Indian television networks are increasingly looking to monetize their offerings in international markets. But what are the risks and challenges that come with their success?
Indian television networks are increasingly looking to monetize their offerings in markets abroad, but what are the risks and challenges they face? Do they, for instance, know whether children of NRIs will continue to watch Indian content going forward? Shobhana Nair talks to several stake-holders in the business to get a few answers
Circa 1990, it would have been extremely difficult for a nonresident Indian (NRI) to live in a foreign country with no access to his daily dose of entertainment or news in his own language. Cut to 2013, and the same NRI has so many options that he is spoilt for choice. Be it the idiot box or cyber space, he has ready access to TV content from his country, thanks to Indian broadcasters, who have taken giant steps to cash in on the emotional connect that NRIs seek with their homeland.
The oldest and until now the largest player in the scenario is Zee Network, with its strong distribution presence in 168 countries. The latest to join the bandwagon is Reliance Broadcast Network, which has strengthened its reach in Canada by entering into a strategic distribution tie-up with Telus & Cogeco for Big Magic International. Says Soumen G Choudhury, EVP, Reliance Broadcast Network, “For a broadcaster like us, which has a multi-media play, opportunities arise across media platforms and we are continuously exploring opportunities. This will ensure that our popular shows in India grow global and entertain viewers internationally too.”
All Indian broadcasters collectively earn a revenue of about Rs 1,000-Rs 1,200 crore a year from the international distribution and syndication business, including a few on-ground activities. They are now looking to increase this revenue by expanding their footprint in several ways.
WHO ARE THE PLAYERS?
The pioneer in this field is Zee Network. Zee enjoys a lion’s share– roughly 50% - of the business that Indian TV channels do internationally. But Zee is not stopping at that. In an earlier interview with IMPACT, Punit Goenka, Managing Director and Chief Executive Officer of Zee Entertainment Enterprises had said, “The biggest opportunity and challenge we are working on is to expand our territory from being a South Asian content-owner to addressing non-South Asians too.”
If Zee is running at its own pace to tap territories which are still unexplored, other broadcasters have pulled up their socks too. From Star Plus to Colors, every major network worth its salt has beefed up its international business and is trying to rake in the moolah. Gaurav Gandhi, COO of IndiaCast, a multi-platform Content Asset Monetization entity jointly owned by TV18 & Viacom18, says that the competition on foreign shores has shot up. “While the market has grown at an overall level, a lot of that growth has come from newer players like us and not necessary the legends. Given the phenomenal growth we have seen in our numbers in the last two years, it’s evident that we have eaten into the shares of other players.”
Rajan Singh, Executive Vice President for Star’s international television business, has experience in this domain for more than 20 years, having looked after the international business for Zee and Sony in the past. Singh says, “We are looking at all the markets and our vision is that wherever there’s a South Asian or Indian population in the world, my job would be to ensure that they have a Star network available to them. We have been quite successful in doing that in countries around the world.” He adds, “I am a very lucky guy because when I take my business around, I don’t have any programming cost. All I have is the technical and marketing cost, as the majority of the expenditure in terms of programming has already been accounted for in the Indian market.” With no production cost involved, it is definitely a happy situation to be in, but there are other reasons too that have made broadcasters excited about this source of revenue. Says Ashish Pherwani, Partner, Ernst & Young, “The Average Revenue Per User(ARPU) is much higher. In some countries, it is very common to pay $ 5-10 per channel for a month whereas our ARPU for 180 channels is roughly $ 5 for a month. Traditionally, subscription is completely recession and slowdown averse, which makes it a solid revenue stream for these Indian channels. I think that’s why they are focusing very hard on expanding it.”
INCREASE IN ADVERTISING SALES
If international subscription charges generate huge income for broadcasters, the other form of revenue for them is advertising sales. From niche offerings to mainstream ones, Indian broadcasters have definitely come a long way. Take for instance Star Plus in the UK. As per the British Audience Research Bureau (BARB)/Infosys+, Star Plus stands at Number 7 in terms of pay channels in the UK. Probably, this has given the advertisers confidence. “The model has changed… advertising is going to become a very important part of our international business. Around 10 years ago, 80% revenues were through distribution and 20% through advertising. In the United Kingdom, our model is becoming 60% advertising revenues and 40 % distribution,” says Rajan Singh. So one would see Indian brands like MDH and Daawat Basmati rice buying ad spots on these channels airing abroad. Anita Nayyar, CEO, Havas Media Group, India & South Asia, explains, “More and more brands are now finding Indian TV a viable medium to communicate with their target audience, which encourages purchases abroad and purchase, gifting or investment in India.” But in other markets like USA, it is still the other way round with 70% revenues coming from distribution and 30% through advertising.
CUSTOMIZATION IS THE WAY
In a bid to add local flavour, several channels have customized programming to entice the audience in that particular region. Multi-Screen Media had a weekend show called ‘High Life Dubai’ which was aired on Sony TV and had a successful run. Rohit Gupta, President, MSM was quoted, “Such shows are produced locally to give it a bit of a local flavour in that area. It is a good way to do it so that the audience feels that their channel is localized for that content.” Also going the customized way is Times Television Network. Naveen Chandra, Head – International Business, says, “With mainstream advertising dollars now coming into South Asian markets, localization is the future. Times Television constantly organizes a lot of local events to create greater local appeal - for instance, for the second year in a row, we are doing our Indian Budget: Middle East and APAC impact events in Dubai and Singapore. We also conduct a popular Great India Quiz show in countries outside, challenging people on how well they still remember India.”
