The lack of adequate measurement of SEC A! That is seen among media buyers as a big stumbling block for ad revenue growth in the niche English entertainment genre. This article analyses how media buyers view the genre (movies, infotainment and general entertainment) and the possibilities for more growth

At the outset it is worth noting that the ad pie for the English entertainment genre is around Rs 2.2 billion. This represents a five to seven per cent growth from last year. Overall, growth is expected to be around eight per cent in the coming couple of years. If however Tam does introduce the elite panel these channels might see a growth of as high as 25-30 per cent.

What will drive these numbers? According to OMS regional director Madan Mohapatra one will then be able to see more numbers among SEC A. It will thus make it easier to justify ad spends to clients who might be skeptical. Also, one will be able to slice and dice SEC A itself in different cities. Right now viewership for this genre comes mainly from Mumbai, Bangalore and Delhi. The TG mostly is C&S SEC A,B 15+.

In the overall media plan, the niche English channels get into it to build incremental reach. Also, the affinity that a channel has with a TG that a channel has is also looked at.

Media planner Rahul Panchal adds that the elite panel will see consolidation happening in the market. This means that not all channels will see a similar increase. Those channels that are able to show better numbers will be in a better negotiating position. Revenue will shift from one channel to its competitor. Now though, everything is a matter of perception. There is a clear segmentation of genre among the media community. This means that a Star Movies will not compete with a Zee Café. This situation will not change.

How the different channels are perceived: HBO and Star Movies are more or less on an even keel. The English film genre takes out around 50 per cent of the earlier mentioned Rs 2.2 billion pie. Depending on previous experience a client's view will favour one or the other.

The reason why English movie channels fare better is that they are seen to be more mass compared to the infotainment and English general entertainment genres. They also offer better reach. One advantage that Star Movies and HBO have is that there are not many choices in this genre. Zee Studio is still confronting distribution issues while Pix, which recently commenced airing, has not gone to the media market as yet with this new offering. In fact planners feel that Pix should mature a bit before it can consider itself a serious player. Therefore there is less price elasticity happening in the English film genre.

Properties like The Lord Of The Rings have helped boost HBO's library

In terms of spot rates, on a comparison scale if English film channels charge Rs 100 for 10 seconds then general entertainment and infotainment charge Rs 50-60. As had been reported earlier by Indiantelevision.com, HBO has hiked its rates by 25 per cent.

Information available with Indiantelevision.com indicates that this was possible because HBO's ad rates were much lower than Star Movies. When HBO moved to Turner last year the existing contracts that clients had thanks to deals negotiated by the One Alliance were cancelled. When deals were renegotiated sometime in June 2005 rates were reduced by seven to eight per cent. So the increase that HBO is now looking for is effectively around 16 per cent compared to what it was when it was with the One Alliance. Post the increase, HBO's effect rate per 10 seconds will stand at around Rs 85, still lower though than Star Movies price of Rs 100.

The Oscars are high impact property for Star Movies

As already pointed out, HBO and Star Movies are at an advantage here due to there not being many choices available. Of course, it is also true that English movie channels also need to charge more as their acquisition costs are higher and they have operated on a higher bargaining level for a longer period of time, opine industry observers.

Star Movies' cause has been helped by high profile properties like the Oscar Awards. HBO, industry observers though note, has improved the quality of its library.

For the third player Zee Studio, the biggest hurdle continues to lie in its distribution. This does not mean that cable operators are not carrying it. It is just that the band placement is poor and so too by extension the reception. The number of viewers, therefore, who are able to sample its properties like a few foreign films that one normally catches at film festivals are fewer. Not surprinsgly its rates are around 45 per cent less than what Star Movies charges.

The English general entertainment segment takes out around 30 per cent of the Rs 2.2 billion ad pie. Star World is still seen as having a more upmarket image compared to Zee Café. Its rates are also around 30 per cent more. Panchal though was appreciative of Zee Café's efforts like its new look and feel which was done to make it appear more youthful. The fact though is that Star World is at an advantage because it, of the three channels (including AXN), has done the most to improve the variety of content it offers.

Shows like Desperate Housewives make Star World attractive for advertisers targetting women

This means that there will always be a trial audience for new shows which offers good visibility for advertisers. Star World is also unique in that of all the channels in the niche English entertainment space it is the only channel besides Zoom which is seen as having a few shows that will mainly appeal to women.

A case in point is Desperate Housewives. Of course that is not say that women do not tune in to the other English channels as well. It is just that if you look at the programming skew it is slightly more towards men points out Panchal. So advertisers on the niche English channels usually target the male first.

Local shows like Simply Style have Zee Cafe differentiate itself

While Zee Café's local initiatives work both as a differentiator and a revenue generator Panchal feels that the channel needs to bear in mind the cost factor. Local shows help build a stronger identity for any channel. Of course, it is easier for Zee TV to do local stuff as its revenues are that much more. Both Zee Café and Star World are used in some measure to target the upwardly mobile youth. So its TG would mainly be 15-45. For AXN though, the perception is that men 25+ comprise its main audience. Here the reality shows like Fear Factor are perceived as being a strong draw.

