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Ep 27: Television Price Controls | The Seen and the Unseen


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A few days ago, I woke up and found that I was not on my bed.
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No, instead I was curled up in what appeared to be a box.
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I was curled up like a little kitten inside this box and the top was closed and the bottom
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was closed and three sides were closed and on one side, just one side, there was a window
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with thick transparent glass.
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I blinked a few times and peered out through this window and on the other side, I saw a
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family of four sitting in a living room staring at me.
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There were four of them, mummy, daddy, one boy, one girl, they were all staring at me.
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I wondered what was going on.
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I shouted, hey, help me, let me out of here.
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I'm trapped inside this box.
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The boy giggled, mummy G smiled, daddy G looked stern as if he was not amused.
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None of them moved.
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All of them kept staring at me.
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The boy reached out his grubby hand for some popcorn.
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I don't understand this, I shouted, I'm trapped in this box, let me out.
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How can you just watch?
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None of them moved and this time none of them smiled also as if this was amusing no more.
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Then I noticed a mirror on the wall behind them and in that mirror, I saw all of them
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from behind sitting and watching a television and my alarmed face was in that television.
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I was trapped inside the television.
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What the hell I shouted, let me out of here.
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Why am I on television?
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I mean in television, whatever, let me out, let me out.
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I started banging on the screen of the television from inside of course.
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Then daddy G got up.
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He said to his family, it is appalling.
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What is this nonsense?
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The quality of Indian television has become so bad and saying that he pointed the remote
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control at me and everything turned black.
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I lay there sobbing silently, trapped in the darkness.
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Welcome to the scene and the unseen, our weekly podcast on economics, politics and behavioral
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science.
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Please welcome your host Amit Varma.
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Welcome to the scene and the unseen.
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If you can hear these words, you're obviously listening to this podcast and I want to congratulate
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you for your wise choice.
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You could have been doing something worse with your time.
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You could have been watching Indian television.
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You know, all of us we mourn the quality of our television, but we often assume that it's
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a cultural issue.
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It has nothing to do with economics or government regulation.
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Well, recently I read this excellent piece in the Hindustan Times with the headline,
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why are Indian news channels so disappointing?
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It was written by Ashok Malik and in his piece, he explained how price controls imposed by
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the government on how much channels can charge their subscribers transformed the incentives
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of the channels.
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In the case of the news channels, it led to a race to the bottom, but it affected all
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other TV programming as well.
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Children's channels, for example, ran crappy reruns instead of investing in quality indigenous
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content.
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Well, Ashok is a renowned columnist and writer.
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He won the Padma Shri last year for his journalism.
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He's currently a fellow at the Observer Research Foundation besides being a prolific columnist.
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I'm delighted that he's agreed to join me on the scene and the unseen today to discuss
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Indian television.
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Welcome to the show, Ashok.
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Hi Amit.
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Looking forward to this.
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Ashok, when back in the day when you and I grew up in the seventies and eighties and
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so on, we got a lot of our knowledge about India and about our culture and so on from
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things like Amchitra Katha and kids today, of course, don't read Amchitra Katha and things
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like that.
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They watch television all the time.
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Can they get the same kind of learnings that we did from television?
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You know, that's a very interesting question you've touched upon and it's something which
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I've been thinking about for a long time because I have two young children who watch a lot
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of television, who are inquisitive young children, but who don't read as much as, say, you and
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I did when we were growing up.
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And whether it's Amchitra Katha or the Nehru Baal Pustakale, we had access to a great amount
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of published material on Indian history and heritage.
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Not all of it was perfect, but it was still very, very useful and educative.
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The television equivalent frankly does not exist.
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In fact, today's children don't even watch Disney.
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They watch reruns of Japanese cartoons because 30 or 20 year old Japanese cartoons are most
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easily and inexpensively available to television studios.
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They are imported from Japan or elsewhere and reruns of them are telecast over and over
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again and all our kids end up watching that.
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To run a serious, well-produced national geographic type or even semi-national geographic type
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channel in any language in India, English or regional, depicting Indian history, culture,
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and the richness of this country, the diversity of this country, is very, very difficult because
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such programming costs money.
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Such programming would require using animation and graphics, which ironically is produced
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in India but produced by companies that are outsourcing firms for Hollywood filmmakers.
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But they can't do the same work in India for children's programming or heritage programming
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for Indian television because there just isn't a market for it.
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Channels tell you we can't recover money from our subscribers or consumers because there
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are price gaps and the market is structured in such a manner that even if I want to pay
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100 rupees for a channel of this nature, I can't.
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So you end up getting, frankly, rubbish programming on television for children.
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You get endless reruns of Japanese cartoons, some of which are good, some of which are
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just rubbish.
