Increased competition in the general entertainment space and stagnant ad rates lead channels to explore opportunities in licensing and merchandising.
With advertising a little less robust than last year and television ad rates not showing any sign of climbing up, thanks to viewership fragmentation and increased competition, the Hindi general entertainment channels are tapping non-advertising revenue streams to shore up incomes. This includes content-repurposing, overseas subscription, and licensing and merchandising.
The home video of NDTV Imagine's Ramayan will hit the market before Diwali. The television channel will release the mythological series in three- to four-volume VCD packs. Around the same time, Saroj Khan's dance show, Nach Ve Le, will also be available on VCDs for viewers to learn Bollywood dancing.
INX Media's entertainment channel, 9X, is not launching programme DVDs yet, but it is pushing its channel on the Sky platform in the UK. Star Plus, meanwhile, already licenses its serials like Kyunki Saas Bhi Kabhi Bahu Thi and Kahanii Ghar Ghar Kii to Afghanistan and has sold them to channels in Mauritius and Indonesia earlier.
Gaurav Gandhi, executive vice-president (business operations and ancillary revenues), NDTV Imagine, says the idea behind pushing up the non-advertising revenue is that the consumer is spending more time on retail activity. "The consumer is also spending time on other digital formats like mobile TV and the Internet," he says. He adds that television content can, clearly, be re-purposed for new media.
Mythologies are better exploited for syndication. For instance, Ramayan, once dubbed, does well even in the south, while a serial popular in the north may not work there as well. Gandhi expects 30 per cent of the revenue for Ramayan to eventually come from non-advertising sales.
For social dramas, it can only be 9 to 10 per cent. The company's international film channel, Lumiere, has already put 30 of its films on a pay site for South-Asia at $2 per download. Gandhi contends that at a later stage, 50 per cent of the revenue for all programmes will come from non-advertising sources.
Small wonder then, that even 9x is open to looking at licensing its content to leading language channels for airing episodes -- dubbed or sub-titled in different languages. BAG Network, meanwhile, has set up Studio24, a TV and film content production house, which will create a comprehensive video archive on Bollywood through acquisitions, production and mining. Ashish Kaul, COO, Bag Network, says: "We will be the largest company providing a Bollywood news and features syndication service not only to India but to the rest of the world."
And viewership around the world is what these channels are eyeing. The channels hope to generate subscription revenue from the international market through the Indian Diaspora. Already, a couple of established channels make between $75 million and $100 million each from their international operations.
"In the developed markets, the cable and DTH systems are transparent. You are paid for the number of subscribers you have, unlike in India where subscription income is hazy," says a media marketing expert.
In the UK, 9X is on Sky, while Star India's flagship channels are present in the US, Canada, the UK, West Asia, Australia and parts of Africa. NDTV Imagine has already negotiated a fixed fee from Nepal and Fiji for its entertainment channel. In the UK and West Asia, it is still on a free-view window because it's in the base pack. "We are currently making money from advertising but will go pay soon," says Gandhi.
Internationally, television channels make a lot of money from L&M. Nanette D'Sa, division head, L&M, Star, says: "It is still early days for this business in India. Even internally, it is aligned more as a brand programme than a revenue programme. Of course, over a period of time this will change." Her department has already done comics on its humour shows, home furnishings range based on its serials and games on programmes such as Kya Aap Paanchvi Paas Se Tez Hain?.
A serious L&M business is dependent on a strong retail environment. "With large retail groups such as Pantaloon, Reliance, Trent and Shopper's Stop, and the next level of players like Tesco, Wal-Mart and others walking in, the opportunity for L&M in India is enormous. Television shows globally make as much money for L&M as they do from advertising sales and although we are -- some way from that -- we will be heading in that direction," says Peter Mukherjea, chief strategy officer, INX Media.
Also see: India's biggest media companies