TV channels take ‘bouquet’ route for consolidation

TV channels take ‘bouquet’ route for consolidation

Author | exchange4media News Service | Monday, Jan 01,1900 8:38 AM

TV channels take ‘bouquet’ route for consolidation

For the country's evolving broadcasting industry, distribution strength seems to be the critical factor that would determine survival and alignment of channels will be the passport to survival.

According to industry analyst broadcasters will increasingly align to acquire strength in a “bouquet”. The speculation stems from the recent development that saw Zee Telefilms Ltd (ZTL) take a majority equity stake in the comparatively small television broadcaster, ETC Networks Ltd.

Zee added to its bouquet ETC’s two channels — ETC Music and ETC Punjabi, taking its strength to 19 channels.

Industry analysts see value in the transaction for ZTL, with ETC's Punjabi channel in particular possessing a loyal viewership, courtesy the contract with the Shiromani Gurudwara Prabandhak Committee (SGPC) to telecast Gurbani for 11 years.

Prior to this, ZTL had entered into a 74:26 joint venture with Turner International (India) Pvt Ltd for distribution and trade marketing, whereby three Turner channels — Cartoon Network, HBO and CNN International — joined the Zee bouquet.

With these moves, ZTL has made clear its seriousness about distribution, a crucial input as the company tries to strengthen pay revenues.

According to analysts, as bouquet strength gains currency, stand-alone channels will have reduced chances of survival. A strong bouquet will be useful for times when direct-to-home (DTH) will be allowed.

At a more contemporary level, poor growth in revenues from advertising has forced broadcasters to align on the distribution front. According to recent news report carried by exchange4media, TV ad spend rose by a measly 10 per cent to Rs 294 crore in 2001.

According to a CII-Ernst & Young report on the media sector, coverage is constrained by the resistance of cable operators to the introduction of pay channels, ad-hoc pricing of channels by broadcasters and inadequacy of supervision infrastructure.

Arthur Andersen also believes distribution and delivery infrastructure will be among the key drivers of the entertainment industry, which includes broadcasting.

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