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SECTOR FOCUS: MEDIA IN 2005
• Monopoly of The Times of India threatened in cash-cow Mumbai market
• Ex-NDTV brand-faces turned competitor, monopoly English news broadcaster facing toughest
challenge of its life
• Revival of radio attracts non-radio companies to acquire FM licenses in the second phase
• Relaxed policies to attract foreign investors; and technology to change the market in 2006
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Competition, new opportunities and growth marked the year 2005 for media industry. In the print media, monopoly of The Times of India in Mumbai was challenged by its arc-rival in Delhi market The Hindustan Times and a new name in the industry Daily News & Analysis (DNA) launched by the combine of Dainik Bhaskar group, publisher of one of the largest selling Hindi newspapers, and Zee Tele-Films, the broadcaster of entertainment, sports and news channels. On the other hand, the English news broadcaster New Delhi Television (NDTV) faced the toughest competition from its own former brands that had become the face of NDTV over the years. The end of the year also witnessed renewed interest in the FM radio business, as the government went ahead with the bidding for second phase of FM licenses.
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Television Media:
The dynamics of the Indian TV media market is changing fast. Every broadcaster is now more scared of remote control in the hands of the viewers, as the number of options before the viewer is growing, and of course the reach of remote control itself has gone up. Now, 75% of cable and satellite TV viewers own a remote control. The fragmentation of the TV audience has led to the launch of niche channels. Fragmentation has also been fuelled by the phenomena of multiple TV homes where intense viewing happens in parallel.
The major action was witnessed in the segments of kids channels, spiritual channels and news channels. Although the news segment has been growing rapidly for last three years, the year 2005 saw further fragmentation on this segment in the form of new business channels. New Delhi Television (NDTV) launched its business channel called NDTV Profit in the beginning of the year to challenge the near monopoly of CNBC-TV18, the joint venture of CNBC and Raghav Bahl’s Television Eighteen India (TV18). CNBC-TV18 launched its Hindi business channel called “Awaaz”. Zee group introduced its Hindi business channel “Zee Business” running on its Direct-To-Home (DTH) platform earlier to cable and satellite viewers. The counter attack by the CNBC-TV18 gave NDTV the shock of its life. CNBC-TV18 picked-up the most prominent face of NDTV after its promoter Dr. Prannoy Roy, the managing editor Rajdeep Sardesai to form a new company and launched the English news channel CNN-IBN to pose a direct competition to NDTV’s prime channel “NDTV 24x7”. Another threat to the dominance of NDTV in the English news market is coming from the Times Group, the publishers of The Times of India. Times Group had picked up Arnab Goswami, the former senior editor of NDTV only, to head its English news channel. Since CNN-IBN was launched in the mid-December of 2005, and Times is still on the test signal stage, the real impact of these competitors will be seen in the year 2006 only.
Kids channels have seen their market share rising from 1.5% to 5%. Their success may be measured from the fact that in certain areas, they are more popular than even music channels. Spiritual and religious channels have seen a surge in the veiwership. Currently there are nine spiritual channels with 1.5% market share of the total cable and satellite TV viewing. With the rising income levels, the market of television media is bound to expand further, as there are still 110 million Indian homes without a TV set.
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Radio Revived:
Radio has reborn in the form of FM. Although, some of the FM radio stations had to shut the shop in 2005, it was not because of lack of audience or lack of advertisement but the stringent revenue sharing under the license agreement with the government. It was the popularity of FM that led to the radio ad revenue growth of 45%. The ad revenue figures have attracted a large number of new players in the market that placed their bids for the second phase of FM licenses. With the second phase, the FM will move from the metros and big cities to the tier-2 and tier-3 cities, and the year 2006 may see a swift jump in the radio revenue. |
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Power Struggle in Print:
Mumbai, the economic capital of India and the biggest print advertising market, has been the monopoly of The Times of India for decades in the English newspaper segment and all the previous attempts by several media houses failed to penetrate in this market. But this time the attack is most severe than all the past attempts. Hindustan Times, the arc-rival of The Times of India in the all-India market entered Mumbai after years of rethinking and preparations. The other salvo came from a new combine of old media moguls of different segments. The market leader of Hindi newspapers Dainik Bhaskar group joined hands with the TV broadcaster group Zee Tele-Films to launch Daily News & Analysis (DNA) with big-budget high-decibel media-campaign, impressive design and printing quality and of course, poached reputed experienced journalists from all corners to produce quality content. The battle is long and the winner may not be decided in the year 2006. |
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Multiplex Boom:
First they caught the fancy of the moviegoers, and the trend caught the attention of investors. Yes, 2005 was also the year of multiplexes. Shringar Cinema and PVR Limited came up with their IPOs, while film production, distribution & exhibition company Adlabs Films was acquired by ADAE Group, the de-merged part of the Reliance Group now in the hands of Anil Ambani. |
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Deals in 2006:
With the softening of foreign direct investment (FDI) rules in the print and television media, the year 2006 may also see a lot of investment activities, but the complete dominance of the Indian partner in a foreign JV remains the norm of the industry by the virtue of Law. |
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Plethora of Technologies for Audio-Visual Content—Who Will Stay, Who Will Win:
Cable & Satellite (C&S) remained the dominant technology to offer TV or let’s say audio-visual content in the Indian homes in the year 2005, if we leave the terrestrial broadcast aside where only the public broadcaster Doordarshan is present. On the Direct-To-Home (DTH) service front, Zee and Doordarshan tried hard to penetrate the market but failed to make dent in the markets with a presence of C&S operators, because of pricing as well as lack of variety in content compared to C&S platform. The lack of variety was largely due to the reluctance of broadcasters to offer their content on the platform of a rival. With the TRAI intervention, the year 2006 may see the policy changes coming into effect to make it compulsory for any broadcaster to offer. This year C&S may see serious competition from the rival technologies like DTH, IPTV, Broadband and even 3G mobile phones. All these technologies are on the verge of getting certain policy approvals and reaching the critical mass to take-off. The newer technologies may also give the trend of fragmentation and localization a new dimension. Also, there are some talks of opening the terrestrial broadcast for private players that may change the dynamics of electronic media completely. |
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