indian television industry

GOURAB KUNDU THE INDIAN TELEVISION INDUSTRY PAGE 2

Contents 1. The Hawk’s Eye……………………………………….3

An introduction to the Indian Television

Industry

2. And the Winner is?...........................4

A status report on the milestones

achieved so far

3. So we have a Problem!......................6

Unanticipated issues that the Indian

Television Industry has faced/ might face

4. The Way to Tread……………………………………7

The proposed plan ahead for the Indian

Television Industry

5. Zip-up………………………………………………………8

Summarization of the present and future

status

Information Sources.……………………………………9


One in every two

households in India

owns a television

set, when, three

out of every four

Indian earns less

than twenty rupees

a day.

Technological

advances have

propelled Indian

television to

heights unheard of.

One in every two households in India owns a television

set. This figure is staggering considering the fact that three

out of every four Indian earns less than twenty rupees a day.

Astounding! There is more… from just one channel being

telecast in India during the 1980‟s, today the figure has risen

exponentially to over three hundred and fifty satellite

channels, and many such channels are awaiting the approval

of the Ministry of Information and broadcasting, Government

of India. [6]

With umpteen channels and the ever rising audience base,

the television industry is „in‟ big time. Television

transcends demographic, geographic, cultural and social

barriers with absolute finesse. It has become perhaps the

best mode to unify the diversity in India. Channels are

specifically designed targeting certain segments of the

Indian population. With such a huge population to play with,

the industry „walas’ are laughing all the way to the banks.

Could you have ever imagined that a channel would be aired

on television just to help you shop on the move? Well, these

channels have become banal these days. And if industry

insiders are to believed, this is just the beginning, the Indian

Television Industry has many such offerings. India has been

segmented according to various factors (demographic,

geographic, psychographic, etc) and every segment has

unique offering being made by one or more channels. Niche

television may be a novel concept but it is there to stay!

They say innovation is the name of the game. Technological

advances have propelled Indian television to heights unheard

of. The inflow of foreign investments and the entry of

private players have not only upped the ante in terms of

competition but also made the advancement of the

technical knowhow of television lucid. Gone are the days of

monopoly of “Doordarshan”, the Government owned

television channel. The private channels with much better

technological advances are slowly catching up with the “big

daddy”.

If estimates are to be believed, by 2013 all homes in India

will have access to cable television. So the viewers can

anticipate better quality at even better prices. [4]

1. The Hawk’s Eye


The quantum of

advertisements on

Indian television

has increased by

23% during Jan-Jul

2009

According to FICCI

and KPMG, the

television industry,

which is currently

valued at about

US$ 4.63 billion

will expand by

14.5 per cent

between 2009 and

2013.

As it is the price of viewing television in India is lesser than

that in most parts of the world. [6] The fact that 40 per cent

households of India are still without television connectivity

highlights the scope of growth in the segment. The number

of potential viewers of television set to increase in the

coming years, thus, the price of watching TV will only be on

the downslide. The penetration of television in rural India

also helps in increasing this scope.

The upside of television being so “user savvy” is the huge

influx of advertisements that are aired on television from

time to time. As per the recent Adex India data, the

quantum of advertisements on Indian television has increased

by 23% during Jan-Jun 2009 when compared to the same

period last year. The Food and beverage sector is the largest

advertiser, while Hindustan Unilever Limited has aired the

largest number of advertisements for its various products.

Adex also reveals that during the same period, the “Social

Advertisements” category has flooded TV sets for the largest

period of time. Hence, television is perhaps the most potent

forum to air social messages.

Television in India is operated using the following players:

Terrestrial Network

Cable Network

DTH (Direct to Home) Satellite Network

IPTV (Internet Protocol Television)

Mobile Television

Digital distribution platforms such as direct-to-home (DTH)

and Mobile TV are transforming the industry. Mobile TV—

where content will stream in on mobile phones—which is

currently at a nascent stage is poised to grow big with the

advent of 3G, according to experts.

According to the study by FICCI and KPMG, the television

industry, which is currently valued at about US$ 4.63 billion

will expand by 14.5 per cent between 2009 and 2013.

The revenue drivers for the Television Industry are:

Subscription revenues are projected to be the key growth

driver for the Indian television industry over the next five

2. And the Winner is?


Viewership across

various segments is

increasing and

marketers are

launching new

channels to meet

this growing

demand.

IRS 2009 Jan-Jun

shows a decline in

viewership of the

national network

DD1, while

viewership of

every other

private channel

has shown a

positive growth.

years. Subscription revenues will increase both from the

number of pay TV homes as well as increased subscription

rates. The buoyancy of the Indian economy will drive the

homes, both in rural and urban areas to buy televisions and

subscribe for the pay services. New distribution platforms like

DTH and IPTV will only increase the subscriber base and push

up the subscription revenues.

