LAS VEGAS: April 16, 2008 was a big day for India at the NAB Show 2008 when the India Super Session saw industry leaders present a picture on the potential, the challenges and the opportunities of the Indian entertainment economy. The panel took a detailed look at the television industry in India, discussing the challenges and opportunities of the medium.
Before the session kicked off, David Rehr, President and CEO, NAB, unveiled the NAB-commissioned Ernst & Young report on the Indian entertainment economy. Rehr reiterated the focus that NAB had placed on the Indian market in this year. He said, “The media and entertainment market in India is at $12 billion and is growing at a fascinating pace of about 18 per cent annually. NAB commissioned E&M a report on the opportunities and challengers, and today we are pleased to unveil the report.”
Taking over from him was moderator of the session Farokh Balsara, National Sector Leader, Media and Entertainment, Ernst & Young. Balsara took the audience through the growth in the Indian economy, informing that India’s GDP was growing at twice the pace of the mature markets. He further informed that the growth was more services-led than rural, as it had traditionally been. Another encouraging factor for India is that it is the youngest market with 70 per cent population under the age of 34. India is the second largest English speaking nation, urbanisation is happening at a fast pace, and there is propensity to spend today.
Balsara further explained that India was a high volume market, and so the large numbers made up for the low value per customer. The regulatory landscape, where foreign investments were allowed in a liberal manner, had played a crucial role in this growth too. He said that most of the content consumed in India was produced in India and the country was embracing digitisation in a significant way bringing in distribution efficiencies.
An under-served sector
In his address, Balsara said that the television sector in India, currently valued at $5.7 billion, was expected to double, and subscription revenues would drive this growth. The evolution of pay TV would mark this future. Another key aspect of television was the huge proliferation of channels. Balsara informed, “Almost 8-10 channels are launched every month. There is clutter due to that, but this is allowing niche targeting of audiences via content. Also, there would be consolidation over the next few years.”
STAR India COO Jagdish Kumar stated here that one of the main reasons that India would still see growth and even companies as old as News Corp in the Indian market were still investing in the market was because the country was under-served and under-penetrated. He said, “Around 45 per cent of our audience still don’t have TV. Of the 150 million households that do, only 110 million have cable and satellite access, and only around 5-6 million households are on the digital distribution platforms – the scope of expansion is huge.”
He further said that the Indian television advertising sales were totally under-served and its contribution to the GDP was far below what developed economies saw. Anurag Batra, Co-Founder and Editor-in-Chief, exchange4media Group agreed on this in his address and added, “Ad rates in India are the lowest in the world, and they should be corrected. However, we have a similar problem in valuation. By and large, Indian media companies are grossly under-valued.”
New age television, and the ratings dilemma
The experts also delved on programming, and even as Joint Secretary, I&B Ministry Zohra Chatterjee admitted that Indian policies were conservative on content, experts like Sunil Lulla, CEO, Alva Brothers, said that television in India was experimenting with various new genres. He said, “It’s no longer the same soap story. We have scripted formats, reality formats, dance formats, and we are seeing a big interest in many other new formats. Historically, broadcasters in India were risk averse, but today they are willing to make investments in these new areas.”
He pointed out that most international production houses had a presence in India today – either through a JV or a 100 per cent presence. He also spoke on new channels that showed international content dubbed in Indian languages – bottomline for broadcasters was to keep the consumer interest going.
Another interesting aspect that the panel delved on was audience measurement. Batra said, “There really are two Indias – the rural India and the urban India. Public broadcaster Doordarshan gives the reach in rural India, but DD is very under-leveraged. In the last few weeks they have woken up to the potential and they are doing big things. The rating today doesn’t measure rural India.” He cited similar examples on the fact that viewership of niche channels, regional channels, news channels and kids’ channels was growing, and mass entertainment was facing some hit. However, ratings today didn’t capture niche viewership appropriately either. In a similar vein, new distribution platforms like CAS and DTH weren’t measured. He added, “I’ve been told that the ratings system is addressing this. Plus, the Broadcasters Audience Research Council (BARC), too, has been launched, and this body would champion the right kind of audience research, but the industry has to pay for research, and we have to yet see what happens there.”
One area where the experts agreed that television was lacking on was capturing the vast youth market. Batra said, “Though the Indian broadcasting industry has kept pace with the changing needs, it has not been able to do so with the youth. Television has not become the primary resource for any of the youth concerns such as career and education, finding a partner or other interests. Other mediums like newspaper, Internet and radio have been able to do so to some extent.”
Jagdish Kumar agreed that broadcasters had understood there was an opportunity there and shared that STAR India was toying with their brand Channel [v] to reinforce the youth positioning of the brand. Kumar spoke on other problems as well, where unlike other economies which had moved from controlled to market driven style of working, India had moved from market driven to controlled. He said, “Our view is that media industry needs to flourish and needs to be freed of some constraints.”
Yet another problem that was discussed was of revenues not completely flowing to the broadcasters. A figure of $3.3 billion was not accounted for, and the experts agreed that digitisation would be a solution for this problem.
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