MxMIndia

Tag: Times Television Network

  • Presenting the second part of our half-yearly reviews where we asked industry captains to tell us how the first six months of 2012 have been

    The Half-Year That Was-II

    By Team MxM

     

    Continuing with the feature we carried on July 2 (Link: http://www.mxmindia.com/2012/07/the-half-year-that-was/), we bring in more views from the industry on the six months gone by. This half-yearly report card is again a mixed bag – while some have had an excellent run, others had few hitches on the way. Here’s bringing views from some leading players of the industry.

     

    Broadcasting:

    Rohit Gupta

    Rohit Gupta, President, Sony Entertainment Television

    So far, it’s been an excellent year for Sony network. And I’m sure it’s been same for the industry, at large. The industry is still growing and there have been no cuts in spends. People are still putting their money in the medium. I’m sure there is no gloom surrounding this industry. Even the 2008 slowdown didn’t affect us. So, there is nothing to worry about too.

     

     

    Sunil Lulla

    Sunil Lulla, MD and CEO, Times Television Network

    I would say, it has been testing six months for the broadcast industry. The biggest set-back has been the extension of the digitization implementation. The IBF ran a very good campaign for it but since MSOs couldn’t fulfill the requirements, unfortunately it has to be postponed. My advice to the ministry now would be to take strict actions and make sure the new deadline is met. It is important for the industry since it will shape the industry and help us understand it better too.

     

    By and large, important events in the broadcast industry like IPL, Indian Idol did well and a new show like Satyamev Jayate was launched. However, there is still a gap between how a show performs and what the viewers really want. Hence, I think TAM needs to be more clear and needs to increase its sample size too.

     

    But what really shocked the industry was the new adult timings and ‘A’ restrictions on television. What happened with Dirty Picture’s telecast was regrettable. Nevertheless, after the self regulation imposed by various channels – news and GECs – the quality of content has improved.

     

    As from the business point of view, from January till April, it was good; but May onwards the marketers have had a watchful attitude. It might not impact the industry at large, but a certain sections might get affected. Also, given the current economic climate, one will have to keep a very watchful eye for the near future.

     

    Prasana Krishnan

    Prasana Krishnan, COO, Neo Sports Broadcasting Pvt. Ltd

    The last six months have been eventful for the broadcast industry. First it was the whole discussion regarding digitization – from notifications to it finally getting delayed. Hopefully, the new deadline will be met as it is positive for the broadcast industry. Also, the new advertising guidelines set by TRAI will make sure that the market doesn’t get diluted.  Such moves will only benefit the industry and help it grow.

     

    However, there has been a slowdown in ad sales and revenue generation. Everyone knows what happened during an event like IPL. It is a slow phase right now, but the costs of purchasing rights are still high. So, it won’t be wrong to say that testing times are ahead.

     

    K Sriram

    K Sriram, GM, Vijay TV

    The last 6 months in the Tamil GEC space has seen a dramatic change in programming. KBC travelled into Tamil Nadu and with actor Suriya donning the role of anchor. The barrier between the big screen and television was truly breached for the first time. KBC Tamil ensured that prime time television in TN was redefined, as it not only cut across audiences, but also surged ahead of the power cuts and the IPL fever and eroded into SUN TV’s prime time shares. Vijay TV saw a growth of 41 per cent in the year in a market which was otherwise declining. Content came to the fore.

     

    Tamil television also saw the movie acquisition game being taken to another level with Nanban, the hit Tamil adaptation of 3 idiots, being screened within 100 Days on Vijay TV. Another path breaker given that A+ titles before were insulated for a year. Loud and clear in the Tamil GE space – the game just got bigger and in the last 6 months there was only one player playing the game. Competition is sure playing catch up.

     

    Marketers:

    Harkirat Singh

    Harkirat Singh, MD, Woodland

    The overall market in the branded retail segment has been seeing growth. The biggest change that one sees in this segment is that now the growth comes from smaller towns. In the earlier phase, the growth came from metros; and if one ventured into smaller towns in branded retail say a decade back, most likely, things would not fall in place. Now the risk factor in venturing into the smaller towns is much less and there are many players in branded retail who are turning towards these cities knowing that growth opportunity lies there.

