Content acquisition a double-edged sword for English GECs

The cost of acquisition ranges between $5,000 & $8,500 per show per hour, but monetisation & profitability depends a lot on the global popularity of the show and the network premiering it, say industry experts

e4m by Abhinav Trivedi
Updated: Jan 9, 2014 9:28 AM
Content acquisition a double-edged sword for English GECs

When it comes to English entertainment, Indian channels rely on imported international content. Most of them compete to acquire the best property which has been a hit worldwide. Some Hindi GECs, too, have acquired rights to some international properties and adapted the content for the Indian audience.

AXN, Star World, FX, Fox Crime, Zee café, Comedy Central are the main channels in the English GEC category. Star World recently launched its HD feed, called Star World Premiere, which premieres content close to the launch in America.

Profitability factor
What is the cost of acquisition of such shows? How does the economics of the channels work in this case? Most of the channels we spoke to refused to talk about the business aspect of the shows. Senior sources in the industry though have suggested that the channels in the English GEC space usually work on the two parameters of content which is: ‘Current’ and ‘Library’. Per show per hour cost ranges between $5,000 and $8,500. If the content belongs in the ‘current’ genre, the cost is close to or in some cases beyond the upper limit, while if the content is in the ‘library’ genre, the cost is closer and at times even below the lower limit.

Usually the shows are profitable, but the monetization game depends a lot on the kind of network buying it and also on the kind of property. If the content is from the current equation, the cost of acquisition, marketing it locally and programming it are also high. These costs on the library content are subdued are or are relatively less. Post digitization the viewership of English GECs has increased and therefore it is expected that the subscription revenues will start coming in. But beyond this, the advertising revenues have a key role in making the projects financially viable.

But what do media planners look for when they invest on behalf of their clients English GECs? “One does not expect huge ratings from such shows. But relevant eye balls and the buzz around the show in India is a key to investing on international properties. Therefore, the profile of the show, reputation matters. I would say that the shows are profitable for the channels,” said Satyajit Sen, CEO, ZenithOptimedia.

Another senior media planner on condition of anonymity mentioned, “When one invests on English shows, the segmentation is very important. For example, sitcoms will be treated differently from drama or reality show. Apart from this if a popular show is aired time and again, the popularity of the show drive revenue. This happens mostly in case of sitcoms. Drama series has a craze when it is premiered first time, and subsequently the value reduces. Ratings do not drive money here as the target group is different as compared to the Hindi GECs.”

Although ratings do not matter a lot in this space, observers have also mentioned that the English GEC space is dominated by top three players. They acquire the best content and also command right pricing. Channels at number four, five and six do not get big share of the ad-pie.

Which content are acquired

The channels in the English genre space have a defined audience profile. So most of them acquire content based on their target profile they cater to. As per the channels they don’t go for the popularity of any show, but the popularity of those shows which caters to their audiences.

Most of the shows being currently aired on English Entertainment channels are acquired. Sunil Punjabi, Business Head, AXN said, “Right content acquisition is very important for us. It has to fit with the brand image. We promise our viewer adrenaline rush. Therefore, even if the content is good but does not match our profile we don’t go for it. The loyal viewer has to be taken seriously. Our TG is entertainment oriented as skewed towards male.”

Anurag Bedi, EVP and Business Head, Zee Café, said, “We know the pulse of the viewer and what he wants. Our core TG is 15-24 SECAB who keeps coming back for the latest seasons of extremely popular shows. Our endeavor has been to scout for shows that resonate well with this TG. This however does not mean that we alienate the rest of the age groups and genres.”

Kevin Vaz, Business Head, Star World which also has channels like, FX and Star World Premiere HD added here, “Our audience has the maximum skewness towards drama, hence we are keen to acquire shows in that category. We acquired 26 news shows in September 2013. When we chose shows, the audience profile matters a lot. Our core audience would be up-market English speaking people who like global content.”

Digitisation is likely to change the game for this genre. More viewers will be sampling the channels resulting in more subscription in the future. It would be fair to say that the cost of acquisition of shows depends hugely on the currency fluctuation in the financial market. As the TG expands the acquisitions are likely to increase, but English GECs face a huge threat from online piracy and crowdsourced portals. By the time shows are premiered in India, they have already been watched online or by downloading. Hence, in the future the timing of the premieres will also matter. The acquisition cost, therefore, is likely to increase.

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