Reality seems to have struck the satellite TV channels after a boom year in 2000. That year saw a launch of more than 20 channels, pushing the total count for Indian channels to 70 plus. Some of them are now clearly finding the going tough. This is evident from this year’s trend of channels trying to hive-off or sells their stake. High on the channels looking for outside help is SABe TV, the flagship of Sri Adhikari Brothers, which is looking for a strategic partner and also Eros Network with its channels B4U Entertainment and B4U Music.
The company is looking at a dilution of up to 30-35 per cent stake depending upon the price and value addition offered by the investor. The channel’s TRP ratings have been steady with an exception of Aflatoon and Jab Khelo Sab Khelo.
The company is going through rough waters with its prime time ad rate for a 10 seconds spot being in the range of Rs 30,000-50,000 against its competitors ranging from Rs 80,000-140,000 and blockbusters commanding Rs 200,000 and upward.
Most of the top management, including the CEO and the heads of finance, programming, marketing and ad sales, have either left or are looking for a change. The company has decided not to consider new investments or purchases of equipment. Nor is planning to introduce new programmes in the near future.
Following SAB TV is Bharat Shah’s Bollywood Eros Network with its channels B4U Entertainment and B4U Music. The company is open to the plan of inviting a strategic partner, which can add values and synergy to the company. The company have been approached by several players in India and overseas, it haven’t yet initiated anything.
The TRP ratings for B4U Entertainment channel averages below 1.0 but the blockbuster movies are an exception. The channel has not picked up much since its launch last year.
Another company looking for a sale of equity stake is the Natelco group. Its company i2imedia, which last year took over two regional channels — Prabhat and Suprabhat — is also desperately looking at selling them.
All this is a clear indication that deep pockets are a must for the survival of a channel. For example, a recent study by ET Intelligence Group finds that the annual cost of running a Hindi general entertainment channel is close to Rs 100 crore. A regional channel costs about Rs 35 crore. Clearly, some of the new channels have been unable to garner revenues to match expenses.
The channel count is far from saturation point though; ETIG expects the total count to increase to 200 by 2005. So perhaps many more channels are likely to feel the heat in the near future.