The business channel boom

IN Media Practice | 10/01/2005
Can so many business news channels can survive? Can the market absorb this sudden rush of news channels?
 

 

                                     

M.Narasingh Rao

 

 

Suddenly the excitement in the Indian Television industry hinges around  business news , as a host of business channels are being launched.  The battle for eyeballs in the business news television business has already began. The warriors in the battlefield includes Zee’s business channel and CNBC TV 18 till date,  but new players like NDTV, Bennett, Coleman & Co, TV Today, Videocon  and  a Hindi business channel from TV18 are set to join battle.

 

Zee has already launched its hindi business channel, called Zee Business without any fuss. It  Positioned as a personal finance channel, Zee Business offers coverage on the stock markets, commodity markets and India  business news.

 

The Raghav Bahl promoted  CNBC TV18, which runs India’s only English business news channel, is all set to launch a Hindi version on 13 January 2005, christened Awaz. It will not be just a translation of TV18’s English channel CNBC-Tv18, but it will largely be for servicing information on prices of agricultural products, besides communication information on stocks and trade-related issues. It also provides information on all those chord which concern average Indian like banking, insurance, fixed deposits, mutual funds, housing loans etc.  says a top official of the company.

 

Likewise NDTV Profit is the name the Prannoy Roy promoted New Delhi Television Ltd has almost set for it’s proposed 24-hour business channels, and barring any last minute hitch, the channel will soon beaming into Indian  homes from 17th January 2005, when profit will have it’s formal launch. 

 

Videocon’s Venugopal Dhoot is also planning to enter the TV sector, in first quarter of the current year by launching a Hindi business channel. TV Today and Star News also planning a plunge to taste the water.

 

The question arises can so many business channels can survive? Can the market absorb this sudden rush of business channels?

 

According to "The Hindu Business Line" the market for news channels is estimated to be at Rs 500 crore and is growing at about 20 per cent. The market has just expanded from about Rs 100 crore to roughly Rs 350 crore over the last two years.

 

So where will the new channels fit in? Can they survive? The verdict ranges from positive to negative.

 

In March 2004, CNBC-TV 18 turned profitable after four years of struggle. According to data available in it’s web site, It is aiming for Rs 70 crore in revenues by March 2005, which is more than the total market for business magazines.  In many ways, CNBC`s breaking even has been a trigger for other players like NDTV and The Times group  to launch business channels. They believe that the business of business news has revenue potential.

 

Another thing is that the investments required for a business news channel is lower than a general news channel as most of these are studio-based shows. The cost of production is, hencemuch lower, and the break-even point will stands at low level.  Hence profitability seems bright, says industry sources. The thinking is that if Four premium business newspapers can find readers and advertisers, three to four business news channels can do so too.

 

Business newspapers in the country enjoys a more comfortable place  and share revenue as the market is expanding with globalisation of the  Indian industry and economy. The four major business newspapers in the country together garnered Rs 340 crore revenue in the last financial year. In the  previous year it stood at Rs 290 crore, according to a report on the  Business Standard website dated 20 oct 2004.

 

Whereas the country’s sole business news channel, CNBC TV 18, is not making huge profit. The financial data available in it’s website clearly shows that the  company,  after four year of struggle earned a negligible  profit of  Rs 14.35 crore as advertising revenue, thus made a profit of Rs 2.20 crore, after tax during the first quarter of this financial year ended 30.06.04. With more channels coming in, the advertising and viewership pie will expand automatically .Currently, there is only major player which enjoys market share so the  market is not expanding that fast. Advertising revenue will increase to accommodate all the players.

 

The Operational Manager of Marketing, of one of the news channels based in Hyderabad say competition will help in expanding the market, and the general news channels may lose revenue to some extent. Advertising of products such as credit cards, automobiles and financial services will move to the business news channels. Business channels may also target producers of fast-moving consumer durables, lifestyle products, apart from financial advertising, including initial public offerings. But one has to be innovative to sell time to lead the market. Some advertising industry men think that the business newspapers may lose some advertising revenue pie to these business channels.

 

 The chief of bureau of a reputed business newspaper working in Hyderabad however denies this  possibility saying that  business newspaper have their own loyal intellectual readers who  prefer newspapers to TV to get their main bsuiess news. He also adds that some years ago when electronic media enter into the media market media pundits were scared about the survival of the print media but the whole situation is quite different now. In fact the print media has registered higher growth rate than earlier period of the invasion of electronic media. He hopes the same will happen this time as well, when the new business channels are coming in to the horizon, saying that Indian print business journalism is more matured than the electronic business journalism and the business newspaper market will respond it positively.  So there is little chance of losing market share to the business news channel.

 

The business news channels could see an increase in competition from both national and regional news channels. To retain the first mover’s advantage they have to make substantial investments to develop original and interesting programming. 

 

As the country’s economy and business are integrating fast with the  world economy and as the  Indian economy is moving towards becoming a  knowledge economy, there is little doubt that business of business news has great potential to exploit the market. But will it be boom time in business for all the new players or will some fall by the wayside? Only time will tell.

 

Contact: ssass_narasingh@indiatimes.com

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