News channel biz losing steam

New Delhi, Aug 1 | Updated: Aug 2 2005, 05:30am hrs
The business of news channels seems to be running out of steam as the growth in advertising revenue generated by top 10 news channels is petering out. While the industry grew 25% in 2003-04, it grew just over 15% in 2004-05 to Rs 500 crore. This fiscal, the growth is expected to be just 8-10% to take the industry to Rs 550 crore only.

The main reasons cited for the slow-down are fragmentation of viewership and distribution of advertising rupee between various news channels. This has reduced ad rates leading to the same rupee buying more airtime. For example auto companies have started advertising on Sahara Samay and Channel 7 as they see their niche target consumers watching these channels in hinterland. And because of this, Auto companies negotiate hard for their ad-rates with mainline news channels, sources said.

Another issue affecting the TV news business is fluctuating ad-rates on the basis of monthly viewership trends. Top three channels still go for long term deals with clients, but piece-meal deals continue to dominate TV news selling business, sources added. While the effective prime-time advertising rates for 10 seconds on Hindi news channels have stabilised to around Rs 2,500-Rs 2,700 for market leaders and about Rs 1,100-Rs 1,250 for the subsequent channels, the English news genre is the category which has yet to stabilise.

NDTV is charging Rs 8,000 per 10-seconds for its prime-time band since it is offers business channel NDTV Profit as part of the package too. These rates may come down once Times Now and TV18-Broadcast News Internationals English channel start from year end, industry sources said.