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So I want to shift for a moment from children's television, which we'll come back to and talk
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about news channels.
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The reason I invited you on this show for this episode was this excellent piece you
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wrote for the Hindustan Times a few days ago and where you spoke about how our news channels
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are now, quote, increasingly part of the entertainment economy rather than the information ecosystem,
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unquote.
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And I'd like to quote a para from you just to give a sense of what that's like.
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And I think all the listeners will pretty much agree with all of this, it'll strike
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a chord.
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Quote, why are Indian news channels so astonishingly disappointing?
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They oscillate between over-the-top studio debates and relatively sober studio debates.
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There is rarely deep reportage.
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Documentaries are practically unheard of.
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Spending on editorial and newsgathering scares managements.
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Preference is given to paying some talking head a few thousand rupees to scream for 30
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minutes.
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What is at the root of this?
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Question mark, unquote.
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And what you go on to speak about being at the root of this is, in fact, common to why
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children's television is so messed up and entertainment television is so messed up.
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And that's what I'd like you to elaborate on.
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OK.
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There are two, three things that are wrong with news channels in my experience.
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One, of course, it is a lack of imagination of editorial leaders and journalists.
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Television in India, perhaps in the West as well, has been reduced to one reductionist
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idea, right versus left.
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So, Kumle has a fight with Kohli, let's make it right versus left.
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There's the Ayodhya issue that let's make it right versus left, which makes sense because
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that is a right versus left issue.
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But Kumle versus Kohli is not a right versus left issue.
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But we end up converting everything into a right versus left issue.
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Because that's the only reductionist model television seems to know.
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So every evening you get two right-wingers, two left-wingers getting to scream at each
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other over any issue.
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But why aren't managements willing to spend on newsgathering, on editorials, on sending
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out correspondence to not just parts of the world, but parts of India?
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Again, that is because we have legislated the subscription model to death in India.
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When we were growing up and reading newspapers, there was this hope that one day you'd be
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able to produce a magazine or a newspaper that wasn't aiming at a mass circulation,
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that wasn't aiming at half a million or two hundred fifty thousand buyers or readers,
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but was aimed at maybe twenty thousand high quality readers and would charge a hundred
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rupees rather than fifty rupees or twenty rupees per copy.
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This is really the economist model because you spend a lot of money buying The Economist
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irrespective of whether you live in Minnesota or Meerut.
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But you read it because, well The Economist has seen better days, but you read or read
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The Economist because it gave you a certain value.
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This model did not exist in India because our newspapers and magazines had an advertiser
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driven model.
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But that was a conscious decision newspaper managements took as private sector entities.
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In the case of television, the same model now exists, but it's been mandated by the
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state.
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So I'm not suggesting that news channel or managements would not have taken the same
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route they may well have, but here they don't even have a choice because TRAI, the Telecom
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Regulatory Authority of India, which is a telecom regulator, is not a content manager,
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has been given the job over the past 12 odd years, I think, since 2005 or 2006 of setting
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price caps on the bouquet you can buy from your DTH provider or your cable provider or
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whoever delivers television channels to your house.
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And they have priced it ridiculously low without any understanding of what content cost or
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what it takes to produce content.
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And so Balaji Telefilms rerunning four soap operas cost of content zero because they all
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exist already.
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And Amit Verma and Ashok Malik setting up a high quality news channel that wants to
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send correspondence from everywhere, from Iraq to America, which would cost a king's
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ransom.
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We will both be under a ridiculous price cap.
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And we will not be able to charge viewers what they would perhaps be willing to pay
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for a high quality news channel.
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And this is true for not just news, it's true for entertainment as well.
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Because in the West, something like 70% of revenue for channels across the board comes
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from subscribers, 30% comes from advertisers.
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In India, it's the reverse, 36% comes from subscribers and 64% from advertisers.
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In the case of news channels in India, just 10% of revenue comes from subscribers.
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So most channels have simply given up on subscription and said, the figures are so ridiculously
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low, we may as well make our channel free and not even chase subscribers for those five
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rupees or 10 rupees or whatever.
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Make it free.
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Let's make it part of the entertainment economy.
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Let's entertain our viewers and get ads.
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And so every evening, whether it's a right wing channel or a left wing channel or a center
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channel or whatever you want to call it, it's all equally disappointing for a country of
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such diversity, richness, intellectual depth and media consumption.
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And typically, I imagine how a media market would work is that if there is a news channel
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or an entertainment channel, which doesn't necessarily want to be broad based, but which
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wants to appeal to a specific niche with specific tastes, all they would really have to do is
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figure out a price point which that niche is willing to pay for that content.
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And then if it is feasible, then produce content according to that.
