Aaj Tak looks to go pay way in future

MUMBAI: TV Today Network (TVTN), the parent of Aaj Tak and Headlines Today, is considering going pay. The operative point however, is that the sibling news channels are looking at a two-year time frame within which that is to happen.



Addressing a press conference in Mumbai on Tuesday, chairman Aroon Purie said that the company was also seriously considering the 'non entertainment' category and plans to launch niche channels in an addressable scenario.

"We are convinced we can be a market leader in the non entertainment sector - a strong player with a bouquet of channels - two to four years from now. We can achieve this by doing the same things we did with our magazine," Purie claimed, referring to Living Media Group's India Today.

Elaborating on the model, CEO G Krishnan said, subscription revenue would eventually be around 30 per cent of the total revenues for the channels in the long run. He maintained that the shift to a pay model could happen only if conditional access gets off to a smooth start in the country.

Purie said, the implementation of CAS and the opening of direct-to-home systems in the country would pave way for the channels to go pay, and eventually for declarations to improve, so that broadcasters are able to pinpoint who is watching their channels.

As for the channels that TVTN aims to launch - and are currently at the 'drawing board' stage - "it would be critical for them to have a subscription-based model", Purie said, adding that,"such channels can be launched only when such income is ensured."

The company, which is opening its IPO on 18 December, is looking at raising between Rs 1,300 million and Rs 1,500 million from the market, by offloading 14.5 million shares and issuing 10 million fresh shares that will constitute 25 per cent of the total equity.

Post-IPO, the holding of parent company Living Media in TV Today would go down to 55.7 per cent. TVTN has announced a price band of Rs 80 to Rs 95 through a 100 per cent book building process.

Up to 50 per cent of the issue is being allocated to qualified institutional buyers on a discretionary basis, and 25 per cent each to non-institutional investors and retail investors on a proportionate basis.

Merchant bankers JM Morgan Stanley are the lead managers for the IPO. Purie said, after TVTN, the company may consider taking the IPO route for Thomson Press, another subsidiary.

Sounding upbeat about the evolving media scenario in the country, Purie said he saw the number of cable connected homes going up to 65 million from 45 million homes. With technology moving towards digitisation, it had become more cost-effective to start a channel and to be viable with relatively lesser capital, Purie pointed out.

Stressing on the growing importance of the 'non entertainment' category, Purie said that a wide array of genres were possible - thematic channels that could focus on business, travel, health and fitness or special interest channels for women; language specific channels that would allow for tie ups with local partners, and also allow channels to create their own network; and geographically distinct channels that could tap retail or even classified advertising. Purie emphasised that in a few years, he would like to be known as a 'bouquet of channels'.

Painting a rosy picture for news channels, Krishnan said that 54.7 per cent of current news viewership in the country came from the SEC A and B, while 51 per cent of viewers watching news for one minute also stay on for 15 minutes.

The advertising base for news channels too has increased from 500 in 2000 to nearly 4000 today. Of the news channel pie, Aaj Tak, Krishnan claimed, has the largest slice, with 28 out of the top 30 programmes during the recently concluded elections week being on Aaj Tak. With a viewership share of nearly 30 per cent among Hindi news channels, Aaj Tak currently has a 23 million household reach, and an average of 32 minutes is spent by a viewer per day on Aaj Tak.

The capital raised by the IPO would go towards strengthening the infrastructure base for the existing 24 bureaus as well as adding new ones, officials said. TVTN, which has been totally debt-free from July 2003, managed revenues of Rs 1,085 million in FY 2003, having started with revenues of Rs 118 million in FY 2001.

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