Although his isn’t a new channel, Uday Shankar, who arrives at Star India Pvt. Ltd today (21 May) as chief operating officer (COO), has a job on his hands. After a year of falling viewership, the network is facing a crisis of personnel with its top men, Peter Mukerjea and Sameer Nair, quitting recently. With them, several other key people left the organization. A senior channel executive requesting anonymity said the new COO’s first challenge will be to stop the exodus, and the second, to check the decline in viewership.
A newsman, who was promoted from his position as chief executive officer (CEO) of Star News, run by Media Content & Communications Services (MCCS), a 74:26 joint venture between Ananda Bazar Patrika Group and Star Group, Shankar believes that the Indian broadcast industry is in its “early infancy”. This, in some sense, is true. Accounting and consulting firm PricewaterhouseCoopers forecasts that the television industry, which currently has Rs19,100 crore in revenues, will nearly triple in size by 2011. “We may be very happy that we have 65-70 million cable and satellite homes,” says Shankar, “but if you view it against the total population of the country, it’s very small.”
How many channels are too many? If every channel accessible in India was made available (according to broadcast laws, only those uplinked from India can be beamed), there would be more than a thousand to watch. Now, there are roughly 350 available, of which viewers see only half, and even that appears excessive. Regardless, that number is set to grow: 71 channels are awaiting the I&B ministry’s clearance.
Among them are lifestyle channels, whose promoters claim a significant audience for these categories. There are entertainment channels that plan to steer away from run of the mill soaps. Also, waiting for clearance is a news channel, INX News, that promises to be as extensive in its coverage as a newspaper. These channels will come into being even as audiences become more selective by the day.
The conditional access system (CAS) has arrived, and DTH and IPTV are already here. Broadcasters now have separate divisions set up to exploit 3G technology, which allows mobile users to access videos and full-length movies. “The new distribution is what makes the broadcast business today more exciting,” says Zarina Mehta, CEO, Bindass, Genex Pvt. Ltd.
Like Shankar, Mehta is not new to the industry. She and her husband, Ronnie Screwvala, have been associated with the media and entertainment industry for more than two decades. And, during this period, the duo produced television shows for various broadcasters, launched their own kids channel and then sold it off to Disney. All this while, Mehta largely remained behind the scenes.
But now, she is ready to launch the first of four youth channels, branded Bindass. And she has never been as excited about the industry as she is now. “If mobile, web, DTH and CAS were not there, I would not be getting into the space. I think we’ve picked the right time.” The channels will, to some extent, utilize user-generated content, a nod to YouTube and other video-sharing sites, besides adopting some other innovative concepts.
Mehta believes that there is scope for more channels and, more importantly, considering India’s mean age, there is space for younger channels. Even in a seemingly crowded market, entrepreneurs see gaps to plug.
Within a year, Mukerjea, the man who ran Star India for more than a decade, will be spearheading a dozen of his own channels. INX Media Pvt. Ltd, a company launched by his wife Indrani Mukerjea, will have entertainment channels, which will be led by Peter himself, a news channel, that will be headed by Vir Sanghvi, a well-known journalist and advisory editorial director of Hindustan Times. Hindustan Times is published by HT Media, which also publishes Mint.
UTV, meanwhile, is planning to launch some more entertainment and news channels. Shantonu Aditya, who till recently was with Sahara One, will be heading Olive, an international movie channel, and at least two more variety channels. NDTV Networks, another leading broadcast company, is also in the process of launching three lifestyle channels and two general entertainment channels.
Yet, there are persistent problems. According to broadcasters, subscriber numbers are routinely under-reported by cable operators and cable network owners. Enormous amounts—up to 40% of a broadcaster’s launch budget—are paid to CAS and DTH platform owners to ensure that the channels are carried on their platform and reach the viewers.
There is a cap on foreign ownership that Shankar blames for the low quality of television news coverage. So far, advertising has remained the main source of sustenance. But now, even that is coming under pressure. Advertisers are pushing for performance-based contracts. So, in an environment not too friendly for broadcast business, why start a channel? There is some justification for this in PwC’s annual report, which predicts that in the next five years, subscription revenues alone will grow more than 220% from Rs11,700 crore in 2006 to Rs37,800 crore in 2011.
Aditya says technology can solve some problems. Bandwidth issues are steadily being resolved, he says, as is the issue of under-reporting subscriber numbers. “In the CAS markets, pay subscription revenues for channels have doubled,” he says.
“Earlier, the broadcasters were getting only 10% of their declarations of the actual eyeballs. Now with 30% penetration of set-top boxes in homes, the share has doubled straightaway,” adds Aditya. He says the immediate concern is distribution, as most delivery systems are still analog-based and, therefore, lack space to carry hundreds of channels.
While CAS was partially implemented in Mumbai, Delhi and Kolkata, 90% of the country still runs on analog systems. The shift to digital is being stressed by broadcasters because the space required by each analog channel can accommodate about 9-10 digital channels.
Distribution is particularly important for smaller and niche channels, which often have to force their way into a viewer’s line of sight. Sanghvi, whose channel will be on air in the last quarter of 2007, says the channel has accounted for carriage fees—the commission paid by broadcasters to cable operators to ensure that they don’t blackout their channels—in its budget.
But, he says, a large part of his “viewership will be the kind that gets in on DTH platforms”. “As of now, the number of DTH viewers is not enough to sustain a channel, so we hope that will change,” he adds.
INX is also looking at other platforms (Incidentally, Mukerjea is under a no-compete agreement with Star and will take over the reins of INX’s entertainment channels in July, when the contract expires).
One issue that Sanghvi and all other channel heads, have to deal with is talent crunch. “The great names in news programming are names from the 1990s,” he says.
Shankar, of Star India, says, “The growth of the industry has completely outpaced the rate of human resource development. Channels are guilty of not nurturing talent. We just go out there and hire, there’s no unified thought process or foresight. The industry will take a leap only when there’s a leap in the quality of talent.”
Some channels are using a new approach. Zoom TV, the lifestyle channel by Bennett, Coleman and Co. Ltd, last year began broadcasting bite-sized programmes. Smeeta Chakravarti, CEO, NDTV Lifestyles Ltd, though, has a different strategy in her mind. She says her programmes will command a natural length. “Rather than a half-hour block, our shows will be about engaging the viewers,” she says. Her presenters, she says, will not be just pretty faces, but veterans in travel, cooking, or whatever issues they will be talking about.
Interestingly, all the new bosses say that content will still be important, but the new war for eyeballs will not be fought on the strength of content only. “That’s a given, in today’s competitive environment,” says Sanghvi.
Aggressive marketing will be a must for all the new and old players to survive in the game. Billboards across towns screaming about the latest saas-bahu serials already hint at that. UTV’s Mehta puts it succinctly: “The most important thing in the business today is brand positioning, second is distribution, third is marketing and fourth, content. Without these four, you are dead”.