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Rediff.com  » Business » DD gears up to be self-reliant

DD gears up to be self-reliant

August 21, 2006 11:29 IST

Doordarshan may no longer depend on public money after an aggressive revamp in its content and advertisement strategy.

The public broadcaster which had a gross revenue of Rs 960 crore (Rs 9.6 billion) last fiscal, up 81 per cent from Rs 530 crore (Rs 5.3 billion) in 2004, is set to break even by 2008, a feat unthinkable till a few years ago.

The broadcaster had a net revenue of Rs 800 crore (Rs 8 billion) while its costs were roughly Rs 1200-1300 crore (Rs 12 to Rs 13 billion) a year.

"If the growth momentum continues for the next two years, we could become self-sufficient and not rely on government funding anymore," said Naveen Kumar, director general, Doordarshan.

About his plans to scale the high revenue graph needed to break even, Kumar said, "One way would be the long-term ad contracts where we tie up with big advertisers. This strategy will bring in assured revenues as well as lure small advertisers. We are also planning to popularise DD Sports in a big way. This could be done by aggressively marketing the sports properties that DD has and bidding for the exclusive rights of others in future".

DD has already tied up with big advertisers like Hindustan Lever, Procter & Gamble and Dabur for a year-long advertising contract for sums that could contribute 25-30 per cent to DD's kitty.

For a free-to-air broadcaster like DD, which procures nothing by way of subscriptions from consumers, these arrangements could boost its revenues substantially.

As for DD Sports, Kumar said the content procurement does not have to be in cricket, where prices of exclusive properties are exorbitant, and could instead be in events like tennis, badminton and hockey.

"We already have Winter Olympics, the next Asian Games, Commonwealth games and the Olympics. With aggressive selling, our ad revenue from these can touch Rs 50 crore (Rs 500 million)," he said.

Another major revenue booster would be the policy of "self-financed commissioned" programmes. Under the new policy, DD will have proprietary rights over the product and the producer, who will be assured a fixed sum.

"We develop a large library with royalty returns and have completely done away with marketing middlemen. We sell ad slots and easily net Rs 550,000 per episode of a serial after paying Rs 350,000 to the producer," said Kumar, adding that DD was now asking its regional channels to follow suit.

Earlier, DD charged the producers for merely buying the airtime while the latter produced, owned and marketed the content.

Even though its overseas plans are being firmed up, Doordarshan is looking to start operations in the US.

A deal is in the offing with Vijay Amritraj's company, First Serve, for providing, on a non-exclusive basis, three DD channels -- DD India, DD Bharati and DD News -- on all 3G mobile phones. This tie-up could get DD about $3 million over the next five years.

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Bhuma Shrivastava in New Delhi
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