The ‘India versus Bharat’ debate isn’t new; there are two sets of people residing in the country with different economical, sociological and psychological preferences. Whether it is a consumer product or a media network, customising the offering is crucial for survival when addressing these varied mindsets. Star India, Zee Entertainment Enterprises Ltd (ZEEL) and Viacom18 have, over the past couple of years, strengthened their might in the regional space to not only increase their respective bouquets, but also give a fight to all-powerful regional-first networks.
The early ‘90s saw the emergence of Sun TV (Tamil), Raj Television (Telugu) and Asianet (Malayalam) which saw the rise of private television channels in South India. Similarly, throughout the ‘90s, along with a number of Hindi-language channels, several regional and English language channels flourished all over India.
But the recent past has witnessed an uproar in the television space as more and more networks have entered and expanded their business in numerous languages. For instance, in 2015, Viacom18 rebranded its regional general entertainment channels (GECs), acquired from ETV in five languages under the Colors umbrella, in order to better monetise from the entire bouquet of channels across platforms. ZEEL too invested as much as `115 crore to acquire Odia GEC Sarthak TV owned by Sarthak Entertainment. The acquisition and rebranding exercises come with the agenda of looking at capturing a share of the fast growing regional entertainment market.
According to KPMG-FICCI Indian Media and Entertainment industry report 2016, the media and entertainment (M&E) industry is set to grow at a CAGR of 14.3% to `2.26 crore by 2020. And though the regional entertainment genre is still a nascent vertical for the networks, given the regional diversity in language, culture and literature, there is an exponential growth potential of media consumption in local languages. This is reflected in the rapid proliferation and growing viewership of regional media. Increasing advertiser preference in regional media too justifies the consuming potential of the regional media audience.
What audiences want
The southern regional channels have always been very strong and dominant in their geographies due to the clear language preference. From a media perspective, India was always considered to cater to two key geographies — Hindi Speaking Markets (HSM) and the four southern states. Hindi channels were for a very long time the only ones catering to HSM markets. Among the regional channels, Tamil channels occupy the biggest share with 25.7% share in viewership and the Telugu market is the second largest with 24.4% viewership share, as per the KPMG-FICCI report.
However, over the years in the ‘traditional’ HSM markets, regional language channels have made significant inroads to today dominate or closely compete with Hindi channels. West Bengal and Maharashtra are key examples of this where today regional channels have a very large share of viewership. In fact, to reach audiences effectively in these markets, regional channels are a must-have in media plans. Other markets like Bihar, Punjab, Assam and Odisha also have a set of regional channels catering to these markets. However, they are still lower in viewership as compared to the Hindi channels in these markets. “Clearly from being ‘good to have’ today, large television networks have recognised that regional channels in their bouquet are a must-have especially in key HSM markets,” says Anand Chakravarthy, managing partner, Maxus India.
It won’t take a genius to figure out that similar to the Hindi genre, GECs are the leading genre in regional markets as well, with 29.6% viewership share followed by regional movies with 6.6% in 2015. The regional viewer is no different from any other and consumes a wide range of content across reality shows, family drama, mythology, crime, comedy, movie premieres and events.
The markets, though, have different dynamics and operate differently. Hence, while regional versions of popular shows work very well in the southern market given that there is limited consumption of Hindi GEC content, many avoid that in Marathi and Gujarati where there is a significant overlap with Hindi GEC content.
The networks are investing in research in order to give audiences what they want as each market is different. Says ZEEL’s chief business officer Sunil Buch, “Each market is different and we have to build our offering according to people’s preferences. Research does help us to refine our offering because there is no set formula in this industry.”
Due to increasing competition intensity, regional TV channels are now looking at investing in original content in addition to dubbed content which has increased their content costs. Original content productions cost anything between `75,000 to `1,50,000 per episode compared to dubbed content which only costs around `2,500 per episode.
Industry experts see the scale and quality of regional challenge offerings improving significantly over the years. Today the quality of production and content has improved to the extent that global TV formats like Big Brother (Bigg Boss), Who Wants to Be a Millionaire?, American Idol etc have been adopted by regional challenges very successfully. Another significant trend witnessed is that unlike Hindi GECs, regional channels are also extending their original content schedules across more day parts as well as across more days in the week.
An alternate revenue stream “By constantly pushing the content boundaries, upping the scale of production and production values and showcasing the best the world has to offer, the Colors regional channels shall continue to be top of mind and top of remote in regional markets,” claims Ravish Kumar, project head, Colors Kannada, Colors Bangla and Colors Odiya.
With content sorted, the channels in particular regions have been able to create a niche for themselves. According to BARC India (week 17-20), while local regional channels like Sun TV and Asianet continue to maintain their lead in their markets, network-owned channels like Star Jalsha, Zee Marathi, Zee Telugu, Colors Kannada and Sarthak TV have stayed ahead of the curve in their respective markets.
This in turn helps the network to not just sell regional channels as part of network deals to advertisers, but also set up their own separate sales and solutions teams to drive revenue of these channels, given the potential. In the case of some networks, their strong regional channels have become a lever when negotiating network deals with advertisers. So much so, that using their regional strength, networks try and get advertisers to put more investments into the other channels in their networks.
The logic is simple: brand building is always about emotional connect and the emotional connect is best established when in one’s own language. “Just like we as a channel see value in catering to the regional audiences with content curated especially for them in their language, advertisers also see significant value in engaging with regional audiences directly through targeted and customised campaigns in their mother tongue,” highlights Anuj Poddar, project head, Colors Marathi and Colors Gujarati.
Though much lower than charged by mainstream channels especially Hindi, rates on regional channels like all GECs also depend on the slot, leadership in the slot, premium content etc. All categories, whether automobile, FMCG, durables or jewellery brands, are coming forward and buying big ticket properties.
Having said that, regional markets are yet to see the full benefits of ad spends from e-commerce players and this may result in an uptick in advertising revenues for regional TV channels. The road ahead With consolidation/expansion in MSOs/LCOs and increasing penetration of DTH platforms, the regional channels are well distributed across the states. And now to up their ante, networks believe the next step is to launch HD feeds of their regional channels. Star India recently launched HD feeds of Star Jalsha and Star Vijay; not to be left behind, Colors expanded its HD bouquet by launching three channels (Colors Marathi HD, Colors Bangla HD and Colors Kannada HD). ZEEL too plans to launch the HD feed of its Marathi channel, Zee Marathi.
“Integration of digital, HD and great content will drive the next growth of the sector. Networks need to utilise social media to its optimal to create two-way communication,” says Buch.
National players have the benefit of size and scale unlike local regional channels. But the smaller channels should be wary of the networks’ invasion, says Grant Thornton India LLP partner Raja Lahiri. “With more competition coming in, one shouldn’t rule out consolidation in the space,” he muses.
Given the depth of TV penetration and the increasing opportunity of rural markets, regional channels must invest in marketing their product to deeper pockets of the geographies they operate in. According to the KPMG-FICCI report, the most intriguing fact shall be to watch how DAS IV areas respond to explosion of channels and content when digitisation rolls out completely in such sectors. These markets will suddenly have a plethora of channels to view with a regional mix as well — something that viewers in DAS IV have been devoid of.
Despite a smaller scale, regional channels take time to be built, and advertising revenue realisation takes time as well. Therefore networks need to take a long term perspective on having a play in this space and need to be willing to invest, in order to build a strong foothold in these markets.