Channel war | Making sense of business news
8 min read 13 Jul 2009, 10:25 PM ISTChannel war | Making sense of business news
PremiumSerious contender: We think there is an opportunity here, says Chintamani Rao, chief executive officer, Times Global Broadcasting Corp. Harikrishna Katragadda / Mint
The battle for one of the smallest territories on the Indian television landscape seems to have taken a serious turn. The launch of ET Now, the English business news channel by Bennett, Coleman and Co. Ltd, or BCCL, the largest media company in the country, is causing more than a stir in a genre that has had a minuscule share in the total television viewership, as well as the advertising pie. English business news channels currently account for 0.2% of the total viewership and have a 2% share in the total television advertising revenue.
ET Now entered a space that was already a bit crowded with three players—CNBC TV18, NDTV Profit and UTVi. CNBC TV18 belongs to Television Eighteen India Ltd, or TV18, one of the most aggressive news broadcast companies in the country, while NDTV Profit is run by New Delhi Television Ltd, one of the oldest television news operators. Launched in 2008, UTVi, promoted by Ronnie Screwvala, managing director and founder CEO, UTV Software Communications Ltd, was the last entrant into the space before ET Now made its debut on 22 June. Besides these, there are two Hindi business news channels—Zee Business, owned by Essel Group-promoted Zee News Ltd, and CNBC Awaaz, run by TV18.
Six business news channels in a country where a very small percentage of the population reads financial dailies or dabbles in financial markets is, indeed, surprising. According to Invest India Economic Foundation Pvt. Ltd, a Gurgaon-based independent financial policy think tank, only 0.75% of the country’s total population trades in stocks of any kind. According to the latest Indian Readership Survey, readership of business publications in the country is only 0.85% of the total readership of all dailies.
In the US, the world’s largest economy, there are three 24-hour business news channels—CNBC (which has a content partnership with TV18 in India), owned and managed by NBC Universal Inc., the broadcasting arm of General Electric Co.; Fox Business Network, owned by Rupert Murdoch’s News Corp.; and Bloomberg TV, owned by Bloomberg Lp.
Hidden opportunity
“Yes, business channels have a small share. But we think there is an opportunity here," says Chintamani Rao, chief executive officer, Times Global Broadcasting Corp. Ltd, the BCCL arm that oversees its television business. “There is only one channel that is having the major share. And there lies the opportunity." (BCCL, the publisher of the largest read English daily in the country, The Times of India, and the business daily, The Economic Times, competes with HT Media Ltd, which publishes Hindustan Times and Mint.)
To be sure, the English business news space on television has been led by CNBC TV18 for around a decade. Launched in 1999, the channel had a monopoly in the space till NDTV Profit was launched in 2005. Even after the entry of a rival, the channel has enjoyed at least a 60% share in English business news viewership. According to television audience measurement and rating agency TAM Media Research Pvt. Ltd, the channel had a viewership share of 69% for May. The channel declined to comment for this story.
NDTV Profit, despite a strong parentage in NDTV, one of the earliest and successful news operators in the country, has not been able to dent CNBC TV18’s position. In May, the channel’s viewership share was 27%, while UTVi was a distant third at 4%.
Screwvala had argued in the same vein as Rao while launching UTVi a year ago. In a space where the market leader accounts for at least 50% share, there is definitely a need for a serious contender, he had said. So far, though, UTVi’s story has not been too inspiring.
ET Now’s confidence stems partly from the leadership position and brand strength of The Economic Times. The business daily, according to the first round of the Indian Readership Survey 2009, had an average issue readership, or AIR, of 783,000. Mint, which was launched in 2007, is at No. 2, with an AIR of 175,000, followed by others such as Business Standard, The Financial Express and The Hindu Business Line.
Rao says ET Now will leverage the strength of The Economic Times to compete with CNBC TV18. The news channel and the newspaper are already said to be operating at an integrated level, sharing their staff and other resources (CNBC-TV18 has a content partnership with Mint).
More of the same
Despite a strong partner in The Economic Times, most media experts say the channel will have to churn out differentiated content to take away viewership from other channels. Even its rivals will have to do the same to make sure their viewers don’t jump fences. “More choice is better for the viewer. But each network will have to find its own differentiator. If all four do more of the same, they will be crowding out the space," says Shivnath Thukral, managing editor, NDTV Profit.
