Big future for small screen

Freeze Frame

At last count 172 TV channels were being received in India. This, of course, includes about 20-odd channels which are not specifically beamed at Indian audiences but spill over from other satellite footprints.

It still means that Indians have a choice of 150 TV channels in over 30 languages from around the world.

Almost every genre is represented "� general entertainment, movies, news, sports, music, nature, animation, documentaries, religion, children, adventure "� in Indian living rooms. Is there room for so many players in the crowded telesphere?

In the coming 12 months at least a dozen new channels are set to be launched, some by existing majors. The CAS muddle notwithstanding, what does the future hold for TV broadcasters in India?

If we forget the much-lamented under declaration of cable subscriptions for a moment, the entire TV broadcasting industry should be worth over Rs 12,000 crore.

Of this, Rs 5,000 crore accrues from advertising. But from the remaining Rs 7,000 crore only Rs 1,000 crore flows back to broadcasters with another Rs 1,000 crore remaining with Multi Service Operators (MSOs) and the declared last mile operators (LMOs).

Where does the remaining Rs 5,000 crore disappear? It is this missing Rs 5000 crore upon which depends the survival of several old and new channels.

There are an estimated 100 million TV households in India of which 50 per cent is cable passed. TV penetration is growing by 10 per cent annually and the number of cable homes by 20 per cent.

A robust economy and two successive good harvests are already spurring demand and both TV sales and TV advertising should look up in the months to come.

There is a lot more clarity in the regulatory environment, sporadic hiccups like pre-censorship apart. Newer technology is finally making broadband and convergence a reality. The environment is conducive to exponential growth and large new investments.

In fact, there's talk that half a dozen IPOs of TV companies led by TV Today and possibly Sony Entertainment, UTV and SUN TV are in the offing. So things should be hunky dory in tellytown.

This year's mood is definitely more upbeat in most networks and production houses. Star is happy retaining its leadership position and with having successfully launched Star News.

Sony is happy with SET Max's performance during theWorld Cup and "Jassi's" triumphant debut on SET. NDTV is happy with its two news channels and the noise they are making.

Discovery, Sun, Eenadu, CNBC and Sab are all smiling. Why even Sahara's extravagance does not look all that absurd and Sub hash Chandra's eyes have a new twinkle. It just can't be that viewership and advertising have gone up dramatically in all cases.

For the first time there's some glimmer on the small screen after years of a lingering fade out.

What are the pitfalls? The most obvious is the disorganised distribution sector. In spite of good intent and a court directive, I do not see the conditional access system (CAS) being implemented for several months.

In such circumstances, what the viewers are actually paying to watch so many channels is just not reaching the broadcasters. This makes it very difficult for non-mainstream channels to make money because they have limited advertising revenue in any case.

All this talk about niche channels is quite redundant in a market where there is little return from subscription. The cost of marketing TV channels itself is becoming prohibitive.

To be able to rise above the clutter means the ability to spend crores in sales promotion. This again makes it difficult for the smaller players to compete. There is no doubt that the advertising cake is enlarging but it's the biggies who are getting larger pieces of it.

The fact that Indians still watch much less television (2 hours a day) than people in most developed markets (up to 4.5 hours daily) implies that viewing time will keep going up in the immediate future.

Also, the extremely low PC penetration in India means that most people spend no time surfing the internet, a particularly increasing trend in developed markets. So with viewers and viewing time increasing, the short-term outlook for most players is good.

However there is too much of 'me too' programming and packaging. The fractured TV market will have to fragment organically to make it worthwhile for all stakeholders.

Pan-Indian programming is a myth woven around Hindi language channels. Yes, Hindi is the dominant language and as such attracts larger audiences.

But the one major trend apparent is the rise of regional language channels even within specific genres "� sports, especially cricket, being the exception.

To my mind, technology will change the course of broadcasting in India. This will happen sooner than most analysts predict. Whether it is direct-to-home (DTH) or broadband cable, the next 12 months will see a lot of action. Pay per view and video on demand, among others, will change the contours of the business.

If addresibility has to happen, it will only when there is a value addition to existing services. Broadcasters busy creating bouquets and bundles may suddenly find themselves left in the lurch as the emphasis shifts to programme specific viewing.

In fact, the coming years will see the unbundling of content and multiple platform delivery. If the industry, given the right regulatory environment, is able to capture these new opportunities, not only will existing players thrive but also even new entrants may have reason to cheer.

Even as the leaders and laggards fight it out, the ultimate winner will the viewer who will get to watch more for less in more ways than one. For years to come, the remote will continue to be the most powerful tool in the television trade.

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