower ad-spends are in the same boat.
While broadcasters squabble over ratings, those who commission surveys and ratings in India know how flawed they are. There is also merit in the argument that 8,000 people-meters for a population of 153 million or more television-viewing households is shockingly low when divided by language, specialisation and interests. The real question is: Why should TAM rating decide ad-spend? Is it because media planners are just too lazy to do real homework and justify their paycheques? Social media, like Twitter, today are ruthless arbiters of public opinion. They provide a minute-to-minute verdict on what is watched and what is rejected by a big multiple of 8,000. Smartphones ensure accurate social media feedback from the entire target market that advertisers want to address. Monitoring social media feeds and using statistical tools to standardise information should provide far better viewer data than a few stupid meters. But that would crack open the business model of the WPP group. The only ones who can break this dominance are the advertisers themselves and economic downturn is a good time for them to do some fresh thinking to reach potential buyers.
The Financial Conduct Authority of the UK has banned the sale of a set of ‘risky’ investments to all but the super rich. When will Indian regulators act?
Ponzi and collective investment schemes (CIS) thrive all over the world because of powerful political backers. But a post-2008 shift in regulatory focus from caveat emptor (buyer beware) to vetting and restricting the sale of potentially harmful or toxic products is now turning the heat on these dubious schemes as well. The Financial Conduct Authority of the UK has banned the sale of a set of ‘risky’ investments to all but the super rich—people with an annual income of over £100,000 or investible funds of £250,000—from January 2014. The UK regulator classifies these as sophisticated investors who ought to understand the risks involved.
Interestingly, the CIS targeted by the regulator are investment in overseas property, fine wines and traded-life settlements. Investors in the UK had invested over £4 billion in such unregulated schemes and their losses run into millions of pounds. Interestingly, it turns out that UK investors were still being sold teak farms and bamboo plantations.
Unfortunately, the Indian situation is worse. Lakhs of people throughout India lost over Rs10,000 crore to plantation scams in the mid-1990s. Since then, there has been a string of high-profile failures, such as Citi Limouzine, SpeakAsia and Stock Guru, which raised Rs1,000 crore in a matter of months. Yet, our regulators and politicians refuse to initiate tough action. Dodgy companies, such as QNet and MMM India, are still luring the educated, but financially gullible, youngsters. More criminal is the refusal to rein in chain-marketing schemes, such as Saradha, MPS Greenery and Rose Valley, which have wreaked financial havoc among the low-income group in West Bengal and nearby states leading to 18 suicides so far. All these companies have enjoyed the patronage of powerful regional politicians.
Last week, former Union secretary EAS Sarma wrote to the ministry of corporate affairs (MCA) exhorting it to work with the financial regulator to evolve a way of tracking shell companies which are used to launder black money through a complex web of entities. He pointed out that every major scam in India uses a network of shell companies to evade detection. But this, too, has gone on for decades. The most famous of these were the shell companies of the Reliance group, exposed by the Indian Express in the mid-1980s—a decade before India embarked on its economic liberalisation programme. Using layers of shell companies to launder money through overseas tax havens and back into the Indian stock market has increased exponentially since then.
Consequently, we have no clear regulation, or legislation, to protect people from harmful and unregulated products. Only a few large CIS manage to attract the attention of the market regulator.