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And what you're essentially saying is what these price caps do is they make that impossible.
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You can't charge over a certain number.
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And therefore, even if there is a niche which is willing to pay more for higher quality
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content or even content of a particular type, they can't do that.
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And therefore, the channels, especially the news channels are forced to just apply to
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the, you know, take the easy way out, be lazy, not spend too much money on news gathering,
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just pick up the, you know, hot burning hashtag of the day from Twitter and set a debate around
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that and take the easy way out.
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Precisely.
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Now, let me again clarify that our newspapers and magazines do not have the burden of price
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caps, but they have not followed the subscription route.
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They've stuck to the advertiser mass circulation route.
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But that, I hope that is disappointing as well.
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That is a conscious decision taken by private sector managements.
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In the case of television, maybe the management should have taken the same decision all along.
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I'm not denying that.
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But there is a state or TRAI cap, which is what makes this different from what print
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is doing.
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What print is doing is also unforgivable.
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But here in this case, there is a price cap or in the case of television or in the case
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of news television in particular.
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And that is actually astonishing because it means that even if somebody wants to set up
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a serious entertainment or children's programming or of course news channel, he or she finds
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the market and market conditions impossible to deal with.
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The TRI will come in the way of that actually happening.
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So here's my question for you.
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I mean, these price caps happened some 15, 16 years ago, right?
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So what was sort of the thinking behind them and who are the interest groups that benefit
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from these price caps?
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You know, what happened was in the early 1990s when whole neighborhoods in our big cities
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began to be wired up using cable networks, the local cable operator was a local goon
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who actually jumped from building to building almost literally with a wire and wired up
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whole cities.
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Now, over the years, some of those networks became consolidated, became semi respectable
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businesses.
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But the cable business broadly in this country remains one run by Muslim men, local thugs,
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good political fixers and so on and so forth.
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So the idea back then, a very noble idea was that you must have a uniform pricing strategy
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so that a cable operator in neighborhood X where access and competition is limited will
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not be able to profiteer and cheat a consumer as opposed to a cable operator in neighborhood
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Z where there is more competition and access is easier.
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So that sounds a very good idea and you need to have a market regulator and the market
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regulator has to keep cable operators or DTH providers and so on and so forth under control.
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That makes perfect sense.
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But the mechanism that TRAI and the government adopted was to set price caps on channels
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because or rather price caps on bouquets of channels offered by cable operators and other
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service providers and that in effect became a price cap on a channel.
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So in preventing or attempting to prevent the cable operator from cheating the consumer,
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which is a legitimate aspiration and something which needs to be done, you ended up telling
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the channel that you can't charge above a certain price.
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And if you can't charge a certain price, I don't care whether your content costs less
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than that price or more than that price.
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I'm not going to allow you to charge above that.
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So you wanted to regulate the cable operator, you ended up punishing the creative economy
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or in this case the news media space and we left 10 years on the line with frankly completely
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disappointing and rubbish news television.
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So a well-meaning bureaucratic intervention like many well-meaning bureaucratic interventions
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with years on the line leads to something very, very different.
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So they essentially wanted to control the cable mafias and what instead the unseen effect
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however was that the quality of television suffered and consumers suffered and that whole
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paternalistic thinking behind price caps, which if something is valuable, let's make
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sure it's not too expensive.
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Yes, you see a dumbing down of television across the board, again, not just news.
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So you actually have consumers who are spending much more on let's say a Netflix or various
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platforms that they access using the net, they're spending much more on one subscription
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of any one of those platforms than they do perhaps in a year subscription of cable or
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DTH.
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Absolutely.
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And they don't end up watching cable or DTH.
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So who suffers?
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The Indian channels don't get the high quality viewers they want.
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They don't get satisfaction from producing content that is truly world-class or even
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respectable and they're losing their key subscribers or viewers really to digital.
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It is crazy and like just speaking for myself, I spent 650 a month on my Netflix subscription.
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I think my hot star comes to about a hundred bucks a month or whatever.
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And the fact is all this money could have been going to Indian channels if they had
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actually been able to spend money on content acquisition, which they would have been able
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to if they'd been allowed to charge prices for it because at some point or the other,
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this niche that exists, which Netflix and hot star have now jumped upon and Amazon prime
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have jumped upon would have been available to our channels much earlier, except they
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weren't allowed to reach this niche.
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So to carry on from there, my further question then is that if this is how things are, what
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hope do you have that things will change?
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What can drive change?
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What can drive say TRAI to remove these price gaps?
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What are the interest groups in play that would now prevent it from happening?
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What's in the way of change?
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Well, I guess the cable operators will be one very strong lobby to resist this because
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they would not want agency taken from them and moving on to either subscribers or to
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channels themselves.
