Have Hindi general entertainment channels (GEC) reached a stage of saturation? Will 2005 see a further regression of this genre or is this space going to be consolidating?

Hindi general entertainment television is touted as the fuel that drives growth in the television industry. With cable penetration today estimated at 50 per cent, currently the GEC genre commands 38 per cent of the total viewership pie.

Flashing back to 2002, the GEC genre accounted for 47 per cent of total viewership. Interestingly, 2003 saw a whopping dip of 11 per cent with GEC being reduced to 36 per cent of the total viewership pie according to TAM data.

January - June 2004 has seen a marginal rise in the GEC share, the viewership up by two per cent at 38 per cent. The audience lost by this genre seems to have been taken up by news channels, Hindi movie channels and sports channels. The Hindi movie genre over the last two years has seen a spike of 3.5 per cent. News channels have grown 4 per cent and sports by about 7 per cent.

Speaking to Indiantelevision.com, Star India's EVP content and communication Deepak Segal admits, "Sports and news are event driven. Yes, mass entertainment channels have witnessed a slight blip but will eventually settle down. General entertainment channels will now go through a phase of consolidation and viewership will grow gradually. Also, the kind of programming being churned out by not only Star but others in this space too, is definitely going to have viewers glued."

Segal also pointed out that another threat to GECs are outdoor entertainment avenues. When queried as to how they are addressing the issue, Segal said,"The launch of Star One is essentially to address this issue and look at increasing the overall viewership pie."

Initiative Media associate vice president Manas Misra points out, "Mass entertainment channels have significantly been affected by news channels. Also movie entertainment channels have taken away a chunk. So, although today GECs have evolved and have come a long way from the Hum Log and Buniyaad days, and a lot more variety is being offered, TV consumption has not gone up. So, unless someone does something dramatically different, mass channels total reach is not going to go up beyond this."

Misra also added that the type of highs that GECs have touched previously will not be seen again. Another point made was the stark difference in the next generations viewing patterns. "With audiences maturing in terms of their own choices, it is bound to lead to fragmentation, and the one who suffers the first are GECs, but finally these are also the ones who will congregate viewership considering the fact that family viewing occasion will not go away."

Misra expects 2005 to see the Hindi GEC space probably going up to 40 - 41 per cent and stabilising there. "It will now be about consolidation and development of the genre."

Set India EVP Sunil Lulla states, "I think one of the largest growing genres today is news, and the dip in mass entertainment channels was not surprising but expected. With the numbers three, four and five in the GEC space not showing any growth, the underbelly of this will have to be borne by the top two players. Although, among all the players, Sony is the only one that has shown a growth and in the last 6-8 months, the least amount of drop."

Coming to alternate sources of entertainment apart from TV, Lulla points out that today cable and satellite is still the cheapest form of entertainment and although the category may have become softer, Sony is still going strong. "There are going to be peaks and drops and the days of double digit ratings is something of the past." Lulla also states that across all GECs the endeavour to offer unique and innovative programming is quite the name of the game, hence this genre will hold its stead.

Audience fragmentation without doubt is one of the primary reasons for the dip. But is the overall viewership also falling? Starcom's TV buying head Gautam Rajgopal says, "Lesser amount of people are watching TV with the emergence of multiplexes, malls, amusement parks. The total viewership pie is definitely coming down, hence GECs are bound to take a beating."

Another reason attributed for the shrinking general entertainment pie are the burst of niche channels. Rajgopal also states that mass entertainment channels will now go through a consolidation phase.

A crucial point not covered is the emergence and gaining popularity of regional channels. Regional channels account for the second largest viewership pie and as of 2004 account for 36 per cent, just two per cent lower that Hindi mass entertainment channels.

Mindshare's investment director Amol Dighe validates this point. "Mass entertainment channels have reached their saturation point. If one looks at the West Bengal, Maharashtra and Punjab market the regional players there have shown a very good growth in viewership. News channels are also a genre that pose as a potential threat to GECs. I see mass entertainment channels now stabilising at this point and maybe even dropping further," says Dighe.

Coming to revenue implications for general entertainment channels, 2002 saw this genre account for 57 per cent of the entire revenue share. 2003 saw it dip to 47 per cent and 2004 revenue shares remain status quo at 47 per cent. Genres that have seen a significant spike in revenue are news and sports. Now, with viewership sliding in the mass entertainment arena, is it fair to say that an advertisers ROI has come down?

Looking at the figures, one can see that although volume has dipped significantly, the value share has dipped in tandem, hence advertisers today are paying only a marginal premium on GECs

Misra states, "With fragmentation of viewership and supply increasing, the pressure on revenue is definitely higher. Although, things are now in a stabilization mode and there are indications that this genre has stabilized. If you are looking at GECs, there is a slight premium but the value share is not out of line."

Rajgopal on the other hand seems more optimistic, saying that with so many channels, rates have now become very competitive. Also revenues this year have already gone up. "This year inspite of the India - Pakistan matches revenue shares have already accounted for 47 per cent and with the festive season in the latter half of the year, revenues on GECs will definitely reach the 50 per cent mark."

Interestingly, when one looks at news channels and the return on investment an advertiser draws from there, the premium paid for a news channel seems to be a lot higher that GECs. In 2002, news channels accounted for two per cent of the entire viewership pie and 11 per cent of the revenue share, whereas in 2004, while the viewership has increased to 6 per cent, revenue has gone up to 15 per cent. Hence, today while GECs' fall in value share is more or less in line with its viewership, news channels are charging a much higher premium compared to volumes delivered.

Regional players on the other hand seem to account for a lot less in terms of revenue when compared to the volumes that they deliver. The premium that is offered by them is also very marginal.

All in all, one can conclude that most see the general entertainment genre in a consolidating phase and a stage when now these players will stabilise. Channel heads though, don't seem very perturbed by the downslide that the the genre has seen. Also, given the fact that mass entertainment channels are the highest revenue pullers, they also have the maximum resources to innovate and develop the genre.

Speaking to TAM India's S-group vice president Atul Phadnis points out, " The channel shares might have gone down but the overall universe base has increased, so there has been real growth in terms of more households and newer areas getting access to cable and satellite television."

Phadnis also admits that with viewership becoming more and more specialist, the task for general entertainment channels becomes more complex as they have to keep identifying new genres of programming which cuts across all SECs, all age groups and markets. So, clearly the task at hand is the introduction of newer concepts and content."

Also, with every new genre of mass entertainment that does well, the potential of it becoming a stand alone channel becomes very high. Hence, the task for GECs become all the more difficult as they provide for the birth of specialist channels.

Innovation seems to be the name of the game as the lines that define entertainment get blurred, and unless GECs pace up, a downslope is always lurking around the corner, whether it be in terms of other genres eating into their pie or the total television viewership falling.