After the launch of MetroNation, this is NDTV's second attempt at launching a city-specific channel and NDTV Hindu Managing Director & CEO Rajiv Lulla is convinced marketers will bite. He believes that an advertiser has the advantage of creating a national campaign and tailoring it to the needs of different cities.
Contrary to perception, it's not just local advertising that the venture is relying on to make money, but the big spenders. Says Lulla, "We're looking at half a dozen city channels and that gives an advertiser the national reach he's looking for. He can negotiate one rate for the spots but can always customise the advertising to suit regional tastes and preferences."
Lulla points out that the bulk of television advertising revenues is garnered from the top six cities with Mumbai and Delhi accounting for close to 75 per cent. He's clear that the business model will be built around advertising revenues rather than subscription revenues.
And that's where The Hindu comes in. Explains Lulla, "Almost everyone advertises with The Hindu and so we get access to over a hundred advertisers." The idea, of course, is to bundle the print and television advertising and come up with an attractive package for marketers. Of course, The Hindu will contribute to the content which will focus on local issues and topics of interest.
Industry watchers say teaming up with NDTV is probably a good way for The Hindu to enter the television space. The spoils at NDTV Hindu will be shared equally between the two partners as will the costs.
Lulla says NDTV is talking to potential partners for tie-ups in other cities, including Delhi, where MetroNation doesn't seem to be doing too well. The CEO's reluctant to talk revenue targets but adds that such channels typically take between two and three years to break even. Chirag Negandhi at Enam Securities believes it could take longer. "Unless local advertising comes in, it could be tough in the current environment," he points out.