The entry of new channels has expanded the market. In 2004, when there were only two business news channels—CNBC TV18 and Zee Business—the genre accounted for only 0.1% of the total television viewership. This expanded to 0.5% by 2008. Lynn de Souza, chairman and group CEO of media agency Lintas Media Group, points to the entry of Colors in the general entertainment channel, or GEC, category that not only ate into the share of competitors but also helped expand the overall pie.
According to viewership data analysed by Mumbai-based audience measurement firm Audience Measurement Analytics Ltd, ET Now was running neck and neck with UTVi in the first two weeks after its launch. The two channels had a 14.3% share each in the total business channel viewership pie, while NDTV Profit had 28.6%. By the third week, that is the week ended 9 July, the viewership share of ET Now had declined marginally to 12.5%. What is interesting to note is that in the week preceding ET Now’s launch, CNBC TV18 had a 50% share, which dropped to 42.8% in the subsequent two weeks. In the week ended 9 July, CNBC TV18 regained its 50% share. Data suggests that the impact is being felt more by NDTV Profit and UTVi.
“If the new channel is able to tap into the latent needs of the viewer, offer something additional, something different than other channels, then the overall pie grows. It all depends on how the channel is packaged and marketed," says de Souza. Punitha Arumugam, group head of communications company Madison Media Inc., an arm of Mumbai-based marketing communications group Madison Communications Pvt. Ltd, agrees with de Souza. “This is likely to be the case, unless the market gets overly cluttered. But I am not sure whether this would translate into a bigger advertising pie," she says.
Money matters
The total advertisement spending on business news channels, according to Madison Media’s estimates, is about Rs150-175 crore. The bulk of this goes to CNBC TV18. This is what ET Now seems to be eyeing. “There is one dominant market leader and no one has challenged it effectively," says Rao.
The television news business has been quite challenging for most operators so far. The situation got compounded recently because of the slowdown in the economy. In the year ended March, TV18 reported a net loss of Rs177.82 crore compared with a net profit of Rs6.02 crore a year before. NDTV Ltd recorded a net profit of Rs119.83 crore compared with a net loss of Rs185.65 crore, but this was mainly on account of a stake sale in one of its subsidiaries for Rs642.54 crore that helped in countering the loss of Rs520.02 crore.
Due to intense competition and limited viewership in comparison with other bigger genres such as general entertainment, films or sports, news channels are not able to command high advertising rates. A 10-second ad spot on a GEC could cost anywhere between Rs20,000 and Rs60,000 compared with English news channels that command between Rs3,000 and Rs3,200 for the same duration.
Though ad rates on business channels hover more or less around the same level as general news channels, the former are able to attract premium brands more easily, say media buyers. Along with corporate ads, business news channels have their own dedicated set of advertisers such as banks and financial institutions, insurance companies and brokerage firms.
ET Now, point out some media buyers, has an added advantage. The channel can tap into the extensive and robust advertiser base of The Economic Times. “It will be logical I guess at some point of time or other for them to bring (that) in. There are synergies and today this concept of integration is working," says Anita Nayyar, CEO, Media Planning Group, India and South Asia, a media buying firm.
To be sure, a similar effort by The Times of India and Times Now, the news channel from BCCL, did not work too well.
A strong distribution network is another issue that ET Now will have to ensure before it attempts to shake the market leader’s position. “Distribution is difficult because a large portion of it is analog cable which is semi-disorganized. So you have to negotiate market by market, city by city and player by player. And obviously, the question of carriage fee that tends to eat up a lot of resources," says Jehil Thakkar, head, media and entertainment practice, KPMG, a consultancy firm. Among the DTH operators, ET Now has been able to tie up with only Airtel DTH Service as of now.
Although most media experts see CNBC TV18 and ET Now as the two main contenders in the fight for eyeballs in the English business news space, smaller channels are not ready to give up the fight as yet. “Success in TV business is dependent on what you do onscreen. You may be backed by the biggest brand, but the battle has to be fought with content on the small screen," says Govindraj Ethiraj, editor-in-chief, UTVi.
“It’s a long-term game. We don’t believe in reaction. We have a proper strategy to go by the viewers’ expectations and not by the competition," adds Thukral.
rahul.s@livemint.com
