Reality check for TV channels
Is the TV boom over? It is certainly beginning to seem that way. In the English news space, only the Big Three (NDTV, Times and CNN-IBN) continue to rule the roost. Though Headlines Today has improved enormously, it has still to crash into the ranks of the Big Three. None of the new channels seem to have made an impact. And even then, I doubt if a single English news channel is making a profit. That’s why they are all cutting back, shedding staff and slashing salaries.
In the Hindi space, a virtual bloodbath is under way. Not one of the new channels that were launched in the last 18 months seems likely to survive. All of them are bleeding heavily and many have ceased operation.
Most interesting of all is the Hindi entertainment space. Two years ago, the conventional wisdom was that it was only a matter of time before Zee overtook Star Plus. Then, people began to say that we were heading for a situation where all the channels would have roughly the same share of a fragmented market with one being slightly ahead one week only to lose the top spot the following week. This hypothesis was altered again once Star convincingly beat off the threat from Zee. Now, people began to say that the top channels would continue to flourish and that there was no room for new entrants.
Over the last few months, even that view has been discarded. The spectacular success of Colours, which is now a serious threat to Star Plus, has demonstrated that there is always room for the right kind of new entrant.
On the other hand, it’s beginning to look as though there is no room for the wrong kind of entrant. Of the new channels, 9X has collapsed and Real has got off to a poor start. Real’s first week GRPs are significantly lower than the launch GRPs for any new channel, with the exception of 9X.
Sahara and Star One muddle along while Sony faces so much turmoil internally that it is hard to see it as a serious player in the months ahead. Even NDTV Imagine has not lived up to its early promise.
Of the proposed new launches, not one is likely to go ahead. Even Anil Ambani’s Big TV has put its plans on hold. Other software companies that spoke of entering the entertainment channel space have retreated.
What went wrong?
Well, my view is that many of these channels recognize that they had no hope of breaking even in the foreseeable future. They knew that the TV market was over-crowded. But it was the stock market that interested them. They believed they could float their companies, sell shares to a gullible public and cash out quickly.
The recession has ended that dream.
A fallback plan was to sell shares to a foreign entertainment company. Ever since Disney came in and bought channels from UTV, entertainment bosses have believed that all you need to do is to create a channel. Some foreigner will then come and buy it from you at a profit because all foreign companies want a piece of the Indian market.
Sadly, the foreign companies no longer have the money to buy out any Indian channels.
So, what happens next? More bankruptcies; more blood-letting; and more lay-offs, I fear. The future is bleak.
Two months ago, I ran into a fund manager I know on a Jet Airways flight. Did he regret his TV investments now, I asked.
Oh, absolutely, he said. Quite apart from the fact that he had invested in the wrong people, he had now come to the conclusion that TV was a bad investment.
So, he was out of media?
Not quite, he said. He was now looking at print, which was a much better investment.
So, who knows? Perhaps TV’s loss is print’s gain!