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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.
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