Chennai: Media and broadcast company Raj Television Network Ltd has delayed plans to launch 12 regional channels and buy a Tamil newspaper by another 12-18 months, as the company waits for the economy to revive to raise funds, two top executives said.
The Chennai-based broadcaster, which raised Rs52.81 crore in an initial public offering in February 2007, had proposed investing Rs150-200 crore for the launches, with part of the funds coming from private equity firms. These plans are now deferred because of the current market conditions, M. Raajhendran, managing director of Raj Television, said in a recent meeting.
Raj TV is already struggling with thin audience ratings in a crowded regional television market. According to TAM Media Research Pvt. Ltd, a viewership rating firm, the Kalanithi Maran-owned SunTV Network Ltd leads the Tamil general entertainment channel space with a 66% share of the market, as per data for the period between 5 April and 2 May. Raj TV stands a distant fifth, with a 3% share.
Among Tamil music channels, another channel from the SunTV stable leads the pack with a 50% share, while Raj Muzix comes fourth with a 4% share. Of the two Tamil movie channels, Sun’s KTV commands a 96% share, while Raj Digital Plus has the remaining viewership, TAM data shows.
Raj TV currently runs four television channels in Tamil and one each in Kannada and Telugu, primarily in the music, news and general entertainment categories. Of the proposed channels, for which the company already has licences, three would be in Malayalam and two each in Kannada and Telugu. It is yet to decide on the other five channels.
“Within a span of one-and-a-half years, the global markets will also be good and we will raise funds,” Raajhendran said. “We are going slow.”
Prakash Dharmarajan, Chennai president of advertising firm Ogilvy and Mather, said Raj TV cannot depend solely on new channels to improve its business. “It (Raj TV’s success in other states) would entirely depend on their programming content. Is it easy? It is not. At the end of the day, people watch programmes, not channels,” he said.
On the company’s print plans, promoter and whole-time director M. Ravindran said that though the company is in talks with a few people, a deal is not likely immediately. “We want to buy out some established print player, but it will take some time,” he said, without elaborating.
The broadcaster had told Mint in September that it was looking to raise Rs50-100 crore from private equity firms by divesting 5-10% stake in the company, to start a movie production business, build a new studio and office complex, and for other plans.
Raj TV has since released two of the four movies it has produced so far, investing Rs23 crore. They made profits of 10-15% on an average, Ravindran said, but declined details.
The studio and office complex, too, needs another year to be ready, he added.
Raj Television’s revenue in fiscal 2008-09 increased to Rs62.41 crore from Rs58.69 crore in the previous year, but fell way short of its targeted 40-50% revenue growth. Net profit for the year ended 31 March fell to Rs3.72 crore, from Rs13.46 crore earlier.