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The remedy: To correct the situation, the report proposes
that voluntary addressability be introduced. Tiering of channels
is another option. Distributors should offer multiple tiers of programming.
The basic tier should have mass and FTA channels. The premium tier
can happen in an addressable environment and would cover sports,
lifestyle and other niche
segments. In 2010, out of 85 million non-terrestrial television
homes digital platforms will be available in 13 million homes.
Niche genres will grow. They have already significantly
strengthened their value proposition the report notes. In addition,
there will be more opportunities in areas like animation and lifestyle.
This is proven with the recent entry of Zoom and Discovery Travel
& Living. On the advertising front, the report estimates that
last year the overall pie was Rs 118 billion. Press has a share
of 46.1 per cent followed by television with a share of 41.1 per
cent. Out of home advertising gets a 7.2 per cent share. However
at 0.50 per cent India has one of the lowest advertising spends
to GDP ratios in the world.
How different genres are performing: Mass entertainment
channels get 40 per cent of the viewership. The report notes that
broadcasters are starting to realise that viewers cannot be taken
for granted. While they have been able to capture the mood of the
viewer sports and Hindi film channels have had to spend heavily
to acquire properties.
For instance the cricket World Cup in 2003 fetched a price of $85
million. In 1992 the price was $10 million. This marks a 750 per
cent rise. News channels have registered a 100 per cent growth in
viewership in the past three years. The same goes for kids channels
and English entertainment channels.
The report notes that with Mirza and Karthikeyan doing well, viewership
for F1 and tennis is growing. However viewership for sports channels
will be cyclical depending on the frequency of important events.
As far as news channels are concerned the next growth driver will
be in the business space.
The news channel space is expected to grow at the rate of 40-50
per cent in the coming three years. Going forward the report states
that broadcasters and content producers will begin to work out backward
and forward integration models.
The ad scenario: Until recently FMCG companies and consumer
durable marketers were advertising. Today, the advertising segment
has expanded to include youth and teen products, financial products
and services, telecom. Mass entertainment channels like Star Plus,
Sony have the largest loyal advertising base. Almost 17-18 of the
top 25 advertisers only look at these channels. Not surprisingly,
financial products can be seen on news and business channels.
One source of revenue for channels could be differentiated content.
For instance you could have ads free telecast of cricket with a
differentiated on-ground coverage. English film channels enjoy the
highest ads to viewership ratio. Regional channels
have the lowest ads to viewership ratio. The report notes that regional
channels have had to jostle for viewership in the face of an increasing
variety in offering from the mass entertainment channels.
The Film segment: The film industry revenue is expected
to touch Rs 140 billion in 2010. The report states that while film
contribute just 27 per cent to entertainment revenues they form
the heart of the entertainment industry. Compared to television
this sector is unorganised with a low level of discipline.
The Music segment: Reversing the slide, the music industry
has grown to Rs 10.2 billion in 2004. The report predicts the sector
to enjoy a five per cent year-on-year growth to touch Rs 13.2 billion
in 2010.
The music industry needs to reinvent its business model in order
to attract significant investments. Digital infrastructure, effective
distribution formats and a conducive regulatory regime to combat
piracy is necessary to push growth, according to the CII-KPMG report.
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