G Krishnan CEO/TV Today The country's first 24x7 news channel Aaj Tak is going strong but TV Today's recent launch of headlines-only channel Tez shows that the market can be segmented smartly

Weepy widows and stoically-suffering sisters-in-law translate into an audience of 100-150 million (average television rating points in the teens) in India's Rs 12,900-crore television business. The Indian cricket team's indifferent exploits on screen, 100 million. And Bollywood blockbusters, 50 million (Hollywood ones, only 5-10 million). So, why is anyone who is someone in India's television industry (and lots of people who are, virtually, nobodies) rushing to launch channels in a genre that promises an audience of 30 million? Are they? Well, the simple math of launches and an aggregation of articulated intent would indicate so.

In the past six months, seven news channels have been launched, including Tez by TV Today (part of the India Today Group that publishes Business Today), Profit by NDTV, Fayda by Zee Telefilms, Awaaz by CNBC-TV 18, Channel 7 by Jagran Group, India TV by Rajat Sharma and out-of-the-blue-entrant like Total TV. And there are at least seven more that should be launched in the next six to eight months, an Asian news channel and three city-based ones (by Zee Telefilms, whose Chairman Subhash Chandra has decided, after fighting a bitter court battle with the Board of Control for Cricket in India over television rights, that "there is undue hype about cricket in this country" and will now focus on more "promising projects"), times now, a Bennett, Coleman and Company and Reuters joint venture, old NDTVhand Rajdeep Sardesai's channel, and one Bengali channel from the Sun Network. NDTV and star are also planning new launches, and the latter is "contemplating a foray into the English segment", according to Uday Shankar, CEO and Editor, star News. Print news is witnessing a renaissance of sorts with a clutch of new magazines and newspapers having already hit the market (or planning to), but it is news television, with its wide appeal (remember, India boasts a literacy rate of only 65 per cent) that is seeing the most action.

Prannoy-Radhika Roy Chairman-MD/NDTV Media With two well-regarded channels, NDTV 24x7 and NDTV India, in its portfolio, NDTV recently diversified into featurised business channel NDTV Profit

Uday Shankar CEO/STAR News STAR has just launched a Bengali news channel and Shankar says the company is considering entering the English news channel space

Right Fundamentals

The news television boom, explain experts, is only to be expected. "The general buoyancy in the economy, increasing literacy and awareness in rural markets, and a better integration of the urban population with the rest of the world", have all contributed to it, says Mahesh Chhabria, Co-head (Investment Banking), Enam Financials. And news channels, essentially being in the business of information dissemination, "have to be the biggest beneficiary of this kind of growth", says star News' Shankar.

If companies are rushing to launch news channels, it isn't just because of what is happening, adds G. Krishnan, CEO, TV Today, but what could. "Despite a stupendous growth in the number of television households in the country (from 59.4 million in 2001 to 108.2 million in 2005, according to NRS), television's penetration remains below 50 per cent," he says. Thus, only 51 per cent of the country's 213.1 million households have a television; the figure is more than 90 per cent in the us and the UK.

That untapped potential, explains Sunir Kheterpal, Head (Media and Entertainment), Yes Bank, "is a huge motivator for many players". After all, as industry estimates suggest, even the 50 per cent penetration translated into advertising revenue of Rs 5,000 crore and subscription revenue of Rs 7,000 crore in 2004. "Subscriptions and advertising are both on the lower side because of infrastructural problems," says Haresh Chawla, Chief Executive, tv-18, "but once these are addressed, revenues will grow at a faster rate."

The main bottleneck remains the issue of addressability; one sure way for television channels to turn profitable is to go pay, but if they do that, it is in the interest of cable operators to under-report the number of people subscribing to a channel; which, in turn, means broadcasters have only a rough idea of how many people watch their channels, and although airtime is largely bought and sold on the basis of TRPs, this does have a role to play in their ability to attract advertising and the rates they command. "That's a hit broadcasters will have to take for as long as addressability is not introduced in the industry," says Chintamani Rao, CEO, India TV. And so, companies such as TV Today continue to beam their channels free-to-air.

At a larger level, however, the advertising market itself will have to grow. India's advertising spend to GDP ratio, at 0.4 per cent, is amongst the lowest in the world. Even China boasts a corresponding ratio of 1 per cent.

