The business of news channels continues to grow at 8-10 per cent annually. The growth has helped small and medium advertisers.
Sample this: one-third of all television channels in India are news and current affairs. About 44 news channels in Hindi, English and regional languages beam into 71 million homes with access to cable and satellite TV.
About 10-12 per cent of total advertising money spent on television goes to news channels. This year, news channels will generate about Rs 700 crore (Rs 7 billion) in advertising revenues, compared to Rs 620 crore (Rs 6.2 billion) in 2006, according to industry sources.
The business of news channels continues to grow at about 8-10 per cent annually. In 2007-08, around five more news channels are expected to be launched, attracting investments worth about Rs 400-500 crore (Rs 4-5 billion). INX Media and BAG films are among those who are ready to launch news channels.
"In the fast changing socio-political environment, people want to know about their surroundings. Gone are the days of national news channels. Now region-specific and city-centric news channels are doing well in terms of attracting viewership and advertising," says an official of the Centre for Media studies.
But CNN-IBN's editor-in-chief Rajdeep Sardesai disagrees. "I think there is a lot of scope for English news channels. Of course, region and city-specific channels can work, but no one has tested their sustainability. Plus, premium advertising comes from English news channels, and CAS will further enforce the entire business model of news channels," he says.
News channels earn primarily from advertising revenue that is generated on the basis of ratings and perception. Only a handful of news channels are pay channels in the CAS notified areas of Mumbai, Delhi and Kolkata.
Leading the pack in Hindi news channels are Aaj Tak, Zee News, NDTV India, Sahara Samay and India TV. These channels are free-to-air. Among English news channels, CNN-IBN, NDTV 24x7 and CNBC TV18 top the popularity chart.
According to media buyers, while English news channels command advertising rates upwards of Rs 5,000 for a 10-second slot, for Hindi channels, the rates can be as low as Rs 700-800. "Leaders like Aaj Tak or Zee News are able to charge Rs 3,500-5,000 for a 10-second slot but that also depends on the time-band," says a media buyer.
The growth of news channels has also helped small and medium advertisers. Brands like No Marks, Ayur Herbal, and Luminous Inverters regularly advertise only on news channels.
"We have an annual advertising budget of about Rs 8-10 crore (Rs 80-100 million). We cannot buy slots on entertainment channels. So news channels are perfect for us to reach our target customers," says a brand manager of a herbal product.
Growth of news channels has happened alongside the growth of in the number of cable and satellite homes. Between 1998 and 2002, there were not more than 8-11 news channels beaming across 20-30 million homes.
The advertising revenue pie from news channels was not more than Rs 70-80 crore (Rs 700-800 million). Between 2002 and 2007, more than 30 channels have added to the
clutter.
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Regional news
Major news channels are now looking for growth in regional pockets of the country.
Zee Group's channels are registering 40-50 per cent annual growth in advertising revenue from regional language news bulletins.
According to industry estimates, local advertisers spend Rs 50-80 crore (Rs 500-800 million) on Telegu news channels in Andhra Pradesh. News in Marathi and Bengali also tends to generate advertising revenue worth over Rs 70-80 crore (Rs 700-800 million) annually.
On the booming regional language news segment, Harish Doraiswamy, CEO, Zee News, says regional language news, particularly in south Indian languages, caters to about 50 per cent of television viewers in 40 per cent of cable households, making it lucrative for advertisers.
"For advertisers, regional news delivers good viewership numbers, and we are leading in regional language news channels. We will launch our channels in Tamil and Malayalam soon," he says.
INX Media, the television media company promoted by Indrani Mukerjea, wife of ex-Star India CEO Peter Mukerjea, wants a strong regional language bouquet. "We will focus on regional languages, and news and entertainment both could be part of the programming mix on these channels," says Indrani Mukerjea.
Watch Out!
The foray of Delhi-based BAG films in the television space is likely to include a Hindi news channel. Peter Mukerjea's television venture INX Media will also launch an English news channel with journalist Vir Sanghvi as its chief executive.
Strong regional players in print media are already running news channels at city and regional level. More news channels alongside news-based shows on entertainment channels are likely to dominate television programming in the next couple of years.
Genres like crime, cricket and film-based shows on news channels attract advertisers. News channels are expected to raise Rs 150-160 crore (RS 1.5-1.6 billion) in advertising revenue during the ongoing World Cup cricket in West Indies.
But, analysts say that with India's early exit from the World Cup, advertisements worth Rs 20-30 crore (Rs 200-300 million) may not be placed with news channels.
"Television news has a wider meaning than published news. Look at business channels showing cricket-based shows. Brand endorsement and advertising industry gossip too makes for news on a business channel," says a senior media planner.
This means whatever piece of information that can hold the attention of a viewer surfing through the channels is relevant -- both for advertisers and for the programming point of view, he says.
