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Spreading across regions is the mantra for news channels

Spreading across regions is the mantra for news channels

Author | Puneet Bedi Bahri | Tuesday, Nov 25,2008 6:42 AM

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Spreading across regions is the mantra for news channels

Increasing presence across geographies has become a mantra to capture a wider market. In keeping with this trend, Zee News is gearing for launch in the Andhra Pradesh and Uttar Pradesh markets. With an election year coming up, this strategy makes huge sense.

At present, in the language news space, Zee operates 24 Taas (Marathi), Zee Telugu and 24 Ghanta (Bengali). Speaking on the upcoming channels in Andhra Pradesh and Uttar Pradesh, Barun Das CEO, Zee News, said, “We have not yet decided what the UP channel would be called, but the Andhra channel has been named Zee 24 Ghantalu. Both are wholly owned by Zee News.”

Explaining how important a regional spread was for news channels, Tarun Nigam, Executive Director, StarCom India (North), said, “India is a country of multiple states and every state is a country in itself. Hence, regionalisation and customisation for local flavour is very essential for any channel.” On the advantages, Nigam Added, “Regional presence will only help them. It is a demand of every state. Zee and Star are getting ready for the times ahead. A wider portfolio gives you a better proposition and helps get more advertisers.”

Commenting on the potential benefits of expanding in the regional space, Das said, “I feel the regional market is the most expanding market in the media domain now, and currently, the entire regional general entertainment channels and news channels put together form the most exciting status of media. Together they come out with 44 per cent of viewership with 37 per cent advertising revenue share. It has grown from 36 per cent viewership share and 25 per cent revenue share four years back in 2004.”

He further said, “Regional expansion is what our business is all about today. If we talk about news, ideally we could have one news channel for every state. There is a restriction in GEC expansion because due to language differentiation you cannot possibly have a GEC in Hindi in UP. For the news expansion, one is not restricted by the language diffraction because the content composition is a differentiating factor for a local news channel. Ideally, we should have a news channel in every state in the country, but that would depend on the economic viability and prioritisation depending on our resources.”

As to why Zee was adopting a JV or franchisee model in some states, Das explained, “In those places which are not economically viable for us to expand now with a 24-hour news channel, we are looking for a franchising option. Where we don’t have to have equity participation, or we help a respectable business house to build, operate and transfer our 24-hour news channel operation. We franchisee our brand to them and we insure that our brand is protected by building it to the contract that the editor is on our payrolls. The editor is employed by us, but reimbursed by the franchisee owner.”

Chirantan Chandran, Partner - Client Leadership heading Mindshare North & East, observed, “Primarily what is happening across is that regional channels are becoming more important and they are growing at all levels. South side, these channels are doing extraordinarily well. All big players are now spreading in the regional space as that is where the growth is now.”

He further said, “These channels are experts in selling news in one market, Hence, it becomes easier for the channel to spread in other markets as well. Also, for the advertisers this is much more beneficial. They can work out various packages for different markets and make them more attractive.”

Talking about competitors, Das said, “In West Bengal, we have competition from Star Anando and Kolkata TV. In Maharashtra, there is Star Majha and IBN Lokmat. In Uttar Pradesh, there is Sahara Samay, while Andhra Pradesh is a very competitive market with several players. In the North we are very strong and Zee is a household name here. We are doing very well in the other markets that we are present in and it will not take us long before we emerge as a distinct channel in UP. That is what our expectations are. In Andhra, it will take time as we generally try to attain the No. 2 position and then take it from there.”

In times of economic slowdown how is Zee still expanding? Das replied, “This slowdown would rationalise the media sector to a large extent. Some companies have been too euphoric and have expanded themselves too thin without worrying about their future performance. This is not the case with Zee News and Zee Entertainment, as both have significant focus on the current performance, and all along, even when the economy was all gung ho. We found ourselves in a far more robust position because we haven’t stretched ourselves too thin. We are best placed to see through this downturn, which also offers an opportunity to expand at a very low cost. It’s a buyers market now, so any expansion will cost you significantly low than it would have cost you a year back. We would be going into expansion now after a thorough evaluation. It is the right time to be present in the UP market. We had planned the Andhra foray and had announced it six months back.”

exchange4media tried to take Star’s perspective and its presence in the Bengal and Maharashtra markets. However when contacted, Star officials declined to share details regarding their regional expansion plans.

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