Star betting big on regional GEC markets

Broadcasting major Star India is making a big push into the regional general entertainment channels (GECs) markets to tap their increasing viewership and huge revenue potential, a senior company official said today.

"The regional market presents a big opportunity. The channels are offering unique content that represents the changing face of those societies," Star India President for South Jagdish Kumar said here.

The broadcasting major has been increasingly moving beyond being predominantly a Hindi- and English-focused broadcaster and has been expanding its footprint nationwide through alliances and aggressive marketing.

In the past few years, it has launched regional GEC channels like Star Jalsha (Bengali), Star Pravah (Marathi) and Star Vijay (Tamil).

Kumar said the regional channels represent a growing opportunity in terms of revenues and the ratings are evident of the fact that they are well-received by audiences.

He cited a McKinsey study which forecasts that the regional markets are expected to grow at 20 per cent CAGR in terms of ad revenue to over $1 billion by 2012-13.

The share of regional markets in the overall revenue pie (including subscription) is also expected to increase from the current 37 per cent to nearly 45 per cent (about $1.6 billion) by 2012-13.

Kumar said the Southern markets have about 32 million cable and satellite households and ad revenue from the region is about $415 million, while subscription is about $124 million.

"The Southern region has one of the highest levels of TV penetration and cable reach. Given the higher literacy levels and better infrastructure, the South is always lucrative for any marketer," Kumar said.

Star entered the Southern market in January 2009 through a JV with Jupiter Entertainment (Star Jupiter), which in turn bought majority stake in Asianet Communications.

Began as a Malayalam channel, Asianet now broadcasts Kannada (Suvarna), Telugu (Sitara) besides two GECs in Asianet and Asianet Plus.

In 2008, Star forayed into the Bengali and Marathi markets too with Star Jalsha and Star Pravah.

Star Pravah and Jalsha general manager Ravish Kumar said the C&S household in Bengal is about 15.5 million, while Maharashtra has 36.6 million such households.

"Star Jalsha was launched with a clear and focussed 'youth centric' positioning, which was reflected in the 'Chalo Paltai' theme. We introduced some new concepts, which have done well for us," he said.

As regional channels cater to specific markets, they have a better chance of helping local brands, making an attractive proposition for both network broadcasters and smaller firms.

"Advertisers are focussing on smaller towns. They now constitute a new market that is most often underpenetrated," Madison Media Infinity Chief Operating Officer Rajiv Gopinath said.