TV channels in India set for runaway growth

I have been through this newspaper highlighting the potential growth sectors in our country and carrying on with that process this time I'm going to cover the television broadcasting industry.

Television broadcasting has come a long way in India since the current Prime Minister Dr Manmohan Singh and previously finance minister threw open the doors to private players in the early 1990s, breaking the monopoly enjoyed by the state-owned Doordarshan.

Today the Rs129 billion television business simply refuses to slow down. Viewers in India and NRIs abroad viewing Indian TV channels are spoilt for choice.

There are more than 150 channels in India catering to every possible viewer taste.

Movies, cartoons, sports, music, religious discourse channels, news, comedy, business, regional language channels the list of choices is increasing steadily.

If industry sources are to be believed, city and town specific channels are just around the corner.

Every major TV broadcaster in India is today busy announcing new channels.

New programmes, bigger game shows with a significant interactive element and bigger prize money tempt viewers to keep their sets turned on.

A simple indicator of the frenzied activity witnessed in the industry is the fact that in the past six months seven news channels have been launched and at least six more should be launched in the next 8 months.

The leading broadcasters in the industry are Star, Zee, Sony and Sun.

In the news segment, which is arguably the fastest growing, Star, NDTV, CNBC, Zee and Aaj Tak are the major players.

The three major players in the industry Star, Zee and Sony have started local broadcasting to the GCC to get their share of the GCC advertising pie.

The reasons for the runaway growth in the TV industry are not difficult to see.

While set-up costs like satellite installation have been coming down every year and there has been huge growth in the number of television households from 59.4 million in 2001 to 108.2 million in 2005, the penetration level still remains below global levels.

Thus only 51 per cent of the country's households have a television compared to more than 90 per cent in the US and UK

The shift from free to air model to subscription based viewing model for most popular television channels and the increased segmentation in terms of genres available to advertisers has boosted revenues for the Industry.

There is a direct correlation between between the growth in GDP and ad spend. India's advertising spend to GDP ratio at 0.4% is among the lowest in the world.

Even China boasts a corresponding ratio of more than one per cent.

The untapped potential is still huge and that is why the industry continues to see new entrants and expansion plans from existing players.

The government is expected to announce more liberalised rules for foreign direct investment (FDI) in television broadcasting in the next year or so in line with the recent relaxation of regulations that took place in the print media.

This in addition to the increased acceptance of the Direct to Home (DTH) broadcasting should act as a catalyst in an industry that is already on fire and will make it a sector to watch.

- The writer is head of the Dubai office of Kavvy Stock Brokering Ltd