Indian television's necklace states

By Anindita Sarkar , afaqs!, Mumbai | In Media Publishing | October 11, 2011
Regional media is still undervalued by advertisers. But, as more regional channels emerge, opportunities rise. Smaller India beckons.

Four years ago, Odisha had just two private TV channels -- ETV Oriya and OTV -- apart from the state-run DD Oriya. All of them were infotainment channels. In 2008, OTV decided to launch the first general entertainment channel (GEC) with Tarang, while OTV was converted to a news-and-current-affairs channel. All this while, the regular national Hindi GECs served the market apparently quite well.

In the two years from 2009, there was a sudden burst of activity. Today, there are 14 channels in Odisha, though, except for Tarang, most run as infotainment channels with news as an important component of the content line-up. What's up?

Odisha is probably mirroring what had happened in Maharashtra and West Bengal earlier. Twelve years ago, Zee successfully offered an alternative to Hindi in Maharashtra and West Bengal. Launched in 1999, Zee Marathi became an integral part of a Maharashtrian' s life, through its different genres of programmes, while Zee Bangla (launched in the same year) identified and met the entertainment needs of the Bengali community with a new-found audacity. Within the decade, the regional GEC market (Hindi-speaking, but not the south) grew from 15 GECs in 2000, to 83 in July 2011; ad revenues touched Rs 1,200-1,500 crore.

With huge investments in mining and infrastructure finding their way into Odisha, marketers are optimistic that this state is the next big thing. Gujarat is considered risky, but players are game -- Reliance Broadcast Network (RBNL) plans to roll out a Gujarati GEC under the Big Magic umbrella by the end of this financial year. Mahuaa is expected to launch a new GEC soon.

West Bengal recently witnessed the entry of Sananda (from ABP). Maharashtra continues to be on the regional GEC agenda of big national broadcasters. afaqs! finds out what is happening in the television space in the crescent sandwiched between the south and the Hindi belt.

All lit up

Odisha, as a market, has excited quite a few people. According to a 2009 study on investment trends across states -- conducted by the Centre for Monitoring Indian Economy (CMIE) -- Odisha is the second most preferred destination for investments. Power generation, mining, and iron and steel are the hot sectors throwing up more jobs and more disposable income. The services sector is the largest contributor to the state's gross state domestic product. Therefore, while national players in FMCG, cosmetics, and food and beverages are using regional TV to reach out to the masses, steel, power and aluminium are moving into the mass media space slowly.

Odisha's cable penetration has seen a significant jump of 65 per cent in both rural and urban areas in the last three to four years. According to media experts, the state's television business, which currently stands at Rs 220 crore in ad revenues (up by 30 per cent from 2008), is expected to witness faster growth. Says Ratikant Satpathy, associate vice-president, Odisha Television Network (OTN), "Odisha is not as big a market as Bengal or Maharashtra. Its population is just 41.2 million, and it is predominantly a print market, but the growth of television here, in the last three years, has been quite phenomenal."

Advertisers such as HUL and ITC, which only depended on spillover on Hindi channels to gain new consumers, have now started looking seriously at Odisha. Amit Ray, former president, Lintas Media Group, notes that brands that were once big in Odisha (Lifebuoy, for example) were using the spillover of channels such as Star Plus to target that market. "Oritel, Odisha's largest cable network had just launched OTV then. In came Superia, a soap brand from ITC, which had limited market traction. It went local and managed to capture a major share," he says. Gujarat, which has been a turbulent market for regional players, is evoking interest again.

Ups and downs

When Zee News Ltd (ZNL) decided to shut down its loss-making Gujarati GEC in 2009 after nine years, it seemed that the Maharashtra-West Bengal experiment wouldn't work elsewhere. The reason? Local viewers in Gujarat "consumed Hindi entertainment in very large doses."

However, today, there is a modest optimism that is making broadcasters give the state a second glance. Gujarat's populace does exhibit affinity towards its own culture -- what became popular in Gujarat were Hindi shows on national channels that were based on Gujarati families and culture (for example, SAB TV's shows).

"Markets like Gujarat consume Hindi programming more than the normal Hindi consumers do," says Mandar Dharmadhikari, managing director, Shri Siddhivinayak Creation, that specialises in broadcast marketing in northeast India, and events in rural Maharashtra. Agrees Navin Khemka, senior vice-president, ZenithOptimedia, "People from Gujarat seek entertainment in Hindi. But, that is because there haven't been investments in quality programming to match the standards of a Hindi GEC."