     

    For Woodland, last six months have seen steady growth and we intend to open 60 stores this year, though the rider is to expand but be selective. The market, I would say, has been slow. But that is the trend I would say during a particular time of the year where each year business is slow and picks up only later. As for retail, I think the market is vibrant and the sector has been seeing activity and is slated to see increased activity with FDI in retail being relaxed.

     

    Vikas Jain

    Vikas Jain, Executive Director and Co-Founder, Micromax

    For the mobile phone industry there has been no concern about consumption, as the demand for new sets continues to be on rise. The change being that now the customers are well-educated on the mobile sets they want to buy and with change in technology there have been change in the preference on the type of mobile sets. The key, therefore, is to recognize and anticipate the product in demand and meet the needs of consumers. The players need to create a roadmap of the products to be launched rather than get carried away by technological changes. Keep an eye on the changing trends and tweak the launches accordingly.

     

    On the flip side, the devaluation of rupee has put pressure on the margins and Micromax being a player that vouches for being cost effective will not yield to increasing prices of the phone sets. As for following any trend on cost cutting on the marketing and communications front, we have not done any. We continue to be associated with Bollywood and Cricket and would associate if any good opportunity came to us.

     

    Media Agencies:

     

    PM Balakrishna

    PM Balakrishna, COO – Allied Media

    I think the months of April-May were on par but June was not so great. The feeling is that of a slowdown for sure. But an advertising perspective there is cause for worry. It’s a reflection of the economy not looking good in the past few months with petrol prices seeing a hike, inflation seeing a rise and other such factors. These factors play a part in the way media spends pan out.

     

    Where television is concerned there were some properties that did well like the Euro Cup recently and also the IPL before that, but then there are signs of slowdown with advertisers not being too keen to be associated with properties and also with the rates coming down. With Print, which sees ads from sectors like Real Estate and so on, there was a sudden upsurge that was seen in June with most property dealers advertising a lot in dailies and magazines. But that may be a sheer sign of desperation because transactions are not really happening or consumers are not really picking up stocks. There has not been a surge from other sectors as well and they are treading cautiously. So if one were to do a quarter to quarter analysis, one would see that there has been a decline in April-June this year compared to the same quarter last year.

     

    As for the revival, what I have observed recently is that clients have been drawing up plans which they might want to unveil soon, probably around the festival season. But I think overall, the growth will meander along in the next quarter also. Probably the last four months of this year may turn out to be good but whether it is enough to offset the slow-burn over the first six months – I am not too sure.

     

    Anamika Mehta

    Anamika Mehta, COO – Lodestar Universal

    Although we are six months into the year, I do not think the industry will record the original projections that were forecasted. We are just into the first quarter and therefore we cannot conclude much but overall some categories are seeing a slowdown. Sectors like real estate and finance have seen a slowdown in the spends but FMCG companies are yet to go slow. They are playing a cautious game though.

     

    Also, much of the growth is also the result of the current economic conditions which do not look good at the moment. But it will not be all gloom and doom as is being witnessed in Europe but it will also not be a great story as was being propounded forIndia. Also, one cannot predict the exact figure beyond a point but the approach is going to be that of caution.

     

    Sundeep Nagpal

    Sundeep Nagpal, MD, Stratagem Media

    I would say the media industry in India is already feeling the effects of the economic gloom that has been in the works for some time now. From what I have been given to understand the first quarter of this fiscal has been reasonably difficult. In fact nothing can be said about the trend that will emerge in the next six months as there is some amount of scepticism in the industry. Unfortunately, in our industry fluctuations are happening faster than what we have witnessed before – whether up or down. It takes a lot of deeper understanding and attention to details if one has to figure out what the current media scenario correlates to. Frankly, even I do not have an answer to that. It’s very easy to say that it is dependent on the overall global or Indian outlook but that is too macro a view to attribute to. If I was a media planner, I would be looking at ways to look out for the early signals and accordingly find out the relevant methods to adopt. Overall, the industry may just about see a decline in its growth numbers for 2012 than what was originally anticipated.

