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
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.
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