Can English GEC & movie channels survive the Covid & OTT impact?
As per industry watchers, there are still advertisers who want to put their money in the English genre audience and that with fewer players left it will be easy to tackle hurdles in the longer run
First came Covid-19 and then the spectacular rise of OTT consumption — together they posed a real challenge for broadcasters with the English genre bearing most of the brunt.
In July this year, Sony Pictures Network India (SPNI) pulled the plug of one of its oldest channels — AXN — in India. Even Star World is likely to go off air soon, though the network is still to make an official announcement.
The common factor for these channels downing shutters was decline in advertising and subscription revenue. Now, with the number of channels in the category shrinking does it mean the competition becomes less stiff and more profitable for the existing players.
As per media experts, even the road ahead for the genre is tough but channels backed by bigger networks are likely to survive in the long run.
According to Sujata Dwibedy, Group Trading Director, Amplifi India, Dentsu, healthy competition ensures quality of content. “For the advertisers, the pricing should also be right. While the limited options in content and inventory could lead to a rise in ad rates, it could also mean advertisers moving to other genres.”
The advertising scene for this genre has not shown much recovery yet. High decibel advertisers like auto, lifestyle, fashion, luxury and e-com haven't come back fully, and whoever is back has preferred to re-deploy investments on digital.
Sharing an interesting insight, Kishan Kumar MS, Chief Growth Officer and South - Head, Wavemaker India, said a sizeable chunk of male audiences have migrated to the news genre. “Personally, it is unfortunate to see HBO wind up in India. It's been such an amazing brand and there's a lot of nostalgia associated. It mustn't have been an easy decision.”
On what might work for this genre, K Srinivas Rao, National Director- Buying, MediaCom, shared that even though the category has shrunk a little there are still some advertisers who want to put their money here. “There are advertisers who want to reach out to that audience and want to put money and confidence in the genre from that perspective. Thus, this will benefit the players who are still with the category.”
Noting that viewers who earlier flocked to the English movie or entertainment channels have found a stronger liking in the OTT platforms, Dwibedy said that the dip in this audience segment has caused several advertisers to move away.
Girish Menon, Partner and Head, Media and Entertainment, KPMG in India, shared key information with regards to the reach of the channels. “The reach for English entertainment channels has dropped by 37% (Week 30-33) compared to pre-COVID levels during prime-time. English movies though, have seen an increase of 14% in reach during prime-time in the same period. Broadcasters have been facing challenges running English (particularly Entertainment) and niche channels in a profitable manner with shrinking subscription revenues proving to be strong headwinds. While advertisers continue to spend on these genres, they have been shifting their spends to digital media over the last couple of years to reach the desired target user base as consumption has shifted to digital.”
The challenges for the genre started post the implementation of NTO, say experts. Viewers were now required to pay for the entire package although they would want to watch a select few among those – this had a clear impact on the genre.
“To lower the subscription cost on set-top box or DTH, people started dropping the ‘good to have’ channels. The lead channels that have a strong backing of a large network and which could be bundled with the other driver channels were able to sustain through. But they too are feeling the pressure now,” Dwibedy added.
Rao believes that the biggest struggle for these channels is to get returns proportionate to the kind of money they were putting in for acquiring the content. This has put pressure on their balance sheet, he noted.
He, however, noted that the existing channels will survive in the longer run. “They have seen tougher phases earlier too. Now only with few players left it will be an easier road for them. With a strong network it will be easier for them to handle the entire portfolio.”
The major players in the category includes Times Television Network, which owns Romedy Now, MN+ HD, MNX HD, Movies Now (all of them are movie channels), ZEEL that run &flix, Zee Cafe HD, &priveHD (the network owns one GEC and two movie channels), Star India with Star Movies, Star Movies Select HD, Star World Premiere HD (Movie channels), Viacom18 - Colors Infinity and Comedy Central (GEC), and SPNI with Sony Pix. It is to be noted here that the number of English GECs is now less compared to movie channels.
In some scope for better days to come Kumar said in the long term with fewer players from larger networks the channels will be able to afford to bring content and platform efficiencies. “Having fewer players helps these brands to woo consumers better too,” he contended.
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