     

    Advertising:

     

    Arvind Sharma

    Arvind Sharma, Chairman, Indian Subcontinent, Leo Burnett

    As the GDP numbers have been showing a slowdown, one can see that it is getting reflected in the advertising spends too. While at peak the advertising industry was showing a growth of 25 per cent, it would be somewhere around 7 per cent in the first half of 2012. At individual agency level, while we have seen a growth on 40 per cent in 2010 and 25 per cent in 2011, in the first half of 2012 we would see a growth of around 15 per cent. But I think at an individual agency level we still can manage fairly good growth as India has close to Rs35,000 crore advertising expenditure hence the need of the hour is to get aggressive and lay claim to the bigger pie from that budget. This will happen from organic growth from current clients to acquiring new businesses. This growth will also come from making our offering robust.

     

    If one were to look at growth, then in our case, I would say that we have seen growth from our existing clients but growth from new clients or from new major initiatives have been significantly less. However, I would say that the mood currently is to be cautious.

     

    PR:

     

    NS Rajan

    NS Rajan, Managing Director, Ketchum Sampark

    While we have grown by about 20 per cent in the first half, we are witnessing headwinds gathering across various sectors which can in turn affect growth in these segments and consequently the PR business in the second half.

     

    Also margins could be under pressure in the coming months as the increased cost of servicing may not be compensated by incremental revenues unless the economic environment changes significantly which can lift up sentiment.

     

    [To be Concluded]

     

  • MxMIndia gets you reactions from industry stakeholders on the government's decision to postpone the digitization deadline for Phase I to October 31, 2012

    Can we achieve the October 31 deadline?

     

    By Shruti Pushkarna

     

    Under mounting pressure from various stakeholders, the government announced an extension of four months for the first phase of digitization of cable television. Digital Addressable System (DAS) will now be effective from November 1 in the four metros, Delhi, Chennai, Kolkata and Mumbai.

     

    A press release issued by the I&B Ministry read: “The Cable Television Networks (Regulation) Amendment Act, 2011 has made it mandatory for switchover of the existing analogue Cable TV networks to Digital Addressable System (DAS) by December 2014, in a phased manner. In respect of four metros of Delhi, Mumbai, Kolkata and Chennai, the digital switchover is mandated to be completed by 30th June 2012.”

     

    But towards the end in the press note, the ministry acknowledged that keeping ground realities in mind, the MIB is compelled to set a new deadline. The statement reads, “…keeping in view public interest and after intensive and extensive consultations, as well as written commitments from all the stakeholders, for fully implementing the regulations of TRAI, the Ministry of Information & Broadcasting has decided to modify the 30th June deadline for a complete switch over to 31st October 2012 for all four Metro Cities i.e Delhi, Mumbai, Chennai and Kolkata. All the TRAI regulations for DAS will come into effect from 1st November, 2012.”

     

    The extension was announced notwithstanding the pending matters before the Delhi and Bombay High Courts and the TDSAT. The Bombay High Court will hear the petition on June 21 and the Delhi High Court will hear the matter on June 25, which is also the date when TDSAT will hear a similar matter filed by LCOs and IndusInd Media & Communications Ltd.

     

    Soon after the announcement of the new sunset date, MxMIndia spoke to various stakeholders to get their reactions on the new timeline and to find out if October 31 is an achievable deadline. While some welcomed the government’s decision for postponement to November 1, others felt that the extension issued by the ministry is not enough for the humongous task at hand.

     

    MSOs welcome the govt’s decision, though some still unsure of achieving the deadline

    Ashok Mansukhani

    Ashok Mansukhani, Director, IndusInd Media & Communications Ltd said: “I think it’s a sensible development and it will help in smooth transition to digitization. The new date is completely achievable, it was fully discussed in the taskforce. I don’t know about Tamil Nadu since the government there is supposed to install the set top boxes but for the other three metros, certainly it will happen. It’s a welcome step and it was fully discussed in the taskforce and it’s a natural result of the taskforce deliberation.”

     

    JS Kohli, CEO, Digicable said: “We are happy with the postponement. Although it’s not a six month extension but yes we can deliver on the new date. We are satisfied with the extension.”

