Home / Companies / RBNL to launch two television channels

New Delhi/Mumbai: Bertelsmann AG, Europe’s biggest media company, and billionaire Anil Ambani-led Reliance Group will start two television channels in India, including a round-the-clock reality show channel by September.

Luxembourg-based RTL Group, a unit of Germany’s Bertelsmann, last month formed an equal joint venture (JV) with Reliance Broadcast Network Ltd (RBNL) to start English channels in India, the German company’s first entry into Asia as a broadcaster.

The reality show channel will air unscripted content generated by RTL Group’s production arm FremantleMedia Ltd, which has produced shows such as Indian Idol and India’s Got Talent, said Tarun Katial, chief executive, RBNL. The second channel will target young, urban Indian male viewers and focus on action-oriented content, Katial said.

Bertelsmann and RBNL will have to compete with media groups including Sony Corp., Viacom Inc., Time Warner Inc. and Fox Broadcasting Co. while seeking to grab urban viewers’ attention in a market that is expected to grow at an average annual rate of 14% through 2015 to reach 1.3 trillion, according to a KPMG report, prepared for industry lobbyist Federation of Indian Chambers of Commerce and Industry (Ficci).

“Rapid growth of the middle and higher-middle class, increase in disposable incomes were reasons why international players in the broadcasting industry looked at entering the Indian entertainment industry more seriously," said Jyostna Viriyala, vice-president, Fox International Channels, India. The overall viewership from homes with satellite television for channels with foreign content is more than 40%, she said.

Last month, AETN18 Media Pvt. Ltd, a 51:49 equity venture between Network18 Pvt. Ltd and US-based A&E Television Networks Llc (AETN), received clearances from the government to start two channels—History Channel and Biography Channel.

Fox Channels India Pvt. Ltd, which already operates Fox Crime and FX (Fox), has also got government clearance to start two more channels, Nat Geo Adventure and Nat Geo Wild.

“It’s profitable for these foreign entities to monetize on their existing content by collaborating with local Indian players," said Timmy S. Kandhari, head of media and entertainment at the consultancy PricewaterhouseCoopers. To be sure, the market is still too small and foreign players may just be testing waters, he said.

RBNL already broadcasts a few channels, including CBS Prime and CBS Love, through its joint venture with CBS Broadcasting Inc.

JVs with foreign players help Indian partners as they have to spend less and take fewer risks, said Katial.

“International players bring with them expertise, knowledge and an excellent content library," Katial said. “As many viewers in India seek international content, it’s clear that a void exists in the entertainment that’s offered to them. There’s potential for growth and partnerships with international giants allows for expertise in programming to be combined with local strengths."

Most of these partnerships, however, explore the infotainment or “factual entertainment" genre. The growth in the number of digital households is accelerating the growth of the genres further, said Ajay Chacko, president, AETN18 Media.

The number of homes with satellite television connections is 38 million, according to TAM Media Research. The average time spent on infotainment programmes in satellite television homes is 13%, compared with 10% in cable TV homes, a TAM study showed.

It also helps that the infotaintment genre, despite being negligible in India, was growing at 60-70% per annum, according to Chacko. Though Chacko refused to share details on the two channels being started by the company, he said digitization and addressability, targeted content for select audiences, and the emergence of the infotainment genre in India was a sign for foreign entities to enter the Indian market.

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