Entertainment - Broadcasters speak in Regional Languages

For most broadcasters in India, venturing into the regional language channels space has always been part of the plan. But with media mogul Rupert Murdoch, chairman & chief executive, News Corporation, which owns broadcast network Star Group, announcing an investment of $100 million to launch as many as six regional channels in India, has just stirred things up. Every leading broadcaster in the country now plans to enter the space in a hurry so that it does not miss the tide.

According to Adex India, a Television Audience Measurement (TAM) media research division, so far in 2008, out of the total advertising revenue on television, regional channels contributed 41% vis-à-vis 51% by the national channels.

CD Mitra, president, Mudra MAX, says, “Small towns and regional markets are growing faster than the national average. Equally important, there are significant lifestyle and aspirational changes happening in these areas.” Mitra says that these have been referred to as the ‘Dhoni effect’ and the Bunty aur Babli phenomenon—small town people with big dreams. And in such social transition, regional and local media are playing a significant role.

Riding the growing literacy and more openness to the outside world, the media is becoming a window to the world, and fuelling aspirations. In the process, media itself is undergoing rapid transformation, growth and segmentation. The number of regional channels being launched and doing well is a testimony to that, including languages like Marathi, Oriya, Bhojpuri, not to forget Tamil, Telugu, Malayalam, Kannada, Bengali and others. Interestingly, regional channels are also exploring new segments, which are surely beyond general entertainment channels (GECs), like news, sports, kids, movies, music and others.

Nandini Dias, chief operating officer, Lodestar Universal, which is a media buying agency, says, “The next phase of growth and fragmentation is expected to take place in the individual regional state. While in the south, each state has more than ten local language channels, West Bengal, Maharashtra, Orissa and Punjab have very limited regional options. So in these markets, the gestation period of any new channel will not be too much. For example, last year in Maharashtra, Me Marathi and Zee Talkies got launched. Both these channels have a considerable number of advertisers.” Dias also feels that genres like movie channels and music channels should do well.

Among the mainstream broadcasters, Essel Group that made Zee TV a household name houses the most regional language channels in India including Marathi, Bengali, Punjabi, Gujarati and others. “Many of our brands have national appeal while others are leaders in regional markets. It is our keen understanding of cultures and local ethos that allows us to anticipate viewer’s needs and delight them. Our broadcast bouquet of channels is spread across genres such as general entertainment, movies, sports and music in languages such as Hindi and English,”says the official spokesperson of the regional channels.

Recently, during his visit to India, Murdoch announced an investment of $100 million (about Rs 420 crore) in the expansion of the company’s channel portfolio in the regional language space. Murdoch says, “We plan to launch regional channels in six cities in India with over $100 million investment over the next 12 months.” He also said that there could be partnerships for the launch of these channels but declined to specify details. Star is planning to launch Bengali, Gujarati and Telugu language GECs within this fiscal. “If necessary, we will partner with regional language networks. However, it is too early to talk about it,”adds Murdoch.

Balaji Telefilms was supposed to invest Rs 60 crore for a 49% stake in the JV while Star Group would hold the remaining 51%. They also planned to launch channels in Telugu, Kannada, Malayalam and other key south Indian languages. Sources claim that the project kept getting delayed and the two parties blamed each other for the same. Star and Balaji had an exclusivity agreement under which no Balaji show was to be run on any other channel during the time slots on which Star had Balaji serials running. Star paid more than 200% of the actual rate to Balaji as part of this exclusive arrangement. This agreement expired in June. Following the exit of Peter

Mukerjea from Star and the launch of general entertainment channel 9X, Balaji sold a number of its key properties to 9X. This also strained the eight-year-long Star-Balaji relationship to a great extent. Star India holds 26% stake in Balaji, which the former now wants to exit. Industry sources now claim that Star may join hands with Asianet, one of the leading broadcast networks in south India to float the regional language channels. Star may also pick up a significant stake in Asianet, they add.

Industry sources claim that the total revenue of Star India is to the tune of Rs 1,200 crore and the only regional language channel under its banner, Vijay TV, brings in about Rs 50 crore. Media Content & Communications Services India Pvt Ltd (MCCS), which is a 74:26 joint venture between ABP TV and Stargroup respectively, holds two channels Star Ananda—a 24-hour national news channel in Bengali and Star News. Besides this, Star also has Marathi news channel Star Majha.

The only top league television network, which is yet to enter the regional language space is Sony Entertainment Television, which has a GEC under the brand name Set MAX—a Hindi-movie and cricket channel— and Sony SAB, which the company acquired from Adhikari Brothers in 2005 by paying about Rs 57 crore. Kunal Dasgupta, CEO, Sony Entertainment Television, says, “We have been thinking about venturing into the regional channel space for quite sometime now. However, we are currently evaluating the right opportunity.” Dasgupta also adds that the regional space has become very interesting, which is generating critical and sizeable business.

Even a new entrant like INX Network, which has currently three channels 9X, NewsX and 9XM, and is looking at the needs of the audiences and opportunities in the music space, may launch regional language music channels.

The alternative channels may also explore different genres of music. Vikas Varma, head of music and entertainment channels, INX Media, says, “There are certain ideas in the pipeline. We did an internal research before launching 9XM. The ‘so-called’ music channels were focused on reality shows, fiction, shows and other programmes.”

Basically, they were doing everything else, but music. There was a huge vacuum in the market and clearly, there was a need for a dedicated music channel. Says Varma, “It was important for us that we keep our focus intact over the fact that we were a music channel.”

While on the one hand, there is a demand and the ripe audience waiting for these regional language channels, media planners feel that advertising revenue, which is the primary revenue for all broadcasters, may get more fragmented. One industry expert who did not wish to be named, says, “For those entering the regional space would say that the advertising pie would grow and those who would not venture into that space would say otherwise.” However, Sneha Rajani, business head and vice-president, marketing, Set Max, which is a movie and cricket channel offered by Sony Entertainment Television, says, “With the growth of regional language channels, there will be a number of local advertisers who will come on board and and advertising will get far more focused. Therefore, one can expect that there will be some kind of an expansion in the advertising pie. However, whether, the growth in advertising will be significant or not, we will have to wait and see.”

Dias of Lodestar Universal, remarks, “Most advertisers consider regional channels fairly lucrative. While national channels form the base of most plans, the regional channels help build empathy and comprehension. Fragmentation will also happen. And as a result, advertisers will have to spend much more to reach a certain number of people. Household brands such as soaps, shampoos and oils need to spend more to have the same reach.”