     

    JS Kohli

    Ravi Gupta, Independent MSO, Delhi said: “The new sunset date is good although it is two months less than what we were expecting. They should have given a six months extension, I still don’t think we can achieve the task by November 1. A lot of digital headends are under installation and integration is what takes time. I don’t think anyone from the ministry has done a detailed study of this process. No senior official from the ministry or from the TRAI has visited a digital headend. A minimum of six months extension should have come.”

     

    LCOs happy with the extension but feel four months not enough

    MR Srinivasan, General Secretary, Chennai Metro Cable TV Operators Association said: “It is good in a way because we are not yet ready because in Chennai only 2 lakh boxes are available. But now atleast we have some breathing time. Moreover, the government of Tamil Nadu is planning to start some MSO operation in Chennai, so it’s some relief and we have some time to plan ahead and be ready before the sunset date. Actually we expected an extension upto December but atleast we have got a slight relief, something is better than nothing.”

     

    Sanjay McGee, Local Cable Operator, East Delhi said: “Although it’s a good decision, in the last meeting between LCOs and I&B Ministry, Rajiv Takru agreed that four months extension was not enough. At first the ministry refused any extension, but when we urged on atleast three months extension, Rajiv Takru stated that if there has to be an extension then take atleast six months. But they have taken a middle path and decided on four months. They shouldn’t have announced the extension at this point, they should have waited till June 29. Now the consumer will not take the deadline seriously and the pace will slow down. If we keep working at the same pace as of today, then we might be able to achieve the new deadline.”

     

    Swapan Chowdhury, General Secretary, Cable & Broadband Operators’ Welfare Association, Kolkata said: “I am not satisfied because four months will not cover up the whole situation. Government might have given an extension but they have not considered any facts and figures. I say that because 70 per cent in Kolkata still don’t have set top boxes (STBs), so four months are not enough for deployment of such a huge number of STBs. It will not even happen on November 1. Maybe another 20 or 30 per cent seeding will be done up till the new date but what about the remaining numbers. In the June 8 meeting with the I&B Minister it was categorically mentioned that none of the government appointed nodal officers have checked the actual seeding position or the status of ordered material. Unless and until the government studies the ground situation deeply it will again fall back. The actual facts are different from what’s being presented on paper. They should have given an extension upto atleast Jan 1.”

     

    Broadcasters disappointed with the postponement, suggest on strict penalties for those who don’t adhere to the timelines

    Sunil Lulla

    Sunil Lulla, Managing Director & CEO, Times Television Network said: “It’s a complete disappointment. What is the guarantee that the new date will be held, when there is a date set by law, why should the date be changed? A lot of time, money and effort has gone by broadcasters in promoting and communicating the date and making sure consumers went along. The industry and the consumer suffers because there are some parts of the entire constituent which may not have adhered to these deadlines, may not have implemented the seeding of the boxes. This was announced on the net through a press release, the government hasn’t really notified us. I think it would have made sense for them to invite all stakeholders and agree on a new date if there was to be one and to a process by which these date wont slip.”

     

    Rahul Sood

    Rahul Sood, Head- Network Distribution & Affiliate Sales, NDTV said: “Basically LCOs were pushing for a Jan 1 timeline and broadcasters were saying that if you have to give an extension, it should be only for three months. So I guess they have taken a middle path by extending it upto October 31. The TRAI guidelines which came out on April 30 were such that within six months there has to be implementation of the same. I think that’s the loophole that MSOs and LCOs were quoting and asking for a minimum six months extension. So keeping all that in mind, I think ministry has taken this step. But if as an industry we have this discussion again on October 20, then it’s a real shame. There should be no excuses now, timelines have been extended, now there has to be a joint willingness to from all stakeholders to make sure this happens. While they have issued this date change, I think with that strict penalties and penalization code should be put in place as well for those who don’t adhere to the new timelines.”

