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| You ain't seen nothing yet | |
| Ashish Sinha / New Delhi December 12, 2008, 0:44 IST | |
 TELEVISION: The number of television channels in the country could go from 360 to 500.
Nowhere in the world have television viewers been spoilt with so much choice as in India — there are over 360 television channels on air in the country and applications for another 160 await the government’s nod. Every genre, be it general entertainment, movies, sports, religion, news, music or kids, has over half a dozen options in every conceivable language.
Is it a recipe for disaster? The unequivocal textbook answer should be, yes. But the facts suggest something else – no channel, so far, has shut shop, though a great many of them are faced with an unprecedented resource crunch.
Clearly, the demand for television entertainment is huge. There are about 80 million cable & satellite homes in the country, in addition to another 50-52 million connected by the terrestrial network. Annually, some 12-14 million television sets are sold in the country. At least one state, Tamil Nadu, has given out free televisions to people. (It is now learnt to have firmed up plans to hand out another four million sets.) It is only natural that for a television-crazed nation, broadcasters will forever stay busy.
On the other hand, the electronic media gets advertisements worth Rs 8,000 crore in a year, though over half of this money is cornered by about half a dozen general entertainment channels. The revenue for most channels therefore is not high.
Still, the low-cost business model, thanks to zero entry barriers, helps them make money. Like their counterparts in most other industries, broadcasters have learnt to make do with less.
“It’s only a handful of channels that fall in the high-risk, high-returns category. And we tend to put the business of all the 360-plus television channels under the scanner,” says Sanjay Salil, former television anchor and now the managing director of Mediaguru, a media consultancy.
According to Salil, a large chunk of the channels have small operations which require an annual expenditure of Rs 1-4 crore or even less. “These tend to make money over a period of 2-3 years. While others with mid-sized operations tend to recover their investments in 3-5 years,” says he.
Industry estimates suggest that nearly 60 per cent of all the channels fall in the small to medium category. And these are mainly in genres like religion, music, lifestyle and regional including news and entertainment. Low investments make early break-even possible.
Only 12-15 per cent of the total can be termed as ‘serious’ players — both in the news and entertainment genres, industry sources say.
The genre which has registered over 100 per cent growth is news. Experts say that a national-level news channel requires a capital expenditure of Rs 60-70 crore and a monthly recurring expenditure of Rs 5-7 crore. A regional news channel requires about half of it. And news channels catering to smaller regions or states can get going with an investment of Rs 3-15 crore and monthly expenses of Rs 1-2 crore.
“For a national news channel or a regional channel, investments can be recovered in 3-5 years,” says a research-analyst working for a Mumbai-based financial consulting firm.
However, there have been instances of media firms diluting their stake and getting investors in channels, especially in the news genre. “Dainik Jagran did with Channel 7 (now called IBN 7) or Janmat was acquired by a construction firm,” Salil says.
Clearly, the sector sees no signs of a slowdown. “For the masses, the only source of entertainment is these cable channels and their daily dose of soaps and reality shows. Funds will always come where the masses are the biggest consumers,” says Ashish Kaul, executive director & business head of UAE-based Credence International, which is set to launch a number of specialised TV channels in the country next year.
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