The economics of landing page, and what’s driving up the cost

While a lot has been spoken about the legal and ethical sides of the issue, exchange4media looks further, into the financial aspects of landing page

by Javed Farooqui
Published - August 26, 2022
6 minutes To Read
The economics of landing page, and what’s driving up the cost

Landing page, the first channel that gets displayed when a viewer switches on the TV, has divided the TV news industry. While some call it an unethical practice, others term it a legitimate distribution tactic to attract more audiences.

The legal and ethical aspects of the landing page issue have been discussed threadbare through consultation papers issued by the Telecom Regulatory Authority of India (TRAI), and by the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).

However, there is not much information in the public domain about the financial aspect of the landing page. Put simply, how much does it cost to put a channel on the landing page of a distribution platform operator (DPO)? While there are no easy answers to this question, exchange4media has tried to gather information about the cost of placing a channel on the landing page by speaking to multiple executives from the TV news and distribution side.

A veteran TV distribution professional, who did not wish to be named, said that a big multi-system operator (MSO) would charge anywhere between Rs 20 crore to 25 crore for a landing page slot on an annual basis. "For 5 million subscribers, the landing page cost is about Rs 20 to 25 crore depending on negotiations. This works out to Rs 2 crore per month and Rs 4 per subscriber. This pricing is applicable for channels across genres," he stated.

He also pointed out that most news channels don't do landing deals with big MSOs since they cannot afford to invest so much money in landing page placement. "They do landing pages with independent and smaller MSOs because big MSOs charge big money. Most news channels cannot afford to spend Rs 50 crore to Rs 80 crore on big distribution platforms.”

The industry veteran also said that news channels go to smaller markets and smaller players who can contribute higher. "Because the news genre is smaller, a 30-second or a 40-second landing page presence contributes a lot. In case of GEC, landing pages don't contribute much to the overall reach and viewership. Entertainment channels use landing pages to get more sampling. However, in the case of news channels, it leads to higher reach and time spent since the overall universe is very small and there is cut-throat competition in the market."

According to him, small and mid-sized MSOs would be charging Rs 15-20 lakh per annum at Rs 4 to 5 per set-top box (STB). "Even the smaller networks charge Rs 4 to 5 per subscriber. If an operator has 25,000 subscribers, then at Rs 4 to 5 per subscriber, it works out to Rs 15,00,000 per annum. So, a smaller network would be charging anywhere from Rs 15 to 20 lakh," he stated.

A top executive from a leading news broadcasting company said buying landing pages on big networks would cost anywhere between Rs 35 to 40 crore per annum. He further stated that a leading national MSO with a strong footprint in Kolkata charges Rs 14 crore for a landing page. “It's not easy to get a landing page on big networks like DEN, Hathway, GTPL, and Siti. Putting channels on the landing page does impact ratings and it helps in upping the revenue,” he added.

Another senior TV news professional noted that the size of the investments in landing pages depends on the size of the DPO. "Selling landing page is rampant in the cable industry. The price varies from Rs 1.5 crore for a small network to Rs 20-22 crore for a large network," he stated.

The landing page is being used to shore up reach ever since TRAI's New Tariff Order (NTO) came into effect and impacted the reach of big networks, he said. The landing pages phenomenon became rampant in the news genre in 2017 due to competition in the English news genre with the entry of a new player, he further said.

The distribution head of a leading news network said MSOs don't have a rate card for landing page deals, therefore, it is difficult to quantify how much each cable network is charging the news channels.

"It's very difficult to put a specific figure on the cost of taking a landing page since it is a negotiated deal. It also depends on the aggression of the network. One of the leading media networks in the country with a presence across genres must be easily spending upwards of Rs 50 crore on landing pages," he opined.

He noted that landing pages help channels to garner eyeballs, awareness, and time spent, which is why a lot of companies are going all out to put their channels on landing pages. That said, he added that buying landing pages is not viable for most TV news companies.

According to a top official with a leading news network, most big networks charge Rs 1.5 crore per month on average for landing pages. Since the landing page is the default channel on most cable networks it helps in bolstering reach and time spent, he added.

What is driving up the cost of landing pages?

The distribution professional quoted above said that the cost of landing pages is increasing due to the fact that a lot of news channels have seen a growth in their viewership by placing their channels on landing pages.

He added that once a news channel benefits from the landing page, other channels also take notice and try to buy the landing page from the operator even if it means paying double the amount. This helps the DPO to drive a hard bargain with the news channels, he pointed out.

"If a network starts contributing to viewership then the landing page rate of that network also increases by 20% to 30%. Once the rating sees a jump, the operator will also bargain aggressively for growth and the rival channels will ensure that the prices go up," he stated.

The distribution head noted that news channels are queuing up before the DPOs to get their channels placed on the landing page. This, he said, was creating a demand and supply problem which was beneficial for DPOs even as news channels end up paying more.

"It's irrational to spend on landing pages beyond a point. The cost of landing pages has gone up as news channels are competing with each other to buy landing pages. With demand surpassing the supply, DPOs have started demanding more money for landing pages. Even smaller channels have started buying landing pages to increase their viewership," he said.