Ever imagined King Khan mouthing a romantic dialogue in Arabic? Well, he does so in Veer-Zaara, the only difference being that the dialogues too are in Arabic. Zee went a step ahead with regard to custom-made content on their Arabic movie channel, Zee Aflam. The model is simple – buy the movie rights, dub in Arabic and monetize it. Says Goenka, “We had launched Zee Aflam meaning ‘Zee Movies’ in 2008. The channel has started making money in 2011 and it is the number three channel in all female categories in the kingdom of Saudi Arabia. The reason why we got into this market is because through market research, we found out that women in this world had everything except romance. And that’s why this channel is leading among female audiences.” Zee Aflam was followed by Zee Alwan in 2012, which airs Arabic serials and Indian serials dubbed in Arabic.
CONTENT IS KING AND IT PAYS TOO
The other money-maker is content syndication. Content syndication may happen in those territories where distribution is yet to pick up. Our neighbouring country, Pakistan, for example buys Indian content in huge quantities due to similarities in lifestyle and culture. However, the syndication process is not that simple as it may sound. Syed Nasir Ali Shah, Country Head of Apna Television Network, points out, “Due to increase in Pakistani channels, bidding for content has gone up and that’s a challenge for everyone. And we have to be careful about selecting the content too.” Content syndication may not bring in huge revenues for Indian broadcasters, but it is still a steady income for many as a hit show gets leveraged in as many countries and languages as possible. Hit sagas like Balika Vadhu and Uttaran, apart from being syndicated in Hindi language, is now dubbed in more than 16 languages including Hebrew, Russian, Serbian, Bosnian, etc. The audience base has expanded to such an extent that it is not limited to South Asian diaspora anymore. Even mainstream foreign locals are being targeted. Gaurav Gandhi says, “We have evolved to a very different level where we now sell our shows to mainstream audiences in many countries. The theory here is, you are talking to a set of homes who are not Indians. Just the way we consume foreign content in Indian languages, they are now consuming content in a language known to them.”
It’s not just broadcasters who are syndicating the properties that they own. Even production houses like Wizcraft, who reserve the rights for mega Bollywood shows like IIFA and GIMA to name a few, too are monetizing these big ticket events. In fact, for Wizcraft, international business forms 15% of their overall business. Sabbas Joseph, Co-founder, Wizcraft predicts, “International content syndication will always be important because markets have become wider and brands have a reach across the world. It will grow slowly, but it is bound to grow. It may seem like a very small portion of revenue, but over a period of time content syndication will also grow just as Cinema did.”
FLIP SIDE OF SYNDICATION
Like every field, there are certain grey areas in content syndication too. Ashwani Shukla, who owns Altair Media, has been a key mediator between several Indian and international channels for content syndication. Shukla discloses that monitoring of content is a major issue. “The flip side of such contracts is that you can’t monitor the content. All the deals are valid for a year, however, there are several foreign channels that breach this and continue playing the content without renewing the contract.”
But monitoring issues apart, the lure of monetizing content internationally is so much that even regional channels like Raj TV have hopped on to get their share of the pie. Nachiyappan Rajendran, Chief Business Development Officer, Raj TV says, “We are working on our web-based channel which will soon be launched. It will be on the lines of Live Streaming through subscription.”
So how does the future look like for broadcasters? Will it always be hunky dory for them? Says Pherwani, “There are Indians in several countries, but whether their children will continue to watch Indian content remains to be seen. At that level, there’s a risk to this business. However, by entering in these markets, what you have achieved is the understanding of these markets. By knowing what works in that particular region, you can tweak it accordingly for the next generation of Indians.”
According to him, it is important over the next 5-6 years that many more ‘Zee Aflams’ are created. “At the end of the day, what are these companies? They are story-tellers and they understand the Indian market. But do they really understand what works internationally?” he asks.
Now that’s a question worth pondering over, and when Indian broadcasters find the answer, they would have truly arrived on the global map.
WHAT BEATS THE BROADCASTERS
Gaurav Gandhi, COO, IndiaCast lists some key challenges for the international business of TV networks today:
Competition, clutter and bandwidth constraints:
Given the attractiveness of the overseas market, most broadcasters after reaching a particular size, scale or maturity in the domestic market look at expanding operations. However, the platforms (DTH or cable) in most markets cannot dedicate enough bandwidth to distribute all of these services. In many cases, the platforms don’t see the need to go beyond offering a few channels and covering only the most critical genres like GECs and Movies. Thus, for several channels and especially the late entrants, this reticence is a major entry barrier. And in many markets, very often when platforms add more services to existing packages/bouquets, they are doing so at the same retail price, forcing the channels to further divide the revenue pie to accommodate the new players.
Advertising opportunity remains limited:
For most Indian broadcasters operating in the international arena, subscription revenues tend to form the larger part of the revenue with advertising sales revenues playing more of a support role. The key reason for this is that ‘desi’ channels target only the Indian diaspora and not the mainstream viewers, thereby limiting the audience base. Given the small base, to keep cost per contact at manageable and affordable levels, the advertising-sales rates are extremely low. Secondly, as competition grows (and fragmentation increases), the same advertising dollar gets divided. And considerable slowdown in the global economy in the last few years and recessionary trends in many of the large markets for Indian channels have also impacted advertising revenues for Indian broadcasters.
This remains a huge and ever increasing threat to revenues for both broadcasters as well as platforms. Internet streaming as well as the proliferation of many illegitimate OTT services pose a huge danger for Pay TV revenues. These challenges, along with the growing cost of local operations in many overseas territories, make it a tough task for many broadcasters looking to expand their international operations.
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