On the infotainment front, while Discovery was at one time much ahead, that gap has come down to some extent as NGC did a lot of things. Its Think Again repositioning last year helped in this regard. Discovery's rates though are still higher to go with their better viewership. It also started selling Animal Planet separately from last year.

TV films like Hitler are key in history Channel's repositioning

One channel that has improved perception wise is The History Channel. Observers note that previously it was a touch monotonous. However in April it shifted its positioning to being an entertainment channel. Products like Hitler, Nero mean that it can show quality films, series while sticking to its basic positioning of history. The opinion is that in the near future it could go ahead of NGC in terms of the cost of spot rates. In the near future it can also position itself as an alternative to the likes of Star World for ad revenue. October should be a good period to see the progress made since the revamp.

Not much fluctuation: Planners feel that the English entertainment channels are not as badly affected by events like cricket to the extent that mass channels are. That gives them confidence to put money on them even during October - November 2006 when the ICC tourney is on. If a person wants to see an English film he will more likely do so compared to a Hindi soap when the Indian cricket side is playing.

Another trend in this genre is that while the share of the English genre in the overall landscape has gone down, their ad revenue has gone up. Clients like Nokia have stayed loyal.

MythBusters on Discovery. The channel has managed to keep itself in front of archrival NGC

It may be that a client will shift from one channel to another. However, the number of clients available for English channels will never go down. Clients are also encouraged by the fact that appointment viewing generally is increasing. However, there is still room for improvement in this area.

In terms of the yield per unit, the infotainment channels fare worse than movie and English general entertainment, say observers. Be that as it may, the quality of the audience is the USP of niche english entertainment channels. A Star Plus may give reach but quite a few of those viewers might not be relevant for example to an advertiser selling an expensive PDA phone. On the niche English entertainment genre there is a certain amount of passion involved and around 80 per cent of those viewers are likely to buy high end products. There is therefore a high amount of relevance translating into a good quality rating point.

The more expensive a product is, the more likely a client will be to choose a niche English channel. Also, the fact is that while these channels may not contribute much revenue to the network kitty, they help augment the mother brand. They help the broadcaster offer a complete solution to clients, which is why Sony launched Pix after HBO moved to Turner.

A stronger focus: Media buyers also feel that the niche English channel sellers are more evolved and mature. There is a better focus on how their property fits in with a client's needs. This is imperative as these channels are selling an intangible space. They also do not have the ratings.

So a certain amount of street smartness is key, especially when one considers the fact that clients and channels have opposite goals. The channel wants to get as much revenue as possible while the buyer wants the best (though not always the cheapest) price. The infotainment channels are clearly at a disadvantage in terms of revenue potential. There are six of them (three from the Discovery stable, two from Nat Geo and Zoom) fighting for 20 per cent of the Rs 2.2 billion pie.

Revenues the channels will get going forward rest on four factors - how seriously they take their content, how well they time the launch of new shows and initiatives to get the most impact (it is not just a matter of quantity), how competitive the rates being offered are and how well they are promoted at both a client and consumer level.

If a channel is not perceived to be as good as its competition then it needs to offer more customised packages. A case in point is what Zee Café did with Asian Paints on the sitcom Friends. A Friends makeover was done to emphasise the fact that red is the colour of love and friendship. Since Star World is perceived to be better in the market it does not have to go that extra mile if it chooses not to.

It is also worth pointing out that a niche channel focusses more on chasing those clients who spend a lot of money on this genre rather than merely trying to increase the number of clients. That is because if the number of clients increase beyond a certain point they run the risk of spreading themselves too thin. So while a Sony will have around 230 clients, a niche channel will have far fewer clients, often by choice.

At the end of the day skill and the level of negotiation are what count. Therefore, the head of the ad sales team is a crucial pivot. His/her attitude and strategy dictates to a large degree the performance and how successful a channel is in meeting targets. Zee Café and Zee Studio have benefitted from recently getting a separate sales team. Panchal notes that the need for sales people with strong persuasion skills is why there is so much poaching happening.

Buying for the English channels is a mix of round on daypart (RODP) and key properties. However, most of them insist on a client not just paying a premium for a key property but also on increasing their outlay on the channel. Competition for ad revenue among niche English channels, Mohapatra notes, is at both a genre level and a channel level. However, usually the client first chooses the genre and then looks at the channel.

There are times though when channels from different segments reflect the same values. For instance, AXN has a good duplication with the infotainment audience as it is aspirational. So now if a brand does not have Discovery or NGC in its plan then AXN can add value by giving incremental reach. On the other hand, if one advertises on Star World it does not necessarily mean that one can ignore AXN as the TG is different though they are in the same genre.

Conclusion: In the months to come, this genre will see competition growing more fierce. It will get a boost should Tam introduce an Elite Panel. At the same time, better strategising both on air and on ground will be key.