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Going native

The expanding reach of Star,Zee and Sony in the regional channel space is reshaping viewership trends and boosting ad revenues

Written by Pritha Mitra Dasgupta |
April 23, 2010 2:26:43 pm

The expanding reach of Star,Zee and Sony in the regional channel space is reshaping viewership trends and boosting ad revenues
Are you feeling nostalgic about your home town? Been missing the regional flavour,the sights and sounds of all that you call home? Or can’t seem to identify with all that’s dished out in the name of mainstream entertainment on TV? Well,just switch on to your favourite regional general entertainment TV channel to bring alive that old,familiar world.

A quiet revolution has been taking place in the regional general entertainment channel (GEC) space in the last few years. Even as all eyes were focused on the battle for the numer one slot in the Hindi GEC space,the regional GEC space has been witness to the entry of deep-pocketed broadcasters,all speaking in myriad tongues. So whether it is a Bhojpuri movie or a bhangra from Punjab or a Bengali coffee house adda that you want,it’s right there on TV right now. And it’s not just the regional Doordarshan channels with their standard fare,but aggressive private channels offering a slew of sleek,sophisticated shows that at times have been copied by reigning Hindi GECs.

In just about a year,the number of regional channels has gone up from 114 in 2008 to 135 in 2009. In comparison,only three new Hindi GECs were added during the same period. And despite the economic slowdown,advertising revenues grew by 29 per cent in 2009 against 21 per cent in 2006.
This rise in share of regional advertising has been mainly at the expense of public broadcaster Doordarshan’s regional channels which used to be the preferred medium for advertisers looking at reaching out to regional audiences and Hindi GECs to some extent.

Explains Rajesh Jain,executive director and head (M&E practice),KPMG,“If you look at India,the first phase of growth happened in Hindi. And I would like to point out a simple data which people often forget. The combined GRP (gross rating point) of Hindi channels is close to about 1300-1400 depending on which month you take. And just Tamil Nadu alone has a GRP of 3000.”
Jain says that over 50-60 per cent of the ad spend was happening in metros for a long period of time. And these were seen as the dominant cluster. “Now if you look at the advertisers,every sector,especially FMG,real estate,auto,is looking to increase its reach and footprint. So because of this,our prediction is that tier 2 towns will be as big as tier 1 towns in the next ten years. If those consumers are sitting in those pockets,advertisers will tap every available medium to reach them. So that’s the driver behind the growth of the regional channels.”

The six key languages in the regional GEC space are Malayalam,Tamil,Telugu,Kannada,Bengali and Marathi. And the market for these regional language channels extends beyond the borders of their home states. And these markets have been growing at a much faster rate compared to the overall television market in India.
While the southern market comprising the four southern languages has been dominated by Sun TV network whose topline growth is nearly 35 per cent annually,in other regional markets,the national-level broadcasters such as Star TV Network,Zee TV and Ramoji Group -promoted ETV Network have been particularly active.

Star TV Network which owns Hindi GECs such as Star Plus and Star One has been present in the regional channel space through Star Vijay in Tamil Nadu where it has been operating for nearly a decade. But the network never expanded its offerings until 2005—when it launched Bengali news channel Star Ananda.
Following that,in 2008 it launched two channels—Star Jalsha,a Bengali GEC and Star Pravah,a Marathi channel.

Says Jagdish Kumar,president,South India,Star India,“We are guilty of not looking at the southern market earlier. We should have been in that market earlier. But it’s better late than never. We started off as an English service and in 2000 we added the Hindi service. We were exploring various opportunities to go to the regional market. Firstly,our target was to establish Star Plus as a strong Hindi service.”

