BBC Worldwide, the commercial arm of BBC, has decided to shut its two channels in India. This will mark the closure of BBC Entertainment and CBeebies from 1 December and reflects the difficulties that niche channels have in growing their business in an analogue cable TV driven market.

In an interview with Indiantelevision.com's Ashwin Pinto, BBC Worldwide Channels, Asia senior VP, GM, Mark Whitehead explains why.

Excerpts:

BBC Entertainment was refreshed last year. What went wrong?
The nature of the Indian market for pay-TV channels make the economics of running channels very challenging at this time. We have reluctantly concluded that we need to close our channels.

Could you talk about the carriage costs that had to be incurred versus revenues that were earned?
India is the only market where we pay carriage fees for our channels. We can’t go into commercially sensitive detail on our revenues.

BBC Worldwide was talking to platforms like the One Alliance. Why did talks fall through?
We did not choose to comment on speculation at the time and I’m sure you will understand that we won’t be doing that now.

Was the decision to exit part of the overall cost re-structuring exercise that is going on?
This decision has nothing to do with the overall restructuring of BBC Worldwide. We took the difficult decision to close the channels for commercial reasons.

Some of the reasons included the uniquely challenging pay TV market in India and the delays to digitisation.

Didn't BBC Entertainment have an edge over competition as it covered three genres - entertainment, factual and lifestyle?
Both channels – BBC Entertainment and CBeebies – have been exceptionally well received by the Indian audience. However the uniquely challenging pay TV market in India made the economics of running them very difficult at this time.

CBeebies was ad free. Is running an ad free channel in India unviable at the moment?
Advertising is currently a major source of revenue for pay TV channels in India. Without that revenue we found it unviable to run CBeebies in India at this time.

Having said that isn't this the wrong time to exit given that the digitisation process has just started with Mumbai, Delhi already switching off analogue signals?
Digitisation has been slow and the long term impact on the economics of running a channel is unclear at this stage. If those economics improve with digitisation, we will reconsider launching the channels.

Is BBC Worldwide Channels looking more carefully at the cost structure across Asia and are you exiting other markets to an extent?
India is a uniquely challenging market and our commercial decision to withdraw the CBeebies and Entertainment was not part of an Asia-wide review. We have no plans to close channels in any other markets at this time.

There have been a lot of changes in the BBC such as a new DG and COO. How will this affect the functioning of the channels business?
The international Channels business is part of BBC Worldwide, the commercial arm of the BBC.

BBC Worldwide has a strong focus on international markets, and our channels business remains an important part of that strategy for growth. We have a clear leadership structure running the channels business with David Weiland as acting Managing Director of Channels and I (Whitehead) running the Asia business.

Is there the chance that BBC might re-enter India in 2015 when digitisation is complete?
We believe India is an exciting market and in the event of changes in the options available to us, we would certainly consider re-launching our non-News channels in the market.

BBC Worldwide remains committed to India, where BBC World News – the BBC’s international news and current affairs television channel – continues to be available across the market, along with the bbc.com and bbchindi.com websites, BBC Hindi radio and Global India, a new primetime programme produced by BBC Hindi TV which launched on five ETV channels this month.

In addition, BBC Worldwide operates a TV production business, a content syndication business and Lonely Planet in India. BBC Worldwide is also evaluating the potential for a number of digital initiatives which have been successfully developed in other markets. BBC Entertainment programmes will also continue to be available on other channels in India – both terrestrial and cable, as well as digitally on our YouTube channel.