CHENNAI: The lucrative southern market where Kalinidhi Maran's Sun is shining brightly is all set to see competition. Come 23 May Raj Network will launch a Telugu channel Visa TV.
The Rs 100 million Visa TV will be owned by an independent company, Visa Television Network. Visa TV will be the sixth player to enter the Telugu market. Besides Suns channels Gemini and Teja you have ETV, MAA and Doordharshan.
The launch of news channels is happening thick and fast and the south is no exception. Raj will also launch a 24-hours news channel and music channel.
Raj Television CEO Rajeev Nambiar has been quoted in a report saying, "All the three new channels will be free while our two existing channels Raj TV and Raj Digital Plus will go pay for Rs. 12".
Let's now scrutinise the financial aspects of the plans. Raj Television's MD M Raajhendhran has been quoted saying that they will involve a capex of Rs 420 million. The source of funds will come mainly out of internal accruals and some borrowings from the State Bank of India
Raj's revenue is Rs 400 million and Nambiar is clearly hoping for increases in both ad and subscription revenue with the two channels going pay. Of course CAS will weed out the filler channels and those too weak to stand on their own two feet. Therefore a big question mark hovers over the extent to which Raj is able to enhance subscription revenue in its home state. It is lagging behind the competition in terms of quality of transmission and programmes. Nambiar however maintains that transmission is a problem only in Tamil Nadu. "In other markets the picture clarity is quite good," he said. Nambiar is hopeful of clocking a turnover of Rs 1.2 billion this fiscal.
The Tamil channel ad market is worth Rs 3 billion. Sun and national broadcaster Doordarshan garnering nearly Rs 2 billion. This leaves Raj's two channels, Jaya TV, Star Vijay and Tamizhan TV fighting for the remaining Rs 1 billion.
On the distribution front Nambiar has been quoted as saying that the total declarations by the cable ops and multi-system operators (MSO) in Tamil Nadu are around 3.5 million and in Chennai it would be around 1.5 million. He maintains that the situation is healthy even if Raj gets one-third of the above numbers.