Revenue accrued from advertisements will also have a

substantial bearing on the growth of Indian television.

Viewership across various segments is increasing and marketers

are launching new channels to meet this growing demand.

Foreign direct investment (FDI) into the sector surged to $211

million (Rs 854.55 crore), against $89.18 million in 2006. [7] The

industry experts foresee FDI continuing to go up in the coming

years. The year 2007-08 was marked by the entry of media and

entertainment conglomerates—Viacom Inc., NBC Universal Inc.

and Walt Disney Co.—into India through partnerships with

Network 18 Group, NDTV Networks Plc. and UTV Software

Communications Ltd, respectively. Turner and Warner Bros

Entertainment, Hollywood's leading studio have launched WB, a

new Warner-branded channel in India that will showcase

blockbuster motion pictures and acclaimed television series.

The General Entertainment Channels (Hindi) have shown a

sharp increase in number from three in 2004 to ten this year.

Colors, a GEC launched by Viacom 18, have catapulted all

expectations to become the number one GEC in India within

nine months of its inception. To quote Ashwini Yardi,

Programming Head, Colors, “Content is the King, our content

was the only factor in making Colors the number one channel

in India.” The competition for the GEC Hindi is real intense

with a three way fight between Colors (Viacom 18), Star Plus

(Star India) and Zee TV (Zee Telefilms).

The television viewership data of IRS 2009 Jan-Jun shows a

decline in viewership of the national network DD1, while

viewership of every other private channel has shown a positive

growth. As per the data, the viewership of DD1 went down by

4.81 per cent, as compared to IRS 2008 Jul-Dec at 167.89

million viewers. However the national network stood way

ahead of the next in line channels. [9]


Often, extreme

violence, skin show

and licentious

conduct aired

blithely on

television go

unreported due to

no defined

Censorship laws.

The Government

had to mellow its

implementation

plan for CAS on the

account of

constant

resistance.

Whilst it is all fine to shower accolades on the „star‟ product that

television is, there is no denial that a lot of un-catered to ends

need to be tightened.

At the forefront is the issue of „censorship‟. Even after such a lot

of technological advancement in television, the governing bodies

could still not come up with a clear cut protocol to impose

censorship on content that is aired on Indian television. While

most Indian broadcasters (including the private broadcasters who

uplink from the outside) do adhere to indigenously developed

codes of programming conduct, there is a singular lack of a

governing body that could monitor programming, check lapses and

report erring broadcasters. In the absence of such filters,

programming is mostly at the will of broadcasters. Often, extreme

violence, skin show and licentious conduct aired blithely on

television go unreported. Industry insiders insist that though the

censor laws are uniform, a lot of film producers and music video

makers obtain censor certificates from South India. [2]

The NAB (National Association of Broadcasters) has taken up the

censorship issue with the Information and Broadcasting Ministry

many-a-times. The association has also sought for self-regulation

of content to the utmost level meeting the societal standards of

India. The present I&B minister Ambika Soni is quoted to have

said that she has no intention of imposing any kind of censorship

on the media. [5] Soni said that the times have changed, and

together, the Government and the industry need to tackle the

issue of deciding what is the „acceptable‟ content on television.

Another issue is the implementation of CAS (Conditional Access

System). CAS was made compulsory by the Government of India in

2003. Apparently some problems were encountered in the smooth

implementation of CAS. Resistance came from both the sides of

the cable operators and the channels. While the channels feared

that they would be losing out of their „bouquet‟ of channels,

since, most channels were clubbed under some large bouquet.

Star Den for Star India channels, Zee Turner for Zee Channels,

One Alliance for Sony and Discovery, etc. The cable operators

feared that implementing CAS would make them incur loses, as

set up of a set-top box (required for CAS) is a costly affair. The

Government had to mellow its implementation plan for CAS owing

to constant resistance. Only 25% of work has been done to date.

3. So we have a Problem!


Conditional

access System

(CAS) is the way

for the future.

This mode will be

beneficial for all

stakeholders of

the Indian

Television

Industry.

IPTV, Mobile TV,

and DTH are also

gaining

popularity as

alternatives to

cable operators.

Inspite of the various problems encountered in the

implementation of CAS (Conditional Access System), CAS is

perhaps the best solution for the Indian Television Industry when

it comes to home connections via cable operators. The reasons

for the same are: [6]

Consumers get the option to choose the channels they want to

pay for and view, rather than receiving the whole set of channels

that the cable operator makes available to them, and hence

benefit by having to pay only for what they want to watch.

Broadcasters have a long-standing complaint that the Cable

Operators under-declare the actual number of subscribers, and

hence pass on only a fraction of the paid subscriptions. With CAS

it is possible to address the exact number of subscribers.

Cable Operators get the opportunity to pay a part of the

subscription fees to the broadcasters only for the actual number

of end users who opt for the channel, rather than all households

having cable access.

