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| Vanita Kohli-Khandekar: The paradox of choice | | Indians arguably have the largest no of news channels in the world |
| Vanita Kohli-Khandekar / New Delhi Jun 30, 2009, 00:48 IST |
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It is frustrating being a television broadcaster. Usually, in a developing, under-penetrated market, as the number of players grows so do the revenues and consumer choice. While that has been true in the first fifteen years of television’s growth in India, the last three have been pathetic. The more channels there are, the more the competition—and the greater choice has only made things worse.
That is what struck me in a chat with Chintamani Rao, CEO, Times Global Broadcasting Company. The Bennett, Coleman and Company subsidiary launched a third channel, ET Now (for business news), recently. But when I asked him what the biggest challenges were, the answer was disappointing.
Distribution, says Rao, still remains the biggest roadblock to launching a television channel in India. The stranglehold on cable, the format with the largest number of subscribers (83 million) is so strong that both carriage and placement fees continue to rise. News channels pay anywhere between Rs 15-30 crore per channel per annum while general entertainment channels pay two to three times that figure. The going rate depends upon the city, the genre and how the distribution company feels.
Every new channel — there were 388 at last count — comes along and raises the stake. So distribution costs could range between 20-40 per cent of expenses. On the other hand a pricing freeze means that cable cannot be a great source of revenues for any channel.
The next logical question, therefore, is why bother with an English business news channel. Why not target a larger audience so that ad revenues could go up? Advertising targeted at news channels forms just over 10 per cent (Rs 1,300 crore) of the Rs 12,000 crore TV ad market. Of this Rs 1,300 crore, English business news is a small, unknown portion.
The potential for Indian language business news channels lies unexplored. Except for CNBC Awaaz, there are no other business news options in Indian languages. Why has an Aaj Tak (Hindi) or a Sun TV (Tamil) not happened to business news, given that English is barely spoken by a 100 million Indians?
Rao gave me the same answer as the one that I have been getting for almost ten years now — the money is in English. Advertisers are still willing to pay a premium to reach people who watch news in English. This seems regressive. The link between purchasing-power and language in not so strong — especially since most Indians, irrespective of income and class, speak two or more languages.
The English, metro bias, however, runs strong in the media planning and buying community. Take newspapers for instance. Going by Indian Readership Survey 2008 data, each of the top ten Hindi dailies has more than thrice the number of readers of The Times of India. Yet even top language brands cannot charge more than one-third the ad rate of an English-language publication. According to one statistic, an English-language reader is valued nine times more than a Hindi-language reader and 13 times over a non-Hindi-language reader. This is largely due to a perception of better demographics.
In print, the gap in advertising rates between English and Indian languages has been narrowing. There are no statistics on what is happening to the gap in advertising rates on TV. However, there is one indicator — the ad rates for Hindi news channels are lower than those for English. The big Hindi channels make up in volumes what they lack in value.
So ET Now and others will continue to get launched even as large gaps in the market — as is the case with Gujarati business and Bhojpuri news — go completely unaddressed. The structural flaws in the Indian media business will continue to haunt its growth.
With 70 of them, Indians have arguably the largest number of news channels in the world. But they have very little choice.
vanitakohli@hotmail.com
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