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Associated Broadcasting Company Pvt Ltd (TV9) CEO Ravi Prakash believes there
is great potential in the regional language news space, especially in Telugu where
several players are bidding to enter. Small advertisers are spending Rs 500-800
million annually on news channels in Andhra Pradesh, making it attractive for
players. For
broadcasters, Andhra Pradesh is sizzling. The competition among broadcasters is
hotting up with several regional news channels set to go on air in the forthcoming
months.
At least half a dozen more news channels are expected to make
a debut this year. Rising viewership and fat revenues from advertising for existing
channels provide the impetus.
The potential of the southern markets is
huge. Buoyed by the success of the Hindi news channels, the broadcasters in the
South also feel that the regional news genre could be expanded. Telugu being the
second-largest spoken language in India after Hindi – the market is ripe
for broadcasters. Last
year over a dozen players came ahead with strategic plans to launch 24 hours Telugu
news channels. With recession hitting hard, around six to seven prospective players
decided to rethink and rework on their strategies.
None could launch
the much publicised channels last year. Only two new regional news channels could
go on air - that too with test signals while others are still feeling their way
around.
While distribution and channel placement plays a major role
for a new channel – manpower is also the prime concern. With there being
a positive outlook in the market, journalists had the time of their lives especially
as far as pay packages were concerned. TV9 in Andhra Pradesh went on to hike salaries
from 150-300 per cent to retain staff as most of the channels were looking at
luring away TV9's trained and experienced strength.
Andhra Pradesh is
the only state where regional news channels have a nearly 10 per cent share of
total TV viewership. All other regional news channels, including single players,
do not have more than four per cent share in any of the states.
TV9 has
its presence in six states out of which only AP has seen buzz for new channels.
In Bengal, only one channel came to existence in 2008. Similar was the case in
Maharashtra while no other state had big players in the game.
Last year
few existing channels focused a lot on brand value. To ensure greater brand recall,
channels are investing in redoing their logos, which are designed to be in sync
with their brand message. They are also getting into a number of above-the-line
and below-the-line branding activities.
Mushrooming of regional news
channels would be witnessed in 2009 solely because of space in the market apart
from some players generating political benefits from it.
People are now
focusing hard on the south because regional language news, caters to about 50
per cent of television viewers in 40 per cent of cable TV households, making it
lucrative for advertisers.
According to industry estimates, local advertisers
spend Rs Rs 500-800 million on Telugu news channels in Andhra Pradesh.
TV news is also the right place for advertisers compared to entertainment channels
as educated males who can afford automobile, credit cards etc are ardent viewers
of news channels over entertainment. This is one of the reasons why big advertisers
are looking more towards news channels.
All eyes are set on the growing
advertising pie for news channels. Apart from growing viewership, another reason
why news channels have attracted advertisers is because of the low cost, thus
enabling advertisers to increase the frequency of their ads.
The low
cost of spots on news channels also provides the opportunity for the smaller advertiser
to shift their spends to TV and on regional TV. There has been some shift of advertising
away from local print media and local cable channels to news channels.
This
trend is likely to continue, as more players will make the category grow.
The business of news channels continues to grow at 8-10 per cent annually.
The growth has helped small and medium advertisers.
This year the heartening
fact for the news broadcasters would be that the quantum of news telecast and
the consequent news viewing is expected to present a classical case of economics,
wherein increased supply could be matched by a rise in demand. With an increase
in the number of news channels, the time spent on news viewing is expected to
increase.
But the question is whether the market is big enough to support
so many news channels. It will all finally boil down to content - whether the
content is good enough for one to garner viewership. It's quite similar to print
media. There are over 500 publications in the country, however, only a few have
a large readership. Like in print, only top two performers are comfortably placed
while for others its fight for survival.
The coming years will definitely
witness the mushrooming of a spate of news channels. But the big question is whether
all of them would be able to garner enough revenues to sustain themselves. Won't
distribution become a challenge?
This will be a period of consolidation
wherein all the news channels will go through a reality check in terms of their
business model. Any industry that has seen exponential growth is bound to go through
a phase of consolidation. Consolidation is on cards in regional TV news. It has
been delayed only due to economic meltdown.
It would be important to find
out how the new channels would break through the clutter and survive the tough
competition.
A shakeout thus seems imminent. Like in every category,
there will be a few leaders capturing the bulk of the revenue pie, while the rest
will have to survive on what's left over. The category is likely to get even more
competitive as the increasing number of news channel jostle for the highest number
of eyeballs and advertiser attention. | 