Subhash Chandra Chairman/Zee Telefilms Turned off cricket by a long-drawn legal battle with BCCI, Zee's Chandra has decided to turn his energies to categories like news	Haresh Chawla Chief Executive/TV-18 CNBC is the clear leader in the business news category: TV-18 diversified its portfolio by launching a 'consumer-oriented' business channel Awaaz recently

Then, there's the decision of the government to allow 26 per cent foreign investment (in any form), against its earlier rule of 26 per cent foreign direct investment (FDI) in news channels. News, points out Farokh Balsara, Partner, Ernst & Young, is a "daily consumption product whose relevance is all the more enhanced in a growing economy". That could explain why foreign institutional investors (FIIs) and private equity firms are interested in news channels. For instance, private equity major General Atlantic recently acquired an 8 per cent stake in NDTV for Rs 116 crore. "Most media stocks have grown tremendously in the past one year," says Jigar Shah, Director, KR Choksey, a Mumbai-based brokerage. That shouldn't surprise anyone. The media industry (television and print) grew by 13.4 per cent in 2004-05 and the advertising industry grew at 13 per cent, according to tam Media Research, a firm that monitors viewership.

Low Cost, High Return

TRPs in the news television space generally hover between 0 and 1. "Yet, no genre on TV has so many players and such fierce competition," says L.V. Krishnan, CEO, tam Media Research. "There are far too many reasons for being in the news space, but the two most important factors are low entry cost and a higher return on investment," says Zee's Chandra. With subscription yet to become a viable source of revenue-"It remains a shaky proposition because of heavy leakages in the distribution channel because of lack of addressability in the system", says Krishnan of TV Today; "News ventures have not realised their full potential in the country because the content generated, be it for TV or print, is not yet fully paid for," says Bhaskar Das, Executive President, Bennett, Coleman and Company-advertising is the source of these higher returns.

Despite its lower viewership, news, as a genre on television, attracted some Rs 500 crore in advertising revenues in 2004, the second highest after mass Hindi entertainment channels, in a total market of some Rs 5,000 crore. " A comparison between tam Peoplemeter (for viewership) and AdEx (for ad share) numbers for the last five years also reflects that news is the only genre on TV whose stake in the ad pie has consistently been double its viewership share," says Atul Phadnis, Vice President, tam Media Research.

That could have to do with the quality of eyeballs that news attracts. Men remain the decision makers and breadwinners in most Indian households and, despite increasing walk-ins by women and teenagers, news largely remains a male phenomenon, explains Sandip Tarkas, CEO, Media Direction. And a major chunk of male-oriented advertising on TV goes to news; this is reflected in AdEx's analysis that shows that automobiles, financial services, telcos, and corporate image-building are the biggest advertisers on news channels.

The other important reason for advertisers to choose the news platform is the lure of an incremental reach at a very low cost. "News channels deliver a steady reach to a wider base of audience and that too, at a much lower cost," says Kalanithi Maran, Chairman and Managing Director, Sun Network, the biggest broadcast group in the south. The companies themselves have played it smart by making sure that airtime on news is the least expensive of all genres of television content. Ten seconds of airtime on a mass entertainment channel costs around Rs 2-3 lakh, on a cricket telecast, Rs 3-3.5 lakh, and a mere Rs 5,000-10,000 on a news channel. Apart from reducing the industry's dependence on the usual suspects (like fast moving consumer goods and white goods firms), this has made available an advertising platform to small advertisers, hosiery makers, small retailers, even tour and travel operators, who could never afford to be on television because of its prohibitive costs.

THE COMING EXPLOSION

Sun's Maran: Existing players can launch more channels cheap You ain't seen nothing yet," says Ashish Kaul, vice president, Essel group. his take: The current boom is not one at all; the real growth in TV news business will come in the next five to seven years, which will see the emergence of niche channels dedicated solely to sports, fashion, or film and entertainment news. And forget regional channels, there will soon be city and town-specific news channels. (Zee Telefilms is already planning to launch three city-based channels). Kaul isn't talking through his hat. Most executives in India's television industry agree with him that news offerings will get immensely segmented as penetration increases and viewership grows. Says Sunil Lulla, Chief Executive Officer, Times Global Broadcasting: "Already, the needs of the urban audience are different from what's being served. They need a different and more dedicated service." If there is one thing going for companies, it is that the entry cost in the news business is not too high anymore. "Those who already have an established network can go on launching additional channels at minimal expense," says Kalanithi Maran, Chairman and Managing Director, Sun Network. 24 today. 100 tomorrow?

News channels can afford to sell their airtime at lower rates, because for them, unlike cricket or mass entertainment, where content demands huge investments, it (content) is a reasonably low-cost affair. "News channels in the country are booming because of frequent elections. Elections generate highest TRPs. And for broadcasters, it's almost free content generation," laughs Sun TV's Maran.

The increasing number of news channels could result in the eventual commoditisation of content, but already, the larger players in the news business are working to differentiate their offerings. TV Today's recent headlines-only channel Tez (targeted largely at time-starved audiences in the metros), NDTV's features-driven business channel NDTV Profit, and TV-18's consumer-oriented business channel Awaaz are cases in point. As the Indian media market fragments further (see The Coming Explosion), it is likely that large firms such as these leverage their brand equity and distribution strength to launch even more focussed news channels. The boom, if the economic engine continues to chug, looks set to last.