"International business is growth area for players with long-term plans"

"International business is growth area for players with long-term plans"

Zeel ED - International Business Bharat Ranga

(22 February 2012)

The global slowdown in 2011 has made it clear for Indian broadcasters to have a long term strategy, exploit new media, study local content consumption patterns and have a pricing that is reasonable rather than getting engaged in a race to the bottom.

Indian broadcasters have similar growth opportunities in the international market as they have in India, though the challenges are of different nature.

Historically, large parts of international business for Indian broadcasters are dependent on subscription revenues and long term contracts. Having secured these long term contracts, Indian broadcasters generally do little to grow their shares.

Subscription business, unlike advertising business worldwide, is not measured on transparent measurement parameter. Hence B2B deals are conducted on the basis of gut, perception or portfolio leverages. Most of these tend to be highly uncertain and unpredictable. The lack of effective measurement also leads to gut-based theories of local programming or additional programming inputs.

Another key element in building a sound foundation is to invest in brand building and, hence, create an emotional connect.

The triggers and hooks for content consumption need not be same for the audience based out of India or in some remote corner of the world. Unless Indian broadcasters draw a long term plan in strategy for international business, they would never get a pulse of overseas South Asian consumers.

Economic slowdowns in various markets make the scenario more complex for broadcasters in wooing consumers and for consumers in selecting content offerings at right price/value. It will also be important for the Indian broadcasters to use new media avenues optimally.

Given the fact that Internet and OTT models are getting used more as tools for piracy and cheap distribution, it can pose serious threat to the distribution revenues. If used well especially in markets with higher broadband penetration, new medium can work best to get incremental subscribers and eyeballs including the younger audience and next generation Indians in those markets.

Distributors are facing bigger challenges in mainstream content or local subscriber growth as well as local content costs. In most markets, essentially in West, there is a proliferation of South Asian content in the past four years, most of which are not growing the pie because of poor content quality and incorrect business models.

Distributors are left with no choice but to apply their judgments on how to manage international/ethnic category of business. Distributors are desperately looking forward to good partners who can participate in the business growth in a given cluttered and economically challenged environment.

In order to crack growth, broadcasters need to pay closer attention to the purchasing power of South Asian households being superior to local households in most international markets. However, consumers would expect right content on right platform at right price with least diversions of piracy, cheaper new media platform, FTA or compelling Asians based content on mainstream channels.

Rationalisation of content offerings on traditional media and consolidation of content offerings are key levers to expand the market.

Advertising business is suffering before growing, as majority of players, including big ones, do not respect the value of their inventory, and the quality of their audiences. South Asian subscribers are of various generations and have varied interests including mainstream content. However, they are loyal to home grown content for connect and nostalgia apart from entertainment in their desi style.

There is a component of audience base which is born there and does not have emotional connect with India. The composition of these set of audiences is changing rapidly and a good judgment can help broadcasters define their content strategy appropriately.

The scenario in local audience market offers unique challenges. There are content hungry markets which find eastern culture and values appealing, but those businesses need to be treated in the same fashion as the mainstream business in India in order to make a definitive dent in those markets rather than looking at them as incremental syndication revenues. These markets require tenacious focus, long drawn plans and tremendous hard work.

International business is well poised for growth but only for serious and long term players who are willing to invest and reap the benefit over a long period of time than in ATM solutions.

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