Channels hum a new tune to beat song blues

High song acquisition costs force music channels to cut manpower and opt for free videos

With a nearly 200 per cent hike in music acquisition costs over 2005, most of the 10-odd music channels are shifting focus from hit numbers and albums to free (promotional video) songs. They are also cutting down on human resource to be more cost-efficient.

At present, music companies charge up to Rs 1,50,000-Rs 2,00,000 per hit song for airing it three to five times during 2-6 months contract with the music channels.

There is also a cap on the frequency of playing a hit number in a week or a day. Due to this, songs from successful movies like Veer-Zaara, Gangster, Dilwale Dulhania Le Jayenge and Hum Aapke Hain Kaun no longer feature on most of the music channels.

A trade analyst says: "Song acquisition by music channels is still a disorganised business. It generally depends on personal contacts and favours, and the music companies can charge anywhere from Rs 1,000 to Rs 2,00,000 per song from a music channel."

Amar Deb, head of Channel V, says, "The cost of acquiring songs has gone up by 60-70 per cent for our channel in the last two years, primarily due to the mushrooming of several music companies coupled with the increase in the per song acquisition rate."

According to media planners, music channels collectively generate revenue to the tune of Rs 80-100 crore per annum and the figure is growing at 7-10 per cent per annum.

To tackle the high content acquisition costs, Channel V has created several advertiser-friendly properties. "While the overall cost of music acquisition has gone up for all channels, we have managed to attract advertisers on our prime properties like BollyV and Movie No 1," adds Deb.

"On the whole, the business of music channels makes money for most of the broadcasters as is evident from the launch of several music channels in the last few years," he says.

To counter the high acquisition costs, music channels, including Channel V, MTV, Zee Music, ETC and MH1, have branched out into other revenue streams like exclusive film promotions and tie-ups with movie producers.

However, 9XM, the music channel from Indrani Mukerjea-promoted INX Media, is redefining rules. As a practice, 9XM is staying away from promoting 30-second and 60-second clips of new movies. Instead, it is entering into long-term contracts with music firms.

"Our strategy of acquiring only full-length songs has helped us to stand out from the existing crowd of music channels. Advertisers are showing a lot of interest because our programming strategy is attracting a lot of viewers," says Vikas Varma, head (programming), 9XM.

According to industry estimates, the recently launched Yash Raj Music charges the most from music channels. "Since Yash Raj Music holds the rights for some of the most popular films like Dhoom, Dhoom-2, Bunty Aur Babli and Veer-Zaara among others, it charges Rs 1,00,000-Rs 1,50,000 per song for three-five airings," says an executive of a leading music channel.

However, in order to make the music channel business profitable, putting a cap on manpower is important. While 9XM is produced and marketed by a team of just 10 people, Channel V is run by a team of 50 persons. Only MTV has a team of around 100 employees.

Advertisers tend to put their money on a music channel that offers slick packaging, topical music, jazzy promos and one flagship programme, according to an industry observer.

ETC Network, a subsidiary of Subhash Chandra's Zee Network that owns two music channels (ETC and ETC Punjabi), has adopted a different strategy to offset the high content acquisition costs.

According to a source, it has adopted an event-led programming strategy where the channel covers programmes, both within and outside the country, by reaching out to the Indian diaspora. Its capsules on South Indian songs have also generated viewership.

Even though the music channel business is not setting cash registers ringing, more and more players are entering the field. It is learnt that as many as four-six more music channels are in the pipeline.

According to an expert, music channels complete a bouquet for any broadcaster that wishes to offer a general entertainment channel, a news channel and a lifestyle channel. "A music channel is also cost-effective to launch among all other genres of channels," he says.