     

    An independent commentator says new sunset date ill-conceived

    Dinyar Contractor

    Dinyar Contractor, Editor and Executive Publisher, Satellite and Cable TV Magazine said: “This is not going to work, this date is ill-conceived. There is no way that set top boxes can be procured and deployed in that timeframe even if the order is released today. As I’ve mentioned earlier, delivery time on set top boxes alone is around four months so this extension makes no sense except postponing one more extension. Any date prior to end of December is not realistic and is not going to resolve the problems or the issue, which is obtaining and deploying set top boxes. So I feel that the extension is inappropriate.”

     

  • They have slammed vested interests who were trying to create roadblocks

    Ensure digitised feed from July 1: Broadcasters

    By A Correspondent

     

    Television broadcasters have urged the government to stick to the deadline of June 30 for mandatory cable digitisation in the four metros and slammed vested interests who were trying to create roadblocks.

     

    Cable digitisation in India has been hailed as the break of a new dawn for the entire broadcasting industry and all stakeholders – viewers, cable operators, multi system operators and broadcasters will benefit from it.

     

    “By and large, the industry has welcomed this transformation, but it is unfortunate that there are certain pockets of vested interests that are trying to create roadblocks,” said Uday Shankar, president of the Indian Broadcasting Foundation and the chief executive officer of Star India. “We remain confident that the government, TRAI, the parliamentary committee and for that matter even the courts will not allow these isolated voices to jettison what now is a national mandate.”

     

    Cable digitisation will to allow viewers to get more channels and will give them the option of refusing channels that they do not want. Being digital, it will also provide better quality of sound and picture. For MSOs, this would mean better transparency and ability to get a clearer idea of the number of subscribers. MSOs will therefore be able to declare revenues more precisely. With high bandwidth at their disposal, they will now be able to offer value added services and improve revenues.

     

    But some cable operators have cited unavailability of digital set top boxes and urged the government to extend the deadline.

     

    “The deadline must and has to be met. If it doesn’t happen on time, the confidence in this transition will completely evaporate and investments will not come in,” said Sunil Lulla, managing director and chief executive officer of Times Television Network, which runs Times Now, ET Now and Movies Now channels.

     

    In the current cable regime, broadcasters have been finding it difficult to generate revenues and scale up. “Broadcasters, particularly news broadcasters, have been crippled with huge carriage costs and poor subscription revenues. Digitisation changes all that. We will have far more resources to put into content, which will again benefit the consumer a great deal,” said KVL Narayan Rao, president of the News Broadcasters’ Association and executive vice-chairperson of the NDTV Group.

     

    Digitisation will benefit broadcasters as they will no longer have to pay large carriage fees and will now be able to get better subscription revenues. In the run up to the deadline, over the last two months, many television broadcasters have been communicating the shift towards digitalization at least five times a day.

     

    “Yes, there will be some disruption during this process but this is a game changing transition for the industry in India,” said Mr Lulla.

     

    Source: The Economic Times
    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • A new notification issued by the regulator on Monday limited the amount of advertising on TV channels and disallowed any shortfall in a particular hour to be carried over

    Broadcasters slam TRAI notification to limit ads

    By A Correspondent

     

    Broadcasters and advertisers have slammed Telecom Regulatory Authority of India (Trai) move to limit the duration of television advertisements to 12 minutes in an hour, and accused the regulator of exceeding its brief.

     

    A new notification issued by the regulator on Monday limited the amount of advertising on TV channels and disallowed any shortfall in a particular hour to be carried over. According to industry estimates, this could impact advertising revenues of broadcasters by 15-40 per cent.

     

    “Trai has no jurisdiction in the subject. Advertising is governed by the Cable and Satellite Act and the appropriate authority is the ministry of information and broadcasting,” said Uday Shankar, president of the Indian Broadcasting Foundation, and the chief executive officer of Star India. “The regulator is overstepping its brief,” he added.

     

    According to Mr Shankar, the low revenues from subscriptions give broadcasters no option but to rely on advertising inventory and revenues to survive.

     

    An Indian Broadcasting Foundation official said an earlier government guideline stipulated that Trai could issue an advisory with regard to advertising but not a notification.

