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Should Zee Entertainment launch a second GEC?

29-January-2007
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Should Zee Entertainment launch a second GEC?

Zee Entertainment is planning to add one more general entertainment channel (GEC) to its bouquet. As of now, there is an internal discussion on this plan. Joy Chakraborthy, EVP, Sales, Zee Entertainment Ltd, said, “We are still evaluating this idea. It is strong on our radar. We are looking at the cost benefit analysis and then will take a decision on this.”

What is the media opinion on a flanking channel strategy? We have seen STAR India launch STAR One in November 2004. Today STAR One has arguably worked or not worked depending on what the media discussion is about. Sure enough, the channel created a brand for itself and some shows like ‘The Great Indian Laughter Challenge’ and ‘Nach Baliye’ delivered good numbers for the channel. Today, there are weeks when the channel beats Sahara One and Sony Entertainment Television also in the Hindi GEC space.

On the other hand, STAR One still doesn’t have other shows to talk about. The likes of ‘DON’, ‘Kya Hoga Nimmo Ka’, ‘India Calling’ and many others didn’t deliver for STAR One. The channel’s TG was changed from the youth and upmarket to mass audience. Though it has seen an increase in revenues in the last year, this doesn’t appear to come at the cost of other channels – the likes of Zee TV did grow.

If the SET example has to be seen – the case was different here because a whole new channel wasn’t launched. SET India acquired the then humour channel, SAB TV, in 2004. The channel was re-launched as a GEC channel in 2005 and again for a separate audience. Then SAB changed its identity again and addressed the youth as well. The channel has picked up in ratings in the last year, but not enough to make a mark yet.

In the case of Zee, it is learnt that the model of the new channel, which some call ‘Zee Next’ and some call ‘GeNext’, is exactly that – a channel meant for the upper SEC in the youth TG.

Coming back to the question – Do flanking channels pay?

Chakraborthy said, “Theoretically it sounds good, but in the practical sense, flanking has yet to deliver. GEC is here to stay and each flanking channel should have its individual identity. To begin with, I don’t think flanking is the right word.”

He explained that with its own unique programming, a flanking channel should be able to take away shares from the leader channel. He also elaborated on the rationale why players thought strategy at all. He said, “Today, maximum broadcast revenue is taken by GEC and we hear more launching in this space.”

He cautioned, “Sure the share of the pie is high in terms of revenues, but then people should forget that the cost of programming on GEC is also the highest. Hence, venturing in this space means a toll on everything, including resources. Can you make profits in such a scene? It’s not easy. Take the classic example of STAR One.”

Nandini Dias, VP, Lodestar Universal, has a slightly different point of view to offer. She said, “I don’t know how much of a comparison can be made between STAR One and Zee’s new channel. STAR One was launched because then it appeared that new audiences were ready to make a change and it made sense for the same broadcaster to offer the second choice. That way you kept the audience and hence, the revenue within the same group and that makes sense. As for STAR One, the game is still on for the channel.”

Pradeep Iyengar, EVP, South and West, Carat Media, said, “In the long run, it makes sense to have a second channel. STAR One didn’t have much to offer except for its lead shows. It didn’t really eat from the other channel’s revenues or audiences given that other players have also grown. However, a few years down the line, it just would make a lot of sense to have a second channel.”

According to Dias, the new distribution systems also played a key role today in these decisions. She said, “With CAS and DTH coming in, it makes sense to give new offerings from the same group. A second channel helps then.”

However, a second channel does mean a division of focus and resources. Said Dias, “Yes it does, but fragmentation is also a reality. If someone has to move, might as well move him to another channel in your bouquet and keep the audience or advertiser in the group.”

Evidently, our industry does believe in ‘the more, the merrier’.

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