TV News Channels Heading For Shakeout

New Delhi: | Updated: Nov 10 2003, 05:30am hrs
How many television news channels can coexist in the country We asked this question earlier when private news channels were launched in quick succession, creating a sense of intense competition in the television world. Now, with DD News (from public broadcaster Prasar Bharatis stable) joining the race and another couple of private players intending to launch sometime soon, the question has surfaced again.

Although there are no clear answers as to who will survive and who wont in the news market, experts indicate that theres room for a maximum of four Hindi news channels. This means that a shakeout is imminent. As for English news channels, only two are expected to survive, and a business channel perhaps. Even as three to four news channels are a norm internationally, India is a unique and more fragmented market, where regional news channels also compete for space, says the marketing head of a private broadcasting company. Currently, we have six national Hindi news channels, including DD News which is predominantly a Hindi channel. Another Hindi news channel is likely to be launched soon. Plus, we have three Indian English news channels (including a business channel), along with which we have BBC and CNN.

Media planners, who feel the pulse of the market before others, have a definite take on the issue. According to Universal McCann president Chintamani Rao, around three to four Hindi news channels, and about two to three Indian English channels are realistic in the longer run. Mr Rao also predicts a new development for the news broadcasting industryniche segmentation in line with the American market. Result: We may soon have another focused business channel and maybe a dedicated sports news channel.

Mindshare India managing director Ashutosh Srivastava, however, says that theres always room for more channels. He asks, why are there so many newspapers adding, so many newspapers are surviving, but not all of them are making profit. News channels would follow the same pattern. The agenda of many news channels, like several newspapers, is not to make a quick buck, but for strategic reasons and considerations, he adds.

Since news channels are currently free-to-air (there are no subscription fees for them), advertising revenue garnered by them is the only indicator for their commercial success.

A recent industry survey puts the share of news channels at 12 per cent of the total advertising pie. As per 2002 figures, the estimated size of the total advertisement revenue for the TV industry is around Rs 2,000 crore and that would give news channels roughly Rs 250 crore. The total television broadcasting industry revenues (advertising and subscription) are estimated at around Rs 5,714 crore.

According to a KPMG-Ficci report, the Indian television industry revenue break-up in 2002 was 54 per cent from subscriptions, advertisements bringing in 35 per cent, and other income 11 per cent (including production deals and providing uplinking facility and content to other channels).

A senior official of a private news channel, who did not want to be named, clearly said that only those in the core business of news would be the ultimate winners among news channels. By core business of news, he meant broadcasters with only news channels in their bouquet such as NDTV and TV Today. According to him, other broadcasters who have a bouquet of channels including entertainment, movies and sports, besides news, attach less business significance to their news channels. For instance, Zee News is estimated to contribute about 5 to 6 per cent to the total revenues of the broadcaster, and Star News around 4 per cent to the group business. Both, Star and Zee did not reply to detailed questionnaires on their news business. However, channels with deep pockets are expected to survive.

Even as new distribution technologies such as conditional access system (CAS) and direct-to-home (DTH) are expected to impact the broadcasting business a great deal, growth in advertising revenues of news channels is a given. A recent research published by a media company showed that from 1998 to 2000, advertising revenues of news channels grew 27.6 per cent, and 2000 to 2002 100 per cent, and from 2002 to 2003 80 per cent.

As for growth, news channels provide the best return on investment (RoI) amongst the various TV genres, say experts. Media planners and advertisers find news channels to be an extremely viable and apt media to reach out to their target audiences, according to an official with a private news channel. Therefore, we even find advertisements exclusive to English and Hindi news channels.

Another significant finding is that news channels attract more advertising revenue as compared to its share of viewership. Reason: They provide a more focused audience to advertisers, and thus better return on investment. But, says Mr Rao that growth of news channels will be in sync with the TV broadcasting industry, and not faster than that.

And even if theres a market shake-up, the consensus is that competition will improve the content and presentation of news across channels.