     

    Sunil Lulla, managing director and chief executive officer of Times Television Network, which runs Times Now, ET Now and Movies Now channels, too criticised Trai’s decision. “This move is completely ridiculous. Self regulation is the best regulation,” he said.

     

    “This move will have an immediate impact because right now there is no other big source of revenue for broadcasters,” said Rohit Gupta, president of Multi Screen Media, the company which runs Sony Entertainment Television. The IBF will appeal against this new regulation, he added.

     

    Barun Das, chief executive officer of Zee News, questioned the timing of the regulation at a time when the entire broadcasting industry was going digital. “We have a limit mentioned in the Cable Act. If at all there is a need for regulating duration of advertising, it possibly could have waited some more time for the digitisation process to settle down.” he said.

     

    Mr Das said his channel had voluntarily cut its advertising inventory by 30per cent earlier this year. “We realise that too much advertising is a deterrent to viewership. We were not driven by regulations, rather we were driven by market forces,” he said.

     

    Mr Das said the viewers had choices not only of channels but also of media platforms. “I am not sure if advertising volume needs to be regulated. I would tend to believe that too much advertising would anyway drive away viewers,” he added.

     

    Sale of television rights have become an important source of income for sports bodies such as BCCI but the restriction on advertising will adversely impact the ability of broadcasters to recoup their investments, forcing them to scale down their bids.

     

    Source: The Economic Times
    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • India's English speaking-population, urban and elsewhere, and the amendment to the Cable TV Networks (Regulation) Act make it a good time for an English movie channel, says Ajay Trigunayat.

    The Anchor: 5 reasons why it’s the best time to be in English movies

    By Ajay Trigunayat

     

    #1 India has the largest English speaking population.

    India has one of the largest English speaking populations in the world, and as a result has been a potential market for all things English! English enjoys the status of subsidiary official language but it is the most important language for national, political, and commercial communication. English speakers inIndiaoutnumber those in all of Western Europe, not counting theUnited Kingdom. And Indian English speakers are more than twice the UK’s population.

     

    #2 Amongst English channels, English Movie Channels have the maximum viewership.

    Amongst the English TV category, it is the English movie channels that comprises of 35 percent of the market share. This is the highest in this category. The English movie category also has a reach of around 27 percent of the total television viewers. These numbers definitely move the genre which was earlier seen as niche, to be highly influential.

     

    #3 English urban audiences.

    Yes, English is everywhere in India. Urban population: 33 percent of total population and 95 percent of all households have a TV. 2012 will also see Times Television Network launching new English channels in a bid to strengthen the overall channel bouquet. The timing could not be better at the pace which theEnglish Channelspace is growing.

     

    #4 Digitization.

    • Indiais riding on robust cable and satellite growth. The television household universe has grown from 134 million homes to 148 million homes over two years.
    • Within this cable and satellite has grown from 103 million to 126 million. The media and entertainment industry is at an inflexion point with digital being the buzzword. Rightly so, every segment within the media and entertainment ecosystem is getting impacted by digitization in a significant way.
    • Digitization, where the feed will be received through set-top boxes, is expected to be executed in phases and the four metros ofDelhi, Mumbai, Kolkata and Chennai have to shift to digital addressability by March 31, 2012.
    • Increased Digital penetration will lead to parity in audio-visual reception and experience. Thus, channels which are on hi-frequencies which has distorted channel reception will tend to gain in viewership.
    • With CAS being mandated soon, the carriage fee should go down and subscription revenues should take a leap.
    • Currently the digital viewership contribution to the English Movie Channels is 31 percent which will go up to 50 percent by the end of 2012.

     

    #5 Increasing footprint.

    Transition of viewership from 5 – 8 metros – 1 mn.+ markets: 35 markets as per 2001 census to 53 markets as per 2011 census

    • Having expanded the horizon from 5/7 metros to 8 metros: All 1mn.+ towns is the next big opportunity
    • With the perception change amongst the viewers’ mindsets and the recent news about Lok Sabha passing the second bill to amend the Cable TV Networks (Regulation) Act 1995 has opened newer avenues for the English movie channels.
    • With the target audience no longer residing only in the metros and moving into the Tier 2 and Tier 3 cities, there is an opportunity to penetrate into the smaller cities, thereby expanding the overall viewership.

