With potential for advertising revenues in regional markets still looking good, broadcasters are either adding to their bouquets or trying to break in here.
With potential for advertising revenues in regional markets still looking good, broadcasters are either adding to their bouquets or trying to break in here. At Rs 5,300-6,000 crore, regional advertising spends on television in 2017, grew at about 10% over those in 2016. That compares with around Rs 5,800-6,400 crore of revenues that flowed into the Hindi GEC space in 2017. Most broadcasters, such as Zee Entertainment Enterprises (ZEEL), already have a strong regional presence but an additional channel or two can’t hurt, especially at a time when Hindi GECs are suffering due to many free-to-air channels. Ashish Sehgal, COO, Zee Unimedia, points out that when a national level player like a Star or a Zee, Viacom18 with Colors enters a market, it is able to create more ad inventory. “Since broadcasters provide superior content, relative to that offered by local channels, advertisers are happy to spend,” Sehgal said. The four Southern markets — Tamil, Telugu, Kannada and Malayalam —have always been lucrative as have the Marathi and Bengali markets. Now Sony Pictures is gearing up to launch a Marathi GEC while Zee Entertainment, a veteran in many markets, is readying to roll out a Malayalam GEC. Meanwhile, Viacom18 will launch a Tamil GEC.
Jehil Thakkar, partner, Deloitte, observes that with the success of Free Dish, broadcasters are changing their business model. “The focus is to increase the existing advertising inventory by launching channels that are more cost-effective. Compared to a national channel, in this case a Hindi GEC, the cost to run a regional channel is smaller,” Thakkar said. Harsha Joshi, former EVP-group trading, Dentsu Aegis Network India, says broadcasters are playing a volume game by adding more channels to their kitty. “Also, broadcasters can now accommodate more national brands on local channels and earn better revenues in the process,” Joshi explained. Currently, about 50% of the ad inventory of a regional GEC is sold to local advertisers and the remaining to national brands. While a ten-second ad spot on a Hindi GEC during prime-time is priced at around Rs 80,000-1 lakh, on a Hindi FTA channel it would cost between Rs 20,000-30,000. On a regional channel, the same slot would fetch Rs 20,000-Rs 30,000.
To take on the stiff competition, Viacom18, which is foraying into Tamil Nadu, plans nearly 22 hours of original content. Ravish Kumar, head, regional entertainment, Viacom18, says while there are three big players in the arena many shows are either dubbed or recycled. The cost of producing a 24 minute-episode of a fiction show, for a Hindi GEC, ranges between Rs 5-6 crore. Compared to this, a 24-minute episode of a similar show on regional GECs such as Tamil, Telugu, Kannada, Malayalam, Marathi and Bengali ranges between Rs 80-90 lakh. Industry observers say that there is some slowdown in ad revenues to the Hindi GEC segment — in 2017 for instance, revenues grew 9-10% against an estimated 11-12%. Some of the revenues are understood to have been diverted to FTA channels on DD Free-dish. By rolling out multiple regional channels broadcasters are hoping to boost their advertising inventory.
Media planners believe the Hindi GECs market may have plateaued since most broadcasters already run more than two channels. However, there could be a room for growth in regional markets. Star India’s flagship Hindi GEC is Star Plus while its second channel is Star Bharat. The ZEEL stable hosts Zee TV as the main Hindi GEC and &TV as the second. Broadcasters say they would follow the regular strategy of creating a mix of fiction and non-fiction shows. “The new channel will have a few marquee programmes to help in capture viewers’ attention right from the day of launch. In terms of TV ratings, there is a big difference between the number 1 and number 2 player in the Marathi segement. With our content we are aiming to grab the middle position, said Rohit Gupta, president, network sales and international business, Sony Pictures Networks.
As per data released by TV audience measurement body, BARC, in week five between January 27 to February 2, 2018, Zee Marathi led the charts by clocking 285703 (000) impressions, as Colors Marathi grabbed the second position by registering 136758 (000) impressions. Sony, which has a Bengali GEC, is planning to enter the Marathi GEC space.