Doordarshan case study

Doordarshan's Problems: Is DD Dead? INTRODUCTION

Doordarshan had a modest beginning as an experimental telecast starting in Delhi on 15 September 1959, with a small transmitter and a makeshift studio. Regular daily transmission started in 1965 as a part of All India Radio. Doordarshan began a fiveminute news bulletin in the same year. Pratima Puri was the first newsreader. Salma Sultanjoined Doordarshan in 1967, and later became a news anchor. The television service was extended to Bombay (now Mumbai) and Amritsar in 1972. Up 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 on 1 April 1976. Each office of All India Radio and Doordarshan was placed under the management of two separate Director Generals in New Delhi. Finally, in 1982, Doordarshan took shape as a National Broadcaster. Krishi Darshan was the first program telecast on Doordarshan. It commenced on 26 January 1967 and is one of the longest running programs on Indian television. Doordarshan operates 21 channels:Two All India channels (available terrestrially), DD National and DD News.11 regional language satellite channels (RLSC), four state networks (SN), an international channel, a sports channel, DD Sports and two channels Rajya Sabha TV and Lok Sabha TV for live broadcast of parliamentary proceedings. The regional languages satellite channels have two components – the regional service for the particular state relayed by all terrestrial transmitters in the state and additional programs in the regional language in prime time and non-prime time available only through cable operators. DDSports Channel is exclusively devoted to the broadcasting of sporting events of national and international importance. This is the only sports channel which telecasts rural sports like KhoKho, Kabbadi etc. something which private broadcasters will not attempt to telecast as it will not attract any revenue.

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Doordarshan's Problems: Is DD Dead?

SUMMARY

After years of falling revenues, in 1999-2000 Doordarshan (DD)had a revenue growth at 50%. In 1999-2000, DD earned revenues of Rs 6.1mn compared to Rs 3.99 mn in 1998-99. DD showed signs of revival with the launch of DD World (a channel for NRIs) and had relative success with some of its regional channels (Refer Table I for different DD channels). However by the end of 2000-01, DD's honeymoon with success seemed to be over. In 2000-01, DD's revenues were projected to grow at 6-15% while private channels such as Zee TV, Star, Sony had projected 40-50% revenue growth Analyst's felt that DD's sagging revenues were only tip of the iceberg. DD was plagued by multiple problems, which found their roots in the mismanagement of affairs. By the late 1990's the private producers, advertisers and audience had deserted DD. Not even one car company advertised on DD and even two-wheeler manufacturers kept a low profile .Ads of Pepsi and Coca-Cola were found only during sports telecasts. Only FMCG companies stuck to DD because of its terrestrial network to reach the rural and semi-urban audience . In spite of having over 21,000 employees , DD outsourced 50% of its programmes from the private producers. In late 1990's DD faced number of allegations of largescale scams and irregularities. Under utilized infrastructure, improper investments and poor financial management plagued the performance of DD. In 1992, when the Government opened airwaves to private players, DD faced the heat of competition from private satellite channels In the Cable & Satellite (C&S) homes it was found that there were hardly any viewers for the DD programmes. The depleting Television Viewer Ratings (TVRs) of the DD programmes was also a cause of concern as advertisers deserted due to its low viewer ratings. Analysts felt that DD would need a budgetary support of Rs 5 bn during the fiscal 2000-01 to sustain itself as its revenues would not be enough to meet its expenditure. Analysts questioned the capacity of the Government to own DD and many felt that privatization would be the only solution.

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Doordarshan's Problems: Is DD Dead?

QUESTIONS AND ANSWERS 1. What is the best option, in your view, for DD? For several years Doordarshan was the only broadcaster of television programs in India. After the opening of the sector to the private entrepreneur (cable and satellite channels), the market has witnessed major changes. The number of channels has increased and also the quality of program, backed by technology, has improved. In terms of quality of programmers, opportunity to advertise, outreach activities, the broadcasting has become a popular business. Broadcasters too have realized the great business potential in the market. But for this, policies need to be rationalized and be opened to the scope of innovativeness not only in term of quality of program. This would not come by simply going to more areas or by allowing bureaucratic set up to continue in the organization. Strategically the DD needs to undergo a policy overhaul. DD, out of three options, namely privatization, public service broadcaster or a middle path, can choose the third one, i.e. a combination of both. The whole privatization is not possible under the diversified political scenario. Nor it would be desirable to hand over the broadcasting emotively in the private hand as it proves to be a great means of communication of many socially oriented public programmers. The government could also think in term of creating a corporation (as it did by creating Prasar Bharti) and provide reasonable autonomy to DD. So far as its advertisement tariff is concerned that can be made fairly competitive. However, at the same time cost of advertising is to be compared with the reach enjoyed by the doordarshan. The number of viewers may be far more to justify higher tariffs.

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Doordarshan's Problems: Is DD Dead?

2. Analyze the SWOT factors the DD has. The SWOT analyses involve study of Strengths, Weaknesses, Opportunities and Threats of an organization. SWOT factors that are evidently available to the Doordarshan are as follows: S – Strength  More than 1000 transmitters.  Covering 90% of population across 70 million homes against only 30 million homes by C & S.  More than 20,000 employees. W – Weakness  Rigid pricing strategy.  Low credibility with certain sections of society.  Quality of programs is not as good as compared to C & S network. O– Opportunities    

Infrastructure can be leased out to cable and satellite channel. Digital terrestrial transmission. Regional focused channels. Allotment of time, slots to other broadcasters.

T – Threats  Desertion of advertisers and producers may result in loss of revenues.  Due to quality of program the reach of C & S network is continuously expanding.  As the C& S network need the trained staff, some employees of DD may switchover and take new jobs.  Best of the market-technology is being used by the private channels.

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Doordarshan's Problems: Is DD Dead? 3. Why do you think that the proposed alternative is the best? Analysts also felt that 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 when after it was enacted. DD was brought under a holding company called the 'Prasar Bharti'. In 1998, Government sacked Prasar Bharti CEO S.S. Gill and government made DD answerable to a parliamentary committee. Political interference at the top level worsened the matters for DD. Some of the important steps suggested are:    

to downsize 25% of DD's 21,000 strong staff, getting into new media, setting up its own marketing department, developing a sharper programming focus.

It was also alleged that members of the Central Commissioning Unit (CCU) of DD were taking

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bribes from the producers to air their programmes It is suggested that the DD should adopt a middle path. It should have a mix of both the options. It should be economized on its operational aspects and ensure more productivity in term of revenue generation and optimization of use of its infrastructure. Wherever, the capacities are underutilized, these may be leased out to the private operations. At the same time quality and viewership of programs should be improved. Bureaucracy may reduce new strategic initiatives or make the organization less transparent. Complete privatization can fetch a good sum and may solve many of the managerial and operational problems. However, complete public monopoly is not advisable because that denies the government to fully exploit the avenue for social and public use. The government will also lose out as it will not be able to take advantage of rising potential of the market.

CONCLUSION 5 Strategic Management

Doordarshan's Problems: Is DD Dead?

DD was plagued by multiple problems, which found their roots in the mismanagement of affairs. Analysts felt that DD's revenues were going down because advertisers considered it as a downmarket channel, which catered only to the lowest socio-economic classifications, where purchasing power was limited. The poor performance of DD could also be attributed to its pricing for the advertisement slots. DD charged the producers around Rs 1 lakh for 10 seconds whereas some highest rated soaps on C&S homes charged half of that. Another major problem that plagued DD, was the lack of a marketing team, which could market the advertisement slots as a package.

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