Amit Khanna: The great channel rush

FREEZE FRAME

What is it that still makes India's crowded TV channel space an attractive destination? The last couple of weeks have seen the launch of two new channels, Zoom and Hungama.

Interestingly, behind both of them are experienced media companies, albeit of different sizes and backgrounds. Zoom is the first of a proposed bevy of channels being started by media giant Bennet, Coleman & Co (or "The Times of India" group as it is better known). Hungama is a baby of UTV, the large production house.

Obviously these are no carpetbaggers or gold diggers but people with formidable experience. If they believe there is a business case for new channels, there has to be enough reason to venture into what appears to be a congested market.

There is even more compelling reason to believe in the India television story because "The Times" group has finally taken a plunge into TV after several tentative tries and UTV has launched Hungama after selling its stake in Tamil channel Vijay TV to Star. And they are not alone in their optimism.

Look at some more pointers. Star TV has started Star Utsav and is about to launch Star One. Sony is in talks to acquire SAB TV. Disney will launch three India-specific channels in the coming months.

NDTV has announced that it is launching a business channel and TV 18 will soon have a Hindi CNBC beaming into Indian homes. Newspaper biggie "Dainik Jagran" and Delhi-based construction group Senator have separately announced plans to introduce news channels.

Sahara is investing even more money, this time in a joint venture with advertising agency Percept, to reinvent its television business. Zee has started a comedy channel Smile and has begun foraying into south India with Alpha Telegu (soon to be followed by Tamil).

Discovery is beginning to telecast its lifestyle channel. These are some of the more concrete proposals but several others are floating around.

The recent fracas about cricket telecast rights at apparently exorbitant prices implies that the market potential is huge. Once again, film producers have broadcasters wooing them with hefty sums for blockbusters.

In fact, even box-office duds are being sold. Programming budgets are on the rise. SET is currently shooting "Indian Idol" on a reported budget of Rs 1 crore per episode. Balaji Telefilms and Star "� now business cousins "� have just started an opulent thriller at the unearthly hour of 11.30 pm.

At least half-a-dozen talent hunts are being filmed by various channels at immense cost. More and more Bollywood stars are turning to the small screen. Once again there is a buzz about TV. Why even venture capitalists are once again looking at funding content companies.

The answer to this reborn zest lies in a simple equation. India, in spite of repeated bungling by successive governments, presents one of the most lucrative opportunities in the digital age.

It's well known that we have close to a 100 million TV sets and that there are about 50 million cable passed homes. What is equally well known is that only a quarter of these are declared connections. Addressability in some form or another is inevitable and consequently one is seeing the launch of what are referred to as niche channels. Now more and more people are coming to believe that technology will finally force the government to come out with a regulatory framework that will be both consumer and broadcaster friendly.

It is this that is driving the growth. After all, it is a matter of time for rampant theft to be reduced, if not diminish considerably, without impacting consumers or genuine stakeholders. Many analysts agree that the number of declared homes in India will grow by at least 100 per cent within the next two years.

This translates into a market of about Rs 20,000 crore at current prices. To this add rising advertising revenues and the buoyancy is not unfounded.

Technology too is playing an important role in this rather reluctant transformation. Newer, efficient and cheaper addressable systems are emerging.

Unbundling of content bouquets at the last mile will become viable in a matter of time. Even as a new regulatory environment evolves, Zee has already started its DTH service "� Dish TV. Doordarshan is about to begin its own direct-to-home broadcast even as the Tata-Star combine awaits the government of India's nod.

This is just the beginning. Broadband is all set to enter Indian homes, bringing with it multiple choices, on-demand viewing and time-shifted TV.

A large pie is getting bigger. Although it is being segmented, all the players can hope for a bigger portion of it. It is this realisation that is switching on new channels, revving up programming budgets and attracting new capital.

We went through this cycle once before in the 1990s but between the industry and the government we fouled it up. Let's hope we get it right this time. Otherwise, like the Indian cricket team, the Indian TV team will also be called chokers! l

Amit Khanna is chairman of Reliance Entertainment. The views expressed here are his own