As advertisers shift their focus to regional markets to tap rising consumption, television broadcasters, too, are chasing regional channels, which are growing faster than non-Hindi television markets.
On Monday, Sony Pictures Television, a subsidiary of Sony Pictures Entertainment, said it purchased a 30% stake in Telugu television broadcaster MAA Television Network. MAA Television Network owns four channels, including MAA TV, MAA Music, MAA Movies and MAA Junior.
In January, the Mukesh Ambani-owned Reliance Industries struck a landmark deal with Raghav Bahl-run Network 18 in a unique arrangement that saw the latter buying out RIL?s stake in Eenadu TV?s news business and also purchasing a 24.5% stake in its Telugu general entertainment channel (GEC) and 50% in other regional GECs.
?When advertising shifted to regional channels, television broadcasters woke up to these markets,? said Jehil Thakkar, head (media and entertainment) at KPMG India. ?Advertising on regional channels is now growing at 15-18%, higher than the overall ad growth of 12-15%.?
Sony Pictures first ventured into regional television in 2009, when it acquired Channel 8, a Bengali movie channel and rebranded it as Sony 8.
?Sony had been looking to get into regional broadcasting for a long time and Andhra was the best test market,? a media analyst at a Mumbai-based brokerage said. Consultants and media observers say the tipping point in regional television was reached, ironically, during the economic downturn of 2008, when consumption tanked in the metros and tier-I cities while it continued to grow in the tier-II and tier-III cities. This led top advertisers like FMCG companies, consumer durables firms and telcos focusing on growth-oriented regional markets.
Regional channels are growing both in terms of advertising and viewership. According to industry estimates, 55% of the total ad volumes on TV was on regional channels, growing from 47% in 2009.
According to the 2012 Ficci-KPMG report on the media and entertainment industry, Andhra Pradesh is viewed as a test market by several companies, while Maharashtra is seen as a priority market for several advertisers. ?Regional ad spends are better insulated against market fluctuations,? said Subramanyam K, national head, ad sales and marketing, ETV Network, Andhra?s largest television company.
Regional channels also command the highest share of overall TV viewership, with 33.4% of viewers watching regional channels followed by 27.4% watching Hindi GECs, data released by television audience measurement agency TAM Media Research shows.
The focus on regional channels began in 2008, when GECs expanded to these markets. Star India launched Pravah in Marati and Jalsa in Bengali and later formed a venture with Kerala-based Asianet Communications, which owns non-news channles Asianet and Asianet Plus in Malayalam, Suvarna in Kannada and Sitara in Telugu.
Later, in 2010, UTV Action launched a Telugu channel and Discovery India launched a Tamil channel. Discovery recently announced the launch of a kids? channel in six Indian languages. Other infotainment channels, such as History TV18 and Fox Traveller, have successfully launched multiple language feeds in 2011.
?In the next two years, smaller independent channels will join big networks and the broadcast industry is likely to witness the emergence of four to five strong pan-India networks,? said Farokh Balsara, media and entertainment leader for Europe, India, Middle East and Africa at Ernst & Young.
The top pan-India television netoworks could be Star India, Network 18 Media, Sun TV Network, Multi Screen Media and Zee Entertainment Enterprises. The five networks together command 80% of the television advertising pie.
