War of the Channels: Who will survive?


By
Prof. Shravan Rungta
Faculty-Advertising
N L Dalmia Institute of Management Studies and Research
Mumbai
Tel.: 9820572046
E-mail: facultyshravan@yahoo.co.in
 


War of the Channels: Who will survive?

Year 1990
Barely 5 TV channels and all controlled by the government.

15 years later…………..

Year 2004
10 News Channels, 5 Sports Channels, 5 General Entertainment Channel, 5 Music Channels, 5 Movie Channels and countless regional channels.

Around 30 channels claims to serve the national audience and incidentally, all have their share of loyal viewers. Conventional marketing says as competition increases, quality of the offering improves and prices come down but TV viewers in India doesn't seem to agree totally. Conventional marketing says first mover has the biggest advantage but DD News might not agree totally.

The main source of revenue for Television Channels across the world is primarily through subscription fee from consumers. In India the scenario is a little different; consumers are still not willing to accept the concept of paying for each channel separately, the result is that the CAS system has still not got off the ground. Hence the future of set top boxes will remain uncertain.

CAS or no CAS, the issue this article intends focus on is who will survive and why?

The war among channels in many ways is similar to the war is consumer durables sector, where there are categories like TV, Washing Machine, Microwave Oven, Refrigerator, Music System and others. But for consumer TV means Onida or Sony, Washing machine means Whirlpool or Videocon, Refrigerator means Godrej or Kelvinator and Music System basically means Philips or Sony.

Similarly with a sea of channel bombarding the viewers homes, the viewer at some stage would have to go with his or her gut feel so as to decide which channel provides the best content in that particular category like News, General Entertainment, Music, Sports or Movies.

There are some channels which are stand alone like MTV catering to music category or NDTV catering to news and HBO catering to English movie watching audience.

While there are other channels like Star, Sony and Zee which have tried to cater to most of the categories like General Entertainment, News, Sports and Movies.

But if one talks' to media planners and research managers across the country the chances are most of them would agree on the following:

News Channel: Most of my TG watches AajTak only
General Entertainment: Most of my TG watches either Zee or Star plus
English Movies: Most of my TG watches Star Movies or HBO
Sports: Its cricket irrespective of the channel.

And believe it or not irrespective of what the ratings says they park a big chunk their client's media budget into these channels. WHY?

Television Advertising is considered costly and to a certain extent it is, but since it caters to mass audience effectively it becomes cheaper (per contact). By spending 50 Lakh if you can reach 1 Crore then the cost per contact comes to less than a rupee. So by this logic it is the most cost effective medium to reach mass market, isn't it?

Coming back to the advent of a plethora of niche channels (ironically launched at the national level) being introduced to cater to a small section of the so called mass market, media companies essentially believe that advertisers would spend on TV to reach out to those people ignoring the fact that these brand managers have to justify the cost of reaching the TG to their bosses. To put it point blank, why should I spend 50 Lakh to reach 20000 people? when I can use a fraction of that amount to reach the same 20000 in a better way, probably this is the reason for rapid growth of preference to below the line activities in the corporate corridors.

This leads us to the conclusion that by simple common sense; mass media advertising is used to reach the masses and channel catering to the taste and interest of the masses would not just survive but be able to compete for the pie which seems to be growing. And the argument of "Content is the King" would in years to come shift to "Cater to the Masses" for all the media companies in India.
 


Prof. Shravan Rungta
Faculty-Advertising
N L Dalmia Institute of Management Studies and Research
Mumbai
Tel.: 9820572046
E-mail: facultyshravan@yahoo.co.in
 

Source : E-mail October 2, 2004

 

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