Media observers believe that while there is scope in this market, one will have to produce content that is at par with the national players. Also, the many known faces in national television soaps hail from Gujarat. It would probably help if these faces came on local channels, too.

There are others who differ. According to Anooj Kapoor, executive vice-president and business head, SAB TV, a regional language GEC in Gujarat can do well even if the quality of programming is not at par with the top national players. "If a player can accurately tap into the regional culture and flavour and serve it with the right dose of entertainment, the channel will succeed," he says. Currently, the region's TV ad revenue is Rs 30 crore. But, there are only two channels -- ETV Gujarati, an infotainment channel with estimated revenues of Rs 25 crore and TV9 Gujarati, a news channel with Rs 5 crore.

Back to where it all started

Indulgence, purchasing power, viewership pattern and a flourishing film industry. Factors that propelled Maharashtra and West Bengal. In both states, it's the regional GECs that are the highest GRP gainers. While it is Zee Marathi that rules the roost in the TV space for the former, it is STAR Jalsha that takes the cake in Bengal. Consider this: STAR Jalsha, which makes 41-42 per cent of the total GRPs in the Bengal GEC market, rakes in ad revenue of about Rs 200 crore.

It is not just the HULs and the P&Gs of the world who are interested. Local retailers (Anjali Jewellers), real-estate players (Sanmarg Group of Industries) as well as educational firms (Pathfinder Career Institute) are also using regional television to reach out. "Almost 40-50 per cent of revenue for these regional channels comes from local advertisers," says Khemka.

For the record, the average weekly GRPs that the Maharashtra and Bengal market generated (including Mumbai and Kolkata) in 2010 were 776 points and 1,455 points, respectively. Exclude the metros, and the GRPs stand at 765 points and 1,359 points, clearly indicating that there is a huge audience profile beyond these metros. However, the increase in ad rates is not proportionate to the GRPs delivered by these markets, complain many.

Five years ago, a 10-second spot for a Bengali GEC was priced at Rs 800-Rs 1200. Today, that has increased to Rs 2,500-Rs 4,000. Meanwhile, for a Marathi GEC, the 10-second spot price ranges between Rs 8,000 and Rs 10,000. Cinema, theatre and cultural festivals are a catalyst in this surge. The Marathi film industry is worth Rs 100 crore, while the Bengali film market is estimated to be about Rs 150 crore. The latter produces 45-50 movies a year, while the Marathi film industry churns out between 70 and 90 films. The ad rate of a blockbuster movie on a Marathi GEC can be as much as Rs 25,000-30,000 for 10 seconds. The film industry's talent can also be tapped for television.

Both states have a number of festivals all through the year. Not only does this provide content material, the festivals provide opportunity to showcase fiction, as well as reality shows. The same is true for a market like Odisha, which is quite strong on mythology and cultural storytelling.

Driving forces

The equation is simple. GRPs will earn your revenues, whether you are in Bengal or Maharashtra or Odisha," says Soumendu Das, business head, Brand Value Communications, the company that runs Rupashi Bangla.

Marketers believe that revenues can grow at 20 per cent since regional channels offer the chance to reach out to the masses while breaking the language barrier. "The trick is to embed content and the brand seamlessly into one another," says Ravish Kumar, former head, regional channels, STAR Entertainment Media. There is a push for local events and award shows across regional GECs. "Interestingly, a lot of ad money, which was being spent on BTL activities, is now finding space in these markets through channel activation and brand synergies," says Kumar.

The Bengali television market is estimated to be Rs 700 crore (KPMG 2011), of which Rs 415 crore come from GEC programming. In 2008, the Bengali TV market was Rs 450 crore. The Marathi TV market is estimated to be Rs 350 crore (up by 35 per cent from 2008), of which Rs 250 crore belongs to the region's GEC pie.

Regional pull and push

The biggest challenge that the regional TV space faces is inconsistency. In Bengal, for instance, extraction rates are low. Marathi channels, on the other hand, get a high yield. Along with fragmentation, the cost of content is rising. Monitoring is a constraint in the smaller pockets of the crescent. There are many areas that do not have TAM Peoplemeters. But, opportunities exist.

The Bengali news market, along with the Marathi movie and news genre, shows potential. Bengali news is the No. 2 genre after GECs. In Punjab (another state with a strong local language following), music is as big as general entertainment. "With their low cost of acquisition, we could expect more action in the regional news and movies," says Sudha Natrajan, president and CEO (chief executive officer), Lintas Media Group.

Regional media is still undervalued by advertisers. But, as more regional channels emerge, the opportunities rise. Smaller India beckons.

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