The year 2016 was noteworthy in media for several reasons. It was a year of consolidation through mergers and acquisitions in radio and television, investment in and expansion of over-the-top (OTT) video streaming services, rise in rural viewership and disruption via new technologies in the broadcasting space.
For starters, here’s a quick look at the technology that is set to change the face of broadcasting both in India and abroad. On 15 December, Emerald Media—the pan-Asian platform established by global investment firm KKR & Co. for investing in the media and entertainment sector—announced that the company was acquiring a significant minority stake in Amagi Media Labs, which works in the space of targeted television advertising and cloud-based TV broadcast infrastructure. Amagi has the technology which offers cloud-based broadcasting services that virtualize the whole broadcasting operation. Basically, today any content owner could create his/her own channel on the cloud-based platform and deliver it to any distribution network including on, say, Facebook Live. “Technically, anyone can be a broadcaster as the cost of cloud services is low. You don’t need hardware, a master control room or machines. Everything is routed through the cloud and the feed can be delivered anywhere," says Amagi co-founder Baskar Subramanian.
The other big theme for 2016 was the expansion of OTT by independent video-on-demand firms such as HOOQ, Spuul, YuppTV and NexGTv, as well as those owned by broadcasters like Zee, Sony, Star and Viacom which have platforms such as DittoTV, SonyLiv, Hotstar and VOOT respectively. While the beginning of the year (January 2016) was marked by the entry of video-on-demand service Netflix, the fag end of the year saw the entry of Amazon Prime Video. Rumoured to have been launched with the intention of investing a couple of thousand crore rupees in content and marketing, Amazon Prime Video disrupted the market with its pricing—a meagre Rs499 for a year’s subscription of on-demand, ad-free service compared to Netflix’s Rs500 for a month. The service comes with a bundle of exclusive newly released Indian and Hollywood films, American television shows and award-winning Amazon Original Series. Ashish Pherwani, partner, media and entertainment advisory services, EY LLP, says that 2016 stood out for the action in the digital OTT space. “The industry is trying to follow the consumption pattern of its audiences which is moving to digital. The 4G launch by different telecom operators also quickened the process," he says of the sector that grew in scale.
Consolidation in media was key during the year. In February, MAA Television Network Ltd was acquired by Star India Pvt Ltd, a unit of 21st Century Fox, for an estimated Rs2,000-2,500 crore. The acquisition of the Telugu network helped the company expand its presence in the movies and general entertainment genre in six Indian languages. Maa Television has four channels—Maa TV, Maa Music, Maa Movies and Maa Gold.
Another development in August-September saw Zee Entertainment Enterprises Ltd (ZEEL) announce the sale of its sports network TEN Sports to Sony Pictures Networks (SPN) in an all-cash deal worth $385 million. TEN Sports’ portfolio includes a clutch of channels that operate across India, the Maldives, Singapore, Hong Kong, Middle East and the Caribbean. The deal marked a strategic shift in Zee’s channel portfolio to focus on general entertainment.
To further strengthen its entertainment genre, Zee last month announced acquisition of the entire television business of Reliance Broadcast Network Ltd (RBNL) including two operational channels and four TV licences. Anil Ambani’s Reliance group also agreed to sell a 49% stake in its radio business to Zee group entities, marking the latter’s entry into radio. The transactions are expected to be completed by next year. RBNL’s network of FM radio stations operates under the 92.7 Big FM brand and reaches 45 cities. “Essentially, these mergers and acquisitions meant that media firms went for efficiency and scale," says Pherwani.
Consolidation was the buzz word even in the direct-to-home (DTH) sector which saw Dish TV, an Essel group company, acquire a stake in Videocon Industries Ltd’s DTH firm Videocon d2h. Videocon, owned by the Dhoot brothers, will now have a 44.6% stake in the entity, while billionaire Subhash Chandra’s Essel group will hold a 55.4% stake. The new entity will be renamed Dish TV Videocon Ltd. Before the merger, India had six private DTH firms—Dish TV India Ltd, Videocon d2h, Reliance BIG TV Ltd, Tata Sky Ltd, Sun Direct TV Pvt. Ltd and Bharti Telemedia Ltd. State-owned broadcaster Doordarshan also runs a DTH platform for free-to-air channels called DD Free Dish.
India’s premier TV ratings agency, Broadcast Audience Research Council, or Barc India, too played an important role in broadcasting in 2016. Although the agency started covering TV viewership in rural India in October 2015, its actual impact was seen in 2016—with several pay TV channels turning free-to-air (FTA) and the FTA channels of general entertainment broadcasters seeing their ratings soar.
Broadcasters’ flanking channels like Rishtey, Zee Anmol, Sony Pal and Star Utsav did well in rural markets. This finding was the result of measuring rural India’s TV viewing habits that had been unexplored so far. The TV-owning universe doubled with the inclusion of rural, which meant that more individuals consuming content on TV were now being measured and represented. “This led to broadcasters and advertisers come up with content with focus on rural India. The fact that viewership trends showed “Early to rise and Early to bed" phenomena in rural India, we did see an early prime time which began at 5.30pm being introduced," says Partho Dasgupta, chief executive of Barc India.
Barc has bigger and better plans for 2017. But more on that in the New Year.
Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.