     

    Ajay Trigunayat is the CEO, English Entertainment Channels, Times Television Network.

     

  • Industry executives and experts believe the consolidation trend will pick up momentum in 2012, separating the men from the boys in this highly splintered sector that is being increasingly hobbled by cost pressures and revenue challenges in a slowing economy

    Recent deals point to consolidation in media, say experts

    By Ravi Teja Sharma & Meenakshi Verma Ambwani

     

    Purveyors of news are rarely objects of news themselves, but India’s splintered media landscape has made news in the past two weeks. A flurry of deals or talk of more similar transactions have stirred up the sector in recent days, putting the spotlight on the possible motivations and some crystal ball gazing on what lies ahead.

     

    Last week saw a little-known chemical and fertiliser company Oswal Green Tech buying a 14.17per cent shareholding in New Delhi Television (NDTV) through two block stock market deals. Media reports said Mukesh Ambani-controlled Reliance was looking at buying into Network18, which runs CNBC India. Before him, younger brother Anil’s firm Reliance Capital increased its shareholding in UTV News, which runs Bloomberg TV, by buying out UTV founder Ronnie Screwvala’s 66 per cent stake.

     

    Industry executives and experts believe the consolidation trend will pick up momentum in 2012, separating the men from the boys in this highly splintered sector that is being increasingly hobbled by cost pressures and revenue challenges in a slowing economy.

     

    With more than 700 television channels in India and only few making money, experts believe consolidation in the industry is inevitable.

     

    “Consolidation has to happen. It is required,” said Mr Haresh Chawla, who recently announced his resignation as group chief executive officer of Network18 and Viacom18 after leading the company for more than a decade.

     

    One major problem for the industry is that it has been too dependent on advertising revenues, while subscription revenues have been elusive.

     

    Analysts say some signs of consolidation are already visible, as media companies cobble together bouquets of channels.

     

    “It is already starting to happen and going forward, media companies will look at building a portfolio of broadcast assets across genres, geographies and languages to create a national setup,” said Mr Jehil Thakkar, head of the media and entertainment practice at KPMG.

     

    The move towards regional channels, spread across geographies and genres, is triggered by the high growth in advertising revenues in the segment. Growth in advertising revenues in big cities has been around 12-13 per cent even in good times because of an inventory overhang, while regional advertising has been growing at more than 20 per cent for the last few years, say analysts.

     

    Analysts say this could explain why Network18 may be looking at Eenadu TV. “Network18 does not have any regional channels in its portfolio. This move will give them an entry into the fast growing regional market,” said one analyst. Buying Eenadu TV could give Network18 a bouquet of 11 regional channels.

     

    What may also be attracting new investors such as the Ambanis and foreign media companies such as Walt Disney is the promise of higher revenues and growth as the full benefits of digitalization kicks in. Collateral benefits of media ownership include access to content sources to power non-media business and potentially even some influence.

     

    In the case of Reliance Industries, which is setting up a national 4G broadband service, ownership of a media company will give it an edge over competition, with access to exclusive content from a bouquet of channels as well as web properties.

     

    The Cable Television Network (Regulation) Amendment Act, enacted two weeks ago, could help subscriptions finally become a good source of revenues for media companies, reducing their dependence on advertising. Today, a viewer pays as little as 50 paise to watch an hour of TV. Even this revenue does not reach the channels completely because of under-reporting by local cable operators.

     

    “This (the digitalisation law) will be a game-changer for the television business if well executed,” said Mr Sunil Lulla, managing director and chief executive officer of Times Television Network, which runs Times Now, ET Now and Movies Now channels.

     

    Meanwhile, some deals have already happened in the non-news segment, in anticipation of large changes in the sector. In July this year, Walt Disney Co said it is buying out rest of the 49.56 per cent stake in UTV Software Communications that it does not own from public shareholders and other promoters of the company for Rs 2,000 crore.

     

    “There is clearly a need for sellers to look at strategic investors. For the buyers, in the long term there is value in Indian media,” said Mr Nikhil Vora, managing director and head of research at IDFC Securities.

