Rupee devaluation makes overseas content acquisition costlier by 20%
Depreciation in the value of Rupee is resulting in less content being acquired for the budget allocated in the beginning of the year. Costs have escalated by 20%, say experts
Although the appointment of Raghuram Rajan as the RBI Governor has instilled a lot of hope and optimism in the market, which has responded with a slight surge in the value of the Rupee and increase in the value of stocks, the devaluation of the INR by more than 20 per cent since January is taking its toll on the broadcasting industry. Industry experts predict that the content acquisition and syndication cost of overseas content have escalated between 18 to 24 per cent.
Various broadcasters such as Colors, STAR India, ZEE, and MSM showcase their channels in European and American markets. On the other hand, major English GECs and English movie channels in India source their content from overseas. Experts reveal that cost of content acquisition has gone up significantly for the networks, while in cases where broadcasters showcase their programmes overseas, their earnings have been boosted in the present scenario.
“Because of the fluctuation in the value, less content could be acquired as projected, at a cost allocated in the beginning of the year. Acquisition cost has gone high because of the surge in the value of the Dollar. The value has gone costlier by 15 to 20 per cent,” said Sangitha Iyer, Business Head, History18.
“I think the cost of content acquisition has gone up by 20 to 24 per cent. But that would be for channels that source direct content from overseas. For broadcasters like ours, HBO Singapore buys the content library for the entire Asia-Pacific region. I would agree that the budgets have been impacted for English GECs or for that matter any channel that sources content library from outside, but the numbers would vary from one channel to another,” said Monica Tata, MD, HBO India.
Experts share that networks that are buying satellite rights to showcase their channels in the European and American market also have to pay an extra cost for syndication, but that value is nullified as the channels are earning in Dollars. “The syndication cost has gone up by almost 20 per cent,” said Shimit Mehta, an independent media analyst. He further added, “As such, there is not much difference in the supply and demand. None of the broadcasters can do much about it. For that matter, it is the case with every industry.”
It is believed that English GECs are likely to be most affected from the devaluation. At the time of filing the report, no major English GEC had responded to the queries made by exchange4media. Saurabh Yagnik, Business Head, Sony Pix said, “Our acquisition cost goes up with the same rate the rupee devalues. So, it would be safe to say that if earlier we used to acquire content at Rs 100, it now costs more than Rs 120. The license cost for the content has gone up by 20 per cent.”
Hindi GECs will definitely not suffer as much as their English counterparts. In fact, they only will gain from the current market environment as they do not acquire content from overseas; players such as ZEE will see an increase in revenues because of their strong distribution network that will fetch them Dollars from abroad.
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