Regional TV gets competitive

Written by Sudipta Datta | S Saroj Kumar | Updated: Jul 4 2012, 06:57am hrs
STAR has just revamped its Bengali general entertainment channel, Star Jalsha, with a new logo and two new shows. Sony, which has started to invest in Maa TV to enter the lucrative Telugu market, will enter at least three new key regional markets in the next two-three years. Zee is leveraging its international operations with the help of strong regional brands in Marathi, Bengali and Telugu.

With TV penetration pegged at 60% of total Indian households, the R32,900-crore TV industry is expected to grow in double digits for the next five years, say industry experts and analysts. With the general entertainment category fiercely competitive, growth is coming from other spaces, especially regional television. While Zee and Star both have decent presence in the regional category with well-entrenched channels like Zee Marathi, Zee Bangla and Star Jalsha, the acquisition of Eenadu TV by TV18 (with Reliance Industries help) will also expand the regional footprint in a big way.

Man Jit Singh, CEO, Multi Screen Media, says Sony is scouting for acquisitions or may even develop regional channels from scratch and branch out to at least three language markets. Sony is present in the Bengali and Telugu space. We started to invest in Maa TV in Andhra Pradesh. Its our first southern market foray and a very important market. It has the second largest cable and satellite penetration in the country, he points out. Singh says he is excited about its Bengali movies channel, Sony Aath, which is cashing in on the Bengali film industry turnaround. The Bengali films market is the fastest growing regional film market now. Forty Bengali films were released in the past four years. We are happy to be already present in that market, says Singh.

Kevin Vaz, president, ad sales, Star India, and general manager, Star Jalsha, says the network should get some credit for helping the regional market grow. Earlier, regional channels were treated like step-brothers. But in 2008 when we came out with a product that looked good and with storylines that could compete with any other general entertainment channel, it clicked with the audience. We introduced new genres like stand-up comedy and helped grow the market. Before Star Jalsha launched, Zee and ETV had 250 GRPs, now Star Jalsha alone has 500 GRPs. Regional television is growing at 20-25% annually, says Vaz. This is faster than the industry growth of 12-15% year-on-year.

Regional channels account for approximately 33% of the all-India cable and satellite television viewership, with Bengali, Marathi and all the south Indian channels gaining viewership, says Jehil Thakkar, head, media and entertainment, KPMG. After Hindi GECs, in fact, regional channels have the largest viewership, and broadcasters are interested in increasing their regional footprint.

Strong ad sales encourage regional TV growth

One of the most important reasons for the growth of regional TV is the growth of regional advertising markets, say analysts. Regional advertising markets have grown at a higher rate than the national market, registering a growth of 15-30% in 2011. They appear to have been more insulated from the current economic slowdown than national channels, to some extent driven by local business segments such as jewellery in Kerala and textiles in Tamil Nadu, points out Thakkar. He adds that 2008 was the tipping point. When advertising didnt suffer so much in the regional market, thats when networks began looking at building a regional presence. You cant be a national player if you are only in the Hindi-speaking market. It was a wake-up call for the industry and while there were some green-field projects (Star Jalsha, for example), there were acquisitions too. Networks like Zee or UTV were rewarded for extending traditional brands into regional space; Zee Cinema in Marathi, UTV Movies in Telugu and so forth.

Says Singh: The regional ad market is the fastest growing market as the top advertisers dig deeper and deeper into the hinterland. Tier-II and tier-III cities are generating huge income, even during a global meltdown, these towns have their own local ecosystem, which is much more stable. Smaller markets are steady in their demand and that is why there is great interest in expanding the market. Agrees Thakkar: Advertiser interest in regional markets is rising. For example, Andhra Pradesh is viewed as a test market by several companies and the Maharashtra market is seen as a priority market by several advertisers, so it makes sense for a network to be present in both these markets.

Vaz points out that retail markets in the regions are doing well and FMCG, education, real estate companies are all advertising in smaller towns and cities. The top advertisers of 2011, from Hindustan Unilever, Reckitt Benckiser to ITC and Cadbury, Coca-Cola, all dug deeper into the hinterland.

Tamil market dominates, but a few blips

Analysts say the Tamil market dominates the regional markets in terms of advertisement spends, followed by Bangla and other southern markets. Sun TV Network, the biggest player in the south, launched three new pay channels in the first half of 2012, Sun Life, Sun TV Rest of India in Tamil and Gemini Life in Telugu. It has also launched four advertisement-free action movie channels in Tamil, Telugu, Kannada and Malayalam during the same period.

With a bouquet of 32 channels, which includes 12 in Tamil, nine in Telugu, seven in Kannada and four channels in Malayalam, Sun reaches 95 million households in India. Sun got a total ad revenue of R970 crore in 2010-11, which dipped to R945 crore in 2011-12. Group CFO SL Narayanan has predicted a bleak outlook on ad revenues, maintaining a single digit growth rate for the 2013 fiscal.

Overseas growth, targeting diaspora

Yet, theres hope for regional TV growth from another arenaoverseas operations. Players like Zee and Sun TV are leveraging their strong regional positioning to boost overseas operations. Zee has a significant subscription revenue by targeting the diaspora. Regional programmes become key drivers for overseas collections, says Thakkar. In 2011-12, Zee launched two of its regional channels, Zee Marathi and Zee Kannada, in the US. Tapping the overseas market on other distribution platforms, other than the DTH arm, SUN TV network has tied up with the third-largest pay TV player, Dish network LLC, to launch four new channelsAdithya TV, Gemini Comedy, Kiran TV and Sun Musicin the US market in April.

Dish dominates the south Indian market in the US and we are thrilled to have the opportunity to bring more of our content to even a wider audience. This would allow the company to further expand its reach in the international markets and enhance subscription revenues, says K Vijaya Kumar, CEO of Sun Network.

The television market in south India is expected to grow around R19,810 crore by 2015 from R10,630 crore in 2011, says a FICCI-Deloitte report. Television commands 57% of the R18,740- crore media and entertainment business and is poised to jump to R32,140 crore by 2015. The Tamil and Telugu languages have a major share in the south Indian market, garnering 70% of the market space.

Non-GECs also seeing regional expansion

Thakkar says non-GEC players are also showing a keen interest in regional markets. Several national players across infotainment, movies, and music and kids genres expanded their footprint into the regional markets in 2011. For example, Discovery spun off Discovery Tamil into a separate channel altogether, while Fox Traveller launched a 24-hour Bangla feed and Viacom launched its new childrens channel Sonic with a multi-lingual feed.