Advertisers get a far more accurate indicator of programme

popularity with only the actual subscribers of each channel being

accounted for through CAS.

Government ensures a fair degree of transparency in accounting.

The first major implication of CAS in the market place will be in

further fragmenting the television viewing segments. Post the

satellite television revolution (‟91), the entire collection of

television viewers was divided into two segments [1] - Cable &

Satellite Television homes (C&S) and Only Terrestrial television

homes. As CAS is being implemented, we will see the further

breaking up of C&S homes into three new segments:

FTACAS C&S Able to watch only Free-to-Air Satellite TV

channels.

POPCAS C&S Able to watch Free-to-Air & „Popular‟ Pay Satellite

TV channels.

PRECAS C&S Able to watch Free-to-Air, „Popular‟ & „Premium‟

Pay Satellite TV channels.

Other modes for expansion of the Indian Television Industry

would be to foray into the IPTV (Internet Protocol Television),

Mobile TV and DTH (Direct to Home). DTH has already become

popular in India with Tata Sky, Dish TV, Reliance Big TV, Bharti

Airtel Digital TV, Sun Direct, being the present DTH Service

providers. [1]

4. The Way to Tread

Free to Air Channels

(FTA CAS)

Popular Pay Channels

(POP CAS C&S)

Premium Pay Channels

(PRE CAS C&S)

Market Structure for the

Implementation of CAS


Due to a very

strong and loyal

audience base

that this

industry enjoys,

the core

competence of

the industry was

never lost during

recession.

On television,

Content is the

King!

The recession came and had its ill-effects. The Indian Television

Industry was hit alright, but the effects were not that detrimental.

Due to a very strong and loyal audience base that this industry

enjoys, the core competence of the industry was never lost. The

Indian Television Industry used to and it continues to entertain

people. In fact, the recession phenomenon has to a certain extent

helped the industry by giving it a necessary mop, wherein all the

non-content driven functionalities were driven out of the market

space. A case in point would be two General Entertainment

Channels Colors (Viacom 18) and 9X (INX Media). Both these Hindi

GECs were launched within a span of eight months. 9X came

earlier. Both the channels had quite similar marketing strategies in

terms of using cricket matches as the premiere medium to

advertise the channels pre-launch. A year or so has passed since.

While Colors has moved on to become the number one Hindi GEC,

9X has been crippled by a huge financial crunch hence, is on the

verge of closure, and isn‟t airing any fresh content. The

differentiator between the channels is “content” that was aired.

This only reiterates the fact that “Content is the King”.

With the audience only increasing, the advertisers had no choice

but to aggressively campaign their products on television. A

prominent rise of 23% in advertisements on television during Jan-

Jun 2009 substantiates the above.

Amidst the worst fears of slowdown, the Indian economy continues

to perform pretty strongly and one of the key sectors that benefits

from this fast economic growth of 6.7% is the Entertainment and

Media industry. This is because this industry is a cyclical industry

that grows faster when the economy is expanding. It also grows

faster than the nominal GDP during all phases of economic activity

due to its income elasticity wherein when incomes rise, more

resources get spent on leisure and entertainment and less on

necessities. Further, consumption spending itself is increasing due

to rising disposable incomes on account of sustained growth in

income levels, and this also builds the case for a consolidated

growth in the sector. The size of E&M in India is currently

estimated at INR 353 billion and is expected to grow at a

compounded annual growth rate of 19 percent over the next five

years. [4] The television industry continues to dominate the E&M

industry by garnering a share of over 42 percent, which is expected

to increase by a further 9 percent to reach about 51 percent. The

Indian Television Industry has only brighter avenues in front of it.

5. Zip-up


Indiantelevision.com Your one stop source for every thing related to television.

[1] The Third Indian Television Revolution CAS & its impact in Indian Market Place By L V Krishnan 23 April 2003

[2] Television censorship, is anyone keeping a watch?

By Aparna Joshi & Hetal Adesara 4 November 2003

[3] A snapshot of Indian television History by Indian Television.com

By the Editorial Board, Indiantelevision.com July 2003 [4] The Indian Entertainment and Media Industry Unraveling the potential

Sources used herein are that of Industry estimates & PwC analysis FICCI and Price Waterhouse Coopers

[5] Ambika Soni reiterates commitment to keep media free of censorship

By Sruthijith KK Reuters India

[6] Wikipedia.org/Indian Television [7] Ibef.org: India Brand Equity Foundation

Media and Entertainment [8] India’s media and entertainment industry grew 17% to reach Rs 50,000 cr in 2007

FICCI in news Mint, March 17, 2008

[9] Data from TAM, IRS and ADEX [10] Changing Trends of Television Viewership

TAM Media Research Archives TAM Peoplemeter

All pictures used herein are original and not resourced from the Internet

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Information Sources

indian television industry

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