By Anindita Sarkar
Even as critics argue that the Indian television landscape, already saturated with more than 600 channels, shows no scope for fresh players to walk in, the Hindi general entertainment channel (GEC) genre—one of the biggest contributors to the broadcasting pie—only chooses to tread the path of a devoured optimist.
On June 23, Zee Entertainment Enterprises (ZEEL) launched Zindagi, a Hindi GEC, to showcase select content handpicked from across the border. To begin with, the channel tied up with various producers from Pakistan to acquire licences for almost 4,000 hours of recent library content from that country.
During its launch, Punit Goenka, managing director and CEO, ZEEL, had said, “The launch of Zindagi is significant in many ways. It is a step forward to further expand the ZEEL network in India. This channel is a first in its category of GECs and will offer alternative fiction content suitable for Indian sensibilities and produced by content creators from around the world.” With Zindagi added to its already existing 32-channel bouquet in India, ZEEL’s strategy is not only to further fragment the `4,17,200-crore TV landscape and craft out a new niche, but also help push the around ` 4,500-crore GEC pie towards an expanded growth.
Now, even as Zindagi finds foot in the television-viewing audience, the market is already abuzz with new players jumping on to the GEC bandwagon. While Multi Screen Media (MSM) is launching a new GEC, Sony Pal, on September 1, ZEEL is working on its new Hindi GEC under the ‘&’ brand—planned for launch during the latter half of this year. For the record, in August last year, ZEEL had launched the movie channel, &pictures, under the & brand in an attempt to break away from Zee branding, a similar move that Star India made in 2011 when it launched the brand OK. ZEEL chief content and creative officer Bharat Kumar Ranga had then said the broadcaster would eventually build a network of channels under the banner in a bid to target mass television viewers. Interestingly, it’s the top networks that are ready to welcome and launch fresh GEC products in the space. Some say the idea is to create strong entry barriers for new aspirants to walk in. “When a strong network launches a channel, the costs can be absorbed, there is a long gestation period and cross-selling can happen too. For single and new players, the same launch could lead to a major loss,” says Mihir Shah, vice-president, Media Partners Asia. For the record, it takes anywhere upwards of `150 crore to launch a Hindi GEC in India.
As per industry pundits, digitisation of the analog system has given an opportunity to create content, which need not actually be at a high cost. Compared to the analog system, which, at best, could accommodate 80-100 channels with poor reception quality afflicting the channels at the fag end of the queue, in a digitally addressable system (DAS), not only does the bandwidth capacity jump to 500 channels, but the quality of reception for each of these channels is also equally good. The result? The desperation to grab a place on the prime band by paying more no longer exists, thus leading to a cut in carriage costs. As per a study conducted by Chrome, a media market research company, if the cost per contact (CPC) paid by a channel to reach out to its customer is Rs.20, digitisation brings that CPC down to one-fifth, or Rs.4.
“You have Star Plus, Zee and Colors with high-budget programming, but on the other side, you also have a SAB, Life OK and Zindagi with programming in mid-range,” says Pankaj Krishna, founder and CEO, Chrome Data Analytics & Media. “The analog era did not provide business logic for return on investment for a GEC, owing to huge distribution costs. The failure to have a big-ticket audience convertor led to channels shutting shop. Digitalisation gives the opportunity to cater to an audience at a considerably lesser distribution cost,” he says.
Now comes the second advantage. Indian broadcasters have for long been suffering from the perils of under-reporting of their subscriber base. It is argued that the local cable operator never reported the exact number of households accessing a channel, thus hurting a network’s total subscription revenue. Now, what digitisation does is that it gives the exact number of people who are actually subscribing to a channel. “So, when there is a reasonably accurate subscription number available, you also have a better way of negotiating the carriage fee,” says a top executive from a media agency.
It all ads up
With the advertising inventory capped at 12 minutes an hour on a channel, as per the Telecom Authority of India’s (Trai) order, there is the impeding danger of losing ad revenues. While many channels have upped their rates by as much as 20-40 per cent, this raise in all probability will not be able to cover the loss in ad volumes. As a result, networks are looking at launching new channels to make up for the lost revenues by providing additional inventory on the new channel as part of a package deal.
Says Jehil Thakkar, head, media and entertainment, KPMG, “The main GECs mostly attract monies for their established properties. Here, big brands are willing to pay high rates to earn prime-time exposure. Meanwhile, niche channels are generally used by the brands as frequency-building platforms. Now, the big players, which already have established relationships with advertisers, would not want to let them go to competitors. This is what is pushing them to launch channels within the network.”
Adds Ashesh Jani, partner, Deloitte Haskins & Sells, “The 12-minute cap affects the business planning and logistics, and has resulted in an increase in rates by production houses and broadcasters (on airtime). To make the broadcasting business more viable, the launch of new channels is a preferred alternative.” For the record, a 10-second spot during prime-time rates commands anywhere between Rs.2 and Rs.4 lakh on a top GEC for a non-fiction show, while the rates are between Rs.50,000 and Rs.1.7 lakh for fiction shows.
Meanwhile, analysts note that with the economy showing signs of growth, and television as a medium picking up as the prime source of entertainment in India, broadcasters are trying to cash in on the increased interest generated by viewers, particularly in the Hindi GEC space. Says Jani of Deloitte Haskins & Sells, “The demand for airtime (advertisements) exceeds the supply as of now. Also, Bollywood content is ‘hot cakes’, and with production houses producing increased ‘soap’ content, there is a long line-up to get ‘airborne’. The fallout of this will naturally result in new avenues (channels) to air the content.”
Adds Krishna of Chrome Data Analytics & Media, “Today’s GEC is woman-centric. Hence, it is yet to be established in the truest sense. With a houseful of reality shows and saas-bahu sagas, broadcasters are experimenting more, as there are many genres for Hindi GEC yet to be tapped—comedy, thriller, suspense, crime. We have a whole lot of youth (15- to 25-year-olds) who are English GEC viewers and this is a huge audience to be tapped by a Hindi GEC. There is still a huge gap in good content to cater to this audience.”
It should be noted here that a flagship Hindi GEC from a top network contributes anywhere between 25 per cent and 45 per cent to the total network revenues. As per industry estimates, Star India’s revenue stood at around Rs.4,000 crore for the year ended March 2013, while that of Zee Entertainment,Viacom18 and MSM was around Rs.2,600 crore, Rs.1,500 crore and Rs.1,000 crore, respectively.
Frankly, the challenge is not in launching a GEC, but in getting relevant eyeballs to watch the channel. Today, GEC content is targeting specific brackets of age and gender. These brackets form a universe for general entertainment in itself. For example, Life OK does not have women-centric programmes, Sony has CID, which gets children and male audience, MTV and Channel V are positioning themselves as youth GECs and Zindagi has an entirely different fiction programming from across the border. Therefore, though the slice looks overcrowded, there is still a lot of scope for relevant Hindi GECs.