IMPACT Annv Spl: What next 7 yrs mean to television

Only larger players will survive in this race. Financially, small channels will have major issues on profitability, remarks SET President Rohit Gupta.

e4m by Rohit Gupta
Updated: Dec 22, 2011 7:32 AM
IMPACT Annv Spl: What next 7 yrs mean to television

Growth of large networks: Scale will decide the present and future and continue to favour the large networks in the television industry. For the next five to 10 years; television will continue to be the key medium for growth in the entertainment business. It will continue to outpace growth on any other entertainment sector, not only because of its reach and delivery, but also because it is an underpriced medium. For the next seven years, television will continue to rule media platforms. It will probably outpace web, print and radio. Within television, large networks would continue to drive the revenue share and small channels will face challenges to survive because of high distribution cost.

Network drivers: There are certain drivers for a network. These drivers are extremely crucial for every broadcaster. A channel should strive to retain its position in the race. A successful channel will have to reach and sustain itself at the top for a longer period to unable it to extract its true value. Therefore, there is always a need for a big driver for a network. By big, I mean that there is a need for something very large on the network which can drive its revenues even when economic conditions are not very favourable. Something very large would mean a Rs 1000 crore plus property, or a channel within the network as you need something substantial which drives the revenue for a network. The number of channels within the network doesn’t make any difference. Sheer increase in the number does not mean growth and survival in the long run. Largeness doesn’t mean presence of 25 channels. Small number of channels with strong leadership in the top three in the list would do the job. That is the driver of any channel. So, such drivers within the network are very significant.

Cost escalations: Investment cost will continue to grow over the next few years. So, organisations with deep pockets and better financial backings will only be able to survive this onslaught as margins would continue to diminish. The total cost - whether the cost of starting a GEC channel or acquisition of a channel - will be very high. Only larger players will survive in this race. Financially, small channels will have major issues on profitability as margins are getting eroded because of high input costs.

Regional players: Regional players have a crucial role to play as we move into the future as this space is growing at a good pace. Clients are increasing their spends in this market as a lot of new product launches are not necessarily pan-India.

As such, one can’t afford to be absent from this critical market. Any larger network needs very strong regional players to make a big difference in the future.

Retaining talent: People are the key drivers of growth in any channel. Retaining talent is a big challenge for any large network. Growth is only going to come through people. So, a good working atmosphere is vital. Television is a very competitive field and frequent changes happen in the industry, for which the network needs people who drive the idea of number 1 or 2.
It is sometimes easy for a channel to retain the top brass, but difficult to retain the mid-level talent.

Innovation is the key: Innovation is the backbone of any television content. For valuable returns on any delivery, the television channel has to be innovative.

How the channel structures the content is also extremely important. Constant rethink of what one is doing with the content of a television channel in terms of programming and production is critical.

(Rohit Gupta, President, Sony Entertainment Television.)

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