In January 2009,Star Network bought four Asianet channels—Asianet and Asianet Plus in Kerala,Suvarna in Karnataka and Sitara in Andhra Pradesh. For rival Zee TV Network,the entry into the regional channel space happened much earlier in 1999 with Zee Marathi and Zee Bangla. It entered the southern market in 2005 with Zee Telugu and Zee Kannada and finally launched Zee Talkies,a Marathi movie channel in 2007. At the same time,its ETC Punjabi channel has a stronghold in the Punjabi market. Says Atul Das,head,corporate strategy,planning and business development,Zee Entertainment Enterprises Ltd (ZEEL),“In Bangla and Marathi markets we started as a leader. But in the southern region we came from behind and now the idea is to consolidate our position in these markets.” And finally after its decade long presence in India,Multi Screen Media (MSM) has forayed into the regional channel space. Last year,Sony Pictures Television International (SPTI),which operates MSM in India acquired Channel 8,a Bengali film channel based in Kolkata.

Meanwhile,ETV Network has extended its bouquet of regional channels to include channels such as ETV Oriya,ETV Urdu,ETV Uttar Pradesh,ETV Rajasthan,ETV Bihar and ETV Madhya Pradesh.

Although the entry into the regional space has been gradual,regional GECs have always been an important segment in terms of viewership potential. In 2008,when American media mogul Rupert Murdoch,founder,chairman and managing director of News Corp that owns Star TV Network in India announced an investment of $100 million in the regional channel space in India,it stirred a discussion regarding the potential in this space.

The regional channels represent a growing opportunity in terms of revenues and the programme ratings indicate that they are well-received by audiences. In the four southern markets comprising Tamil Nadu,Andhra Pradesh,Karnataka and Kerala,regional GECs captures almost 50 per cent of the viewership. At the same time,the year gone by has not been good for both Hindi and English news channels and both have steadily lost channel share. This loss has been compensated to an extent by the growth in regional new channels which garnered a 3.4 per cent share of all-India viewership in 2009 against 4.4 per cent in the previous year.

One of the challenges faced by the genre was the lack of differentiation of content across channels. According to audience measurement company TAM Media Research’s TV trends 2009 report,English and Hindi news saw the share of talk and chat-based shows rising from 7-9 per cent and 17-18 per cent viewership respectively. At the same time,the general elections held in 2009 ensured a steep increase in viewership for news channels across languages.

For regional GEC channels,international distribution is also an alternate source of revenue. The non-resident Indian (NRI) population in markets such as the US,UK,Middle East and South East Asia are attractive pay-markets for leading regional GEC channels. For example,the average revenue per user (ARPU) in the US for instance can exceed $10 per month per channel.

Increased activity in the regional sphere has pushed up the cost of operation for regional GECs over the last two years,but it is still much lower than that of their Hindi counterparts. Talent and production costs for many regional channels are still significantly lower than for Hindi GEC channels as are the cost of film rights. Further,with carriage and placement fee being limited in many regional markets,overall distribution cost for these channels has remained within control. Lower operating costs,as well as the opportunity to earn attractive revenues from international markets,has meant that regional GEC channels can achieve break even more quickly than Hindi GEC channels.

A comparison of popular channels in the Hindi GEC,regional GEC and the news genre indicate the cost per rating point (CPRPs) of the news channels in the same range as Hindi GECs. Ad rates of regional channels vary from market to market depending on factors like competitive intensity,level of maturity of the market,pricing strategy of the leader. In general,the rates are lower than the Rs 1-1.5 lakh per 10-second for big ticket shows that Hindi GECs charges . As regional channels cater to specific markets,they have a better chance of helping local brands, thus offering an attractive proposition for both network broadcasters and smaller firms. The core target audience here is females 25+ age group (SEC ABC).

Broadcasters are constantly working on making their regional channel businesses profitable. For example,Star in Bengal has been constantly tapping those advertisers who have never explored television as a medium. Similarly,programming wise,the channel started with 2-3 key daily soaps.
Most interestingly,the network has now launched a Hindi version of one of its Bengali shows. Based on Bou Katha Kou which has been a runway success on Star Jalsha,the channel has recently launched a new show called Sasural Genda Phool on Star Plus. The regional flavour is certainly going national.

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