So, whats happening in the TV industry Jehil Thakkar of KPMG, says, Some consolidation is going on in network groups as players across the entire chain put strategies in place to take advantage of digitisation. He points out that the churn is happening as the business model of everyone, from broadcasters to DTH players, is changing.
As digitisation becomes a reality, we will be able to start segmenting the audience more and offer them what they want to watch, says Manjit Singh, CEO, Multi Screen Media, which has launched two channels over the past few months, Sony MIX and Sony SIX. With digitisation there will be a reduction in carriage fees and no capacity constraints. This will help us launch more channels in various genres, he adds.
But will that mean even the general entertainment space, the largest revenue earner for TV, the most rooted but filled with a handful fourfiercely competitive players, will be shaken up Some of it is already happening, with Star choosing to launch Life OK, which would compete for eyeballs with Star Plus. Ajit Thakur, channel head and GM, Life OK, which was launched recently, says though it is early to talk about numbers, it is heartening to have got the response we got. Thakur attributes the success of the channel to its content. Every single show is based on a philosophy, a social message, and it appears to have touched a chord, he adds.
Thakur predicts more consolidation ahead. Any new entrant has to have a big idea to succeed. The established players will consolidate further and offer differentiated content across different genres to draw people, he points out. If you arent different, you will die.
The Hindi GEC market needs a lot of investment, we dont see a great number of players coming into this segment, says Singh. But, he points out, There is ample space for more niche content. This is the reason why, perhaps, Star launched Life OK, an extension of Star Plus with a social message in the content, and Movies OK, despite the intensely competitive space.
Says Hemal Jhaveri, head, Movies OK: The new channel is different from Star Gold. This is a channel where the whole family can watch movies together. They just need to get the popcorn. For the past two years, Star has been collecting a library and will use that to its advantage. We have 1,200 films in our library now, which will give us the room to differentiate the content we offer on both our movie channels. The acquisition of the Viacom 18 library last year has also helped. We are going to do some unique things on the channel, like, for example, premiering seven new films over seven days. The seven-day-seven-premiere hasnt been done by any channel, he adds. The Hindi movie genre is the third most-watched segment (12 %) in the TV space, according to a Ficci-KPMG report, after regional channels (33.4%) and Hindi GECs (27.4%).
Ask Singh why Sony decided to launch a music channel and he says that the broadcaster noticed there was a market gap despite the presence of so many channels. Every channel was more or less playing the more recent Bollywood songs. But on our channel we play music to suit different moods. The feedback is good. Singh also justifies the launch of the sports channel by saying that though cricket dominates sportSony lost out to Star in buying cricket telecast rights for the next several yearsthe youth are looking for more diverse sport like badminton or some fast-paced sport. Even in cricket they seem to be liking the T-20 format more than the tests and we have a great property in IPL, he adds.
What is happening is that the players are realising that they need to build a national footprint and they cant do that by just being present in the Hindi general entertainment category, says Thakkar. Over the past 15-18 monthsand this will increase over the next two yearsbroadcasters will try to build a presence in several regional languages and also dabble in several genres, say analysts. This will offer a national proposition to investors and advertisers, adds Thakkar.
Sonys Singh says broadcasters are hoping that digitisation happens correctly. We dont get subscription revenues as we should. We are far too dependent on advertisers. If the digitisation process is on track, if the governments order is enforced properly, if piracy is tackled, the entire television industry will have better revenues, he adds. Thakkar feels that once digitisation becomes a reality, subscription will become a greater piece of the revenue pie. Pure subscription channels could be a possibility, he adds.
Analysts and industry insiders say the next 12 months will continue to see consolidation in the television industry. We may not see mergers and acquisitions, says Thakkar, but we are likely to see certain players exiting, networks launching new genre channels. We are also likely to see a consolidation in the distribution space and price battles between cable and DTH players.
So, if everyone is expanding its national footprint, why did Rupert Murdoch-promoted Star Group exit from the news business in India and end its JV with the Kolkata-based ABP Group that ran three news channels, Star News in Hindi, Star Ananda in Bengali and Star Majha in Marathi Star seems to have exited from the news business because the foreign partner didnt see any benefits from being present in the sector. Its unlikely that FDI limits will be raised and a foreign player will question why am I here says Thakkar.
When it pulled out, Star had said in a statement, Given the current regulatory environment and structural issues ailing the Indian cable and satellite television market and the news genre in particular, Star took this extremely difficult decision to withdraw its brand from the genre. Star India said it wanted to re-focus and re-energise the core strength of its business, general entertainment channels.