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| Shobhana Subramanian: The battle for the GEC space | | The success of Colours and the resurgence of Zee has segmented the GEC space in three tiers |
| Shobhana Subramanian / Mumbai Jul 17, 2009, 00:07 IST |
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It started out as the tenth general entertainment channel but after a year in that space, Colors has ended up at the top, first upstaging Sony, then Zee and ultimately Star Plus. That’s remarkable really because Star TV occupied the number one spot for nearly ten years. The Viacom 18 venture’s strategy has been near-perfect—launch with a blockbuster show, even if it’s a loss-leader, and follow it up with what Indian viewers love most—soaps. Colors also innovated with films — always a big draw with audiences—screening them without breaks though it says there weren’t really too many of these. And most important, it made sure the channel was seen paying whatever it cost in carriage fees.
The success of Colors, as also the resurgence of Zee, has segmented the general entertainment channels (GEC) space into three tiers. The first tier has Star, Colors and Zee each pulling in GRPs of around 250-plus while the second tier comprises two players: NDTV Imagine, which has been attracting GRPs of 100 consistently for some time now, and Sony, trying to make a comeback. The remaining half-a-dozen channels like Sahara, Sab, Star One and the latest entrant Real, from the Turner Alva stable, bring up the rear. Marketers love the three-horse race in tier I; after years of having to deal with a clear leader, they now have a choice. It’s no surprise, therefore, that CPRPs, or the cost per rating point, in the GEC space have come off by at least 10-15 per cent, if not more, over the past year. Fragmentation has seen to that — TRPs, which at one time were as high as 14-15 for a couple of K-serials, don’t go beyond seven or eight these days; even three is considered decent. For broadcasters though, costs aren’t really coming down because they’re spending much more on marketing — marketing budgets for a soap can go up to as much as Rs 2-3 crore given the kind of below-the-line spending that needs to happen. Without ‘interactive’ marketing, no soap can hope to remain on air for very long.
Surprisingly, there’s been no mortality yet — INX was struggling but has managed to hang in there with additional financial support from PE funds. NDTV Imagine, with Sameer Nair at the helm of affairs, hasn’t quite made it yet, but has bought itself some time with another round of funding. It’ll be interesting to see if Real, which has had a disastrous debut — GRPs averaging 10 and 11 — puts up a fight. Somehow investors seem to have great faith in the business—there seems to be no shortage of PE funds that want to bet on the space.
It’s true that viewership for the GEC genre has been going up in the past couple of years after slipping sharply — it rose 26 per cent between November 2007 and August 2008, and thereafter, according to TAM PeopleMeter, the share has remained more or less steady. However, the top three channels have together walked away with a bigger share, which has moved up by nearly 10 per cent after Colors was launched. That can’t be good news for the rest. Even if revenues for the broadcasting industry come in at an optimistic Rs 20,000 crore by 2010—just over half from advertising and the rest from subscriptions—there isn’t enough to go around. These numbers assume that around 35 million homes will have gone digital by then which may not happen. But even if it does and, say, a third of the total of around Rs 6,500 crore goes to the GEC space, it will have to be shared by eleven players with chances of a disproportionate share going to the top three.
The problem is that costs aren’t coming off, whether for content or carriage fees — estimated at close to Rs 1,600 crore a year for the industry — and marketing costs have risen sharply. Colors may have managed to monetise some of its GRPs, but it continues to spend large amounts on content and will need to do that to keep the GRPs coming. Moreover, it doesn’t yet command a premium over Star TV’s ad rates and it’s possible Star will drop rates in a bid to hold on to market share.
In the meanwhile marketers have got smarter, not too many are getting into annual deals, they’re playing it by the quarter. For sure, the space has done a great job so far but it’s getting tougher now.
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