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But frankly, digital technology is changing everything because digital is just one more
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way of delivering content like wired cable is.
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So either you bring both of them under price caps, which is completely ridiculous because
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I don't think Netflix would want to be under TRAI price cap, either you win them both under
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price caps or you free them both.
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It doesn't make sense otherwise, you know, technology has raced ahead of all of us.
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So you can't decide that I will have price caps on content delivered through one pipe,
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but no price caps on content delivered through another pipe.
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That's in a sense that's analogous to what's happening with Uber and black and yellow cabs
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that you had, you know, black and yellow cabs, the supply restricted with, you know, licensing
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regulations and so on, price ceilings and so on.
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And that market has been completely disrupted with Uber and now you can't turn the clock
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back and the same thing seems to be happening in terms of audio visual content.
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Yes, I mean, obviously, Uber is a slightly different example, but yes, I get what you're
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trying to say.
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But here, digital has completely changed the market anyway.
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Digital has also had a collateral impact in that it's thanks to the internet released
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so much of free content online, some of it dubious and some of it fake, but much of it
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not fake, but still available free.
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That the news business in India, that the model of the news business in India is under
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serious interrogation anyway, even without this price cap nonsense.
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So frankly, I don't know whether the news television business in India can now be rescued
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because even if price caps are lifted, people have got used to this opium or this opiate
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of free content.
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And once you get used to that, it takes a long time and a lot of trust for you to go
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back to a subscription based model, where you will pay a good amount of money every
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month with the assurance that the person you're paying that money to will deliver quality
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content and will not just deliver quality content for one month and then change his
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mind.
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So I'm afraid much of the debate we're having today, I wish we'd had it three or four years
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ago, five or six years ago.
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I think the advent of the internet and the ferocious rollout of digital technologies
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and online platforms may have put much of this debate behind us.
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And the news business in India may be under very serious threat.
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Some of our news channels may be beyond being rescued.
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That's a great point.
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And just speaking of myself though, a contributor that would be that I don't watch any news
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television at all.
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I simply can't stand to, however, if there was an intelligent news channel, I might give
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it a shot.
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And then therefore there is a niche.
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So you never know if you remove the price caps, what could happen.
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I'm actually more hopeful for radio opening up for news because you see news on television
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ends up being not what you hear, but what you watch.
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So people need to be dressed up.
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People need to be good looking.
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People need to be all sorts of stuff, which you don't need to be if you really ask me.
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But radio can have you and me sitting in whatever shorts and jeans in our homes or wherever
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we are or in a studio having a conversation.
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And it's also a less expensive platform or delivery mechanism than television because
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it simply requires less equipment.
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I'm actually hopeful for private radio, news shows, news commentaries, news discussions,
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not just news per se, because news per se is not easily available, but it's what happens
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after the news break, which is really what we're talking about and whether we can get
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something more intelligent than just four people screaming at each other every evening
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at 9 p.m.
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So I'm hopeful radio will do some of that magic.
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Ashok, what you're saying is absolutely music to my ears.
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And if you could see what I'm wearing now, I think you'd know exactly why.
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Ashok, thanks for doing this, man.
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I really appreciate this.
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Thank you.
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Thank you.
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To read Ashok's piece, which inspired this episode, search for an article titled Why
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Are Indian News Channels So Disappointing in the Hindustan Times?
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You can also follow Ashok on Twitter at Malik Ashok.
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You can follow me at Amit Verma, A-M-I-T-V-A-R-M-A.
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You can also read my blog India Uncut at IndiaUncut.com, where I upload all my personal work.
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And if you enjoyed this episode, you can browse our archival episodes at sceneunseen.in.
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This is episode 27, and the previous 26 episodes offer an interesting snapshot of an unseen
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India.
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Goodbye for now.
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If you enjoyed listening to the scene and the unseen, check out this exciting new podcast
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from Indus Vox Media called Keeping It Queer.
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Keeping It Queer is hosted by my friend Navin Narona, and he profiles LGBT people from all
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across the country, and some of the stories are really poignant.
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You can download it on any podcasting networks.
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Excuse me, bhaiya.
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Excuse me.
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Yes, madam.
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What's on the menu?
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On the menu, scene, unseen, podcasts, on-course, Cyrus Says, Married in India, Rediscovery
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Project, Empowering Series, Sexwax, IBM Likes, Simplified, Keeping It Queer.
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Tings and Destinations, My Neighbor Zuckerberg, and The Fan Garage.
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What do you want?
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Can you repeat it once?
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I don't repeat it.
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You go to iwmpodcast.com and listen to all of this, or download their app.
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It's all up to you.