     

    India’s entertainment and media industry is estimated to grow at a compounded annual rate of 13 per cent to Rs 1,19,890 crore in 2015 from Rs 64,600 crore in 2010, PwC’s India Entertainment and Media Outlook for 2011 revealed earlier this year.

     

    The sector’s woes, notably because of high costs and low subscription revenues, coupled with the general weakness in the markets have cast a dark shadow over media stocks. The market value of NDTV stood at Rs 171 crore on December 21, 2011, the day Oswal Green Tech, formerly Oswal Chemicals & Fertiliser, acquired its stake for around Rs 24 crore.

     

    The company was worth Rs 215.66 crore on January 3, 2012, Rs 552.5 crore at the beginning of 2011 and Rs 3,300 crore at its peak in January 2008. Network18’s market value has dropped from Rs 1,540.7 crore on January 1, 2011, to Rs 535 crore as on January 3, 2012, while that of TV18 has dropped from Rs 2,122.4 crore to Rs 1,220.13 crore in the same period.

     

    The sector trades at price earnings multiple of 18.3 compared with nearly 19 for the telecom sector or 21.43 for the technology sector.

     

    While digitalisation will help increase subscription revenues and remove capacity constraints, it will also aid the process of consolidation in the sector by forcing smaller regional channels into the embrace of larger, pan-India players. Smaller regional channels are enjoying better advertising growth today, but after digitalisation they could face problems in getting themselves well placed in the line up of channels and may feel the need to be aligned with larger players either by selling out or through a distribution deal.

     

    “Larger players with a bouquet of channels will have more bargaining power with cable operators. Smaller channels will find it difficult to get into prime tiers,” said Mr Chawla.

     

    With valuations low, experts feel now may be the time for consolidation. “The overall multiples for media companies have been low for a while. This is a good time to buy. Broadcasting does present a good opportunity,” said Mr Thakkar.

     

    Source: The Economic Times

    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

  • Avinash Kaul will now be Chief Executive Officer ET Now and Zoom, and Ajay Trigunayat will be Chief Executive Officer, English entertainment channels

    Times TV boost for Ajay Trigunayat, Avinash Kaul

    By A Correspondent

     

    Times Television Network has enhanced the responsibilities of two of its senior personnel: Avinash Kaul, who will now be Chief Executive Officer ET Now and Zoom, and Ajay Trigunayat, who will be Chief Executive Officer, English entertainment channels.

     

    Mr Kaul and Mr Trigunayat will continue to report to Sunil Lulla, Managing Director and Chief Executive Officer (MD & CEO), Times Television Network.

     

    Announcing the new organizational focus, Mr Lulla said, “2011 has been a significant year of growth for Times Television Network (TTN). As the channels consolidate positions, it offers opportunities for talent to develop. Mr Kaul and Mr Trigunayat will bring new ideas, energy and passion for the network’s ambitious growth agenda. We wish them great success.”

     

    During the course of 2011, TTN’s revenue has grown by over 50 per cent, its reach has spread to 26 countries besidesIndiaand its channels are in leadership positions.

     

    Speaking on his appointment, Mr Kaul said, “‘Bollywood’ and ‘Stocks’ are deep passions ofIndia. I’m delighted to have a blend of entertainment and information as part of my mandate. I look forward to ensuring that ET NOW continues to consolidate its position asIndia’s premier stock market channel.”

     

    Mr Kaul was previously the CEO of Zoom and prior to that has worked with Fulcrum (Group M), Discovery Communications, Star, NDTV Media and Sahara One in strategic and management roles.

     

    Mr Trigunayat, commenting on his new role, said, “Movies Now has just about completed one year of stellar performance and I am looking forward to consolidating and growing the franchise of Hollywood entertainment for Times Television Network”.

     

    Mr Trigunayat was earlier Channel Head of Movies Now. Prior to joining Times Television Network, he has been in theMiddle Eastin an entrepreneurial capacity. He has also held the position of Business Head of the Zee English Channels bouquet, built brands and strategies for Lintas, Contract and Rediffusion and was in Sales at Pepsi.