Are Hindi movie channels economically viable?

Increase in number of channels, inflating acquisition costs & channels sharing titles, question the viability of the genre

e4m by Synjini Nandi
Updated: Jul 26, 2012 10:49 PM
Are Hindi movie channels economically viable?

The last few months have witnessed many players enter the Hindi movie channel genre. STAR India launched a movie channel, Movies OK on May 6, 2012. The channel was launched without the Star branding. The Network already has Star Gold in its bouquet of offerings. Softline Creations also launched its new channel Cinema TV on June 1, 2012.

These channels are sharing space with existing players such as Max, UTV Movies, Star Gold, Zee Cinema, Zee Premier, Zee Classic, Zee Action Filmy and B4U Movies to name a few.

Over the years, the challenges of the Hindi movie genre have only increased. Movie acquisition cost has been on a steady rise. The business has transitioned to a place, where there are contracts which do not allow exclusivity of titles in some cases, leading to similar titles to multiple channels.

This is in addition to the fact that Hindi movies genre has traditionally faced a problem in monetising GRPs (gross rating point) that the genre delivers.

Hindi movie genre GRPs is second only to Hindi GE (general entertainment). But the effective rate of the channels, in some cases, is lesser than a tenth of what a Hindi GE channel commands. The reason seen is the investment that Hindi GE does in original content and the exclusivity of that content. Hindi movie channels are typically known to telecast content that has been viewed during theatrical releases and the genre has usually followed the practice of telecasting older titles. Networks such as Star, Zee, MSM, have historically aired big titles on their GE channels.

While this practice has been challenged time and again, the attempt seen in 2011 by the likes of Star Gold and Zee Cinema appears to be a success so far. The channels also cut down on their breaks to up their ad rates and it had worked for them. A senior media observer cautions that while these specific movie channels are still able to command better ad rates given that they have premiered, and look to premier, blockbuster tiles, in most cases, the Hindi movie channel rates are similar to the pricing seen five years back.

Is there space in the genre?
Space in this movie genre is at the cost of someone else, said Hemal Jhaveri, General Manager, Star Gold and Movies Ok. He added, “The investments that are made in terms of acquisition costs of movies are huge and hence the break-even is over a few years. We launched ‘Movies Ok’ in May and it has changed the overall dynamics. What proves useful to us is the presence of multiple channels. More importantly, the success of the channel depends on its unique proposition.”

Star Gold has acquired movies such as ‘Dabangg 2’, ‘House Full 2’, ‘Bol Bachchan’ and ‘Son of Sardar’ post its success with movies such as ‘Singham’, ‘Bodyguard’, ‘Zindagi Na Milegi Dobara’ and ‘Ra. One’. Channels typically look to secure rights for seven to 11 years for key blockbusters, he divulged.

But for the long tail, the game is about aggregation. And those that are unable to deliver on that will find it tougher to survive the genre. The likes of Filmy and UTV Movies operate as a Network while in negotiations with agencies and advertisers. Some of the standalone channels look to ad networks to give them the advantage of audience aggregation to be able to survive the changing genre dynamics.

According to Neeraj Vyas, Business Head and Senior EVP, Max, though there is a definite space crunch in the genre, there hasn’t been any drop in its reach. This is an important genre and though fragmentation exists, consumption of movies would always be there, making it viable for the serious players in the longer run.

Multi Screen Media, the parent company of Max, has recently acquired rights for films such as ‘The Dirty Picture’, ‘Ladies vs. Ricky Bahl’, ‘Ek Main Aur Ek Tu’, ‘Paan Singh Tomar’, ‘Tere Naal Love Ho Gaya’, ‘Jannat 2’, ‘Tezz’, ‘Razz 3’, ‘Kya Super Kool Hain Hum’, ‘Rowdy Rathore’ and the most awaited movie of 2012 – ‘Ek Tha Tiger’.

Vyas added, “As far as high acquisition costs are concerned, recovery of revenue is important and this is only possible over repeat telecasts. It is important to give something back to the genre and that is how ‘Extra Shots Challenge’ happened within the fun entertainment genre.”

“There are different kinds of audiences for different movies. With high acquisition costs, channels look at repeat telecasts over a period of time to break-even,” added Anamika Mehta, COO, Lodestar UM.

Read more news about (internet advertising India, internet advertising, advertising India, digital advertising India, media advertising India)

For more updates, be socially connected with us on
WhatsApp, Instagram, LinkedIn, Twitter, Facebook & Youtube