Shailesh Kapoor: The long tail of TV channels: An investor’s delight?

07 Aug,2015

By Shailesh Kapoor


We are a country of many channels. At last count, more than 400 channels have enabled themselves with watermarking that’s a pre-requisite for them to be measured and reported by BARC. About 250 of these have a viewership of at least 0.1 GRPs.


The top 10 channels contribute to 48% of the total TV viewership in the Hindi-speaking markets (HSM). Six Hindi GECs and four Hindi Movie Channels (HMCs) constitute this list. The Top 20 contribute 64% of the total TV viewership. Regional GECs and kids channels find a place in this extended list, along with Hindi GECs and HMCs.


The Top 30 contribute 75%, and the new genres to enter this list are Hindi News and rerun-based Hindi GECs like Star Utsav, Zee Anmol and Rishtey. The tail flattens out here onwards, with the Top 40 contributing 81% and the Top 50 contributing 86%. There is no past data to draw a trend here (BARC vs. TAM is a fallacious comparison), so it is difficult to conclude if the long tail is getting longer. But even as the big guns fight their fierce battles, it’s this long tail that is going to be of increasing interest to potential investors in the broadcasting sector.


Look beyond the Top 30 and you see variety in great measure. Regional channels feature prominently in this list, as do genres like sports, news, music and infotainment. However, there’s no ‘only-in-English’ channel in the Top 90, till the English Movie Channel (EMC) category makes an appearance.


There has always been considerable investor interest in the television business in India, over the last two decades at least. With the advent of digitisation and the (somewhat overrated) phenomenon of non-linear television, this interest is increasingly concentrated on the long tail. It is not to suggest that the GEC category has no need gaps available, but the sheer investment in a mainline GEC can make even the most risk-prone investor think twice.


Hence, the focus seems to be on differentiated ideas that can stand out in the long tail. A common problem, however, seems to be that many of these ideas have the potential of being a long tail champion, but the aspirations and funding requirements of one of the Top 20 players.


Like in the films business, there’s no such thing in TV as a good channel or a bad channel. Every channel is as good or as bad as the ROI it can generate for its investors. The long tail has higher chances of creating such high ROI propositions, but with channels that control budgets to suit the long tail potential.


Thinking regional becomes a smart choice in such a scenario. There are more need gaps in the regional spaces, and like-to-like content costs are 30-70% lower in regional vs. Hindi, depending on the market being targeted.


For every eight new channels launched in the long tail, only one breaks even in its first decade. As we mature as a television market, we will see more long tail channels. But we also hope to see more success stories.


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