V I D E O • A G E AP R I L 2 0 1 0 44 (Continued from Cover) Indian TV understanding the audience. And that’s no easy task! In a country home to hundreds of dialects, 28 distinct states and seven union territories, they have their work cut out for them. But it will be well worth it. Over the past decade, channels have launched and failed. Shows have come and gone. Understanding the “why” will help clarify the thinking on what type of content could work well. Secondly, content and service providers must focus on understanding the economics of the business. There are nuances in India that make the revenue and cost structure an important area to study before entering the market. One must have a clear understanding of this. Thirdly, companies need to absolutely find the right partners. If they’re looking to enter into a joint venture with an Indian network, they might very well be on their way to a successful foray into the Indian market if they work with a local player with a proven track record, as being a foreign entrant results in significant barriers to entry from a regulatory perspective. How has the player reacted over the past decade during the aggressive phase? What content and expansion bets have they made? How have they paid off? Is the network a leader or does it follow a “me too” strategy. (Beware: many do the latter!) Finally, companies must recruit the right talent. In a market where industry executives turnover exceeds 20 percent, it is difficult to get top notch talent. Companies have to focus on creating a compelling value proposition that attracts Indian management talent with a good understanding of content market over the last seven or eight years. With a cautious and open approach to the Indian market, foreign companies will be well poised to tap into one of the most unique audiences on the face of the earth. infotainment genre lends itself easily to language versioning primarily because it’s the visuals that dominate the content,” she explained. In spite of this, many channels are branching out as affluent audiences develop a desire for unique options. In many instances, this has resulted in content being presented in its original form (or something very similar). In 2008, UTV debuted its World Movies channel, which has been responsibleforbringingfilmslikeAmelie, The Godfather and The Counterfeiters to such audiences. Other networks like NDTV, have followed suit. It is also been noted that, formats taken from other countries have fared quite well in India. From standard sitcoms to emerging genres, success stories are prevalent. In the past five years the share of gameshows, reality, and talent (as a percentage age of original programming) has increased threefold. Formats adapted from shows such as American Idol, Fear Factor and Are You Smarter Than a Fifth Grader have undoubtedly contributed to this trend. According to Popli, successful international outlets such as Mumbaibased Sony Entertainment Television, a subsidiary of Sony Pictures Entertainment, and Zee TV, which is Indian-owned and broadcast in Asia, Europe and the U.S., profit from a business model of 70 percent advertising and 30 percent distribution and other various incomes. With one billion potential viewers in India, almost any niche audience is still a mass audience. As the middle class continues to grow and literacy rates continue to increase, it is expected that foreign content’s market potential within India will increase at a steady pace. As content providers look to break into this dynamic market, a well planned approach is suggested. First, they must begin by and the Jurassic Park series.” But problems are not just limited to the content area. In spite of the expected growth, technical challenges need to be resolved before Indian executives pull out their check books to buy programs. Viren Popli is the head of TV and Digital Initiatives for Mumbai Mantra Media, the entertainment arm of the Indian conglomerate Mahindra and Mahindra. Before being tapped to lead Mahindra’s foray into television, Popli served as senior vice president of the mobile entertainment division at StarTV. He explained that although new channels are being established at a fast pace, a majority of India’s viewers are based in rural areas, and consequently are unable to watch their content. These viewers face a big challenge: they have access to analog platforms that carry between 80 and 110 channels but, in many cases, households have television sets with only 16 channels. Therefore, “most channels pay to be carried instead of earning distribution revenues,” Popli said. Fees for a piece of “prime band” real estate on the first 16 channels range from U.S.$200,000 to $2million a year. Even the more modern DTH delivery systems are beginning to charge carriage fees as their airwaves become crowded in urban markets. So, while the growth outlook is optimistic, there are some fundamental problems, such as infrastructure that must be sorted out in order to fully expand content supply. And, now, to the “yes” answer: Nonetheless, Viren Popli acknowledged that TV stations “buy [content] directly, all rights in perpetuity,” because there is little incentive to produce original content, and TV channels are more often than not reduced to becoming outsourced service providers. For international producers looking to break into the market, Master suggests paying close attention to language. She saw how National Geographic Channel’s market share tripled within three months of introducing a 24-7 Hindi feed, the country’s most widelyspoken language. “There’s a plethora of Hindi language general entertainment channels to choose from, and viewers don’t really feel the need to watch dubbed content,” Master added. In contrast, when the popular Sahara One Network launched Firangi in 2008, the channel broadcast international drama and comedy series dubbed in Hindi. Although great effort was made to create seamless dubbing for shows like Telemundo’s Spanish-language telenovela El Cuerpo del Deseo, known as Second Chance in India, the channel’s popularity quickly fizzled. “[Only] the channels for some one billion viewers. This rapid growth has expanded beyond the general entertainment channels into news and other niche segments such as lifestyle, kids, and infotainment. And it is not expected to slow down anytime soon. From 2009 to 2013, the Indian TV industry is projected to grow at a compounded annual rate of 14.5 percent. Several factors are expected to continue driving this growth: • Digital distribution is expected to increase subscription revenues. • The DTH subscriber base is likely to grow to nearly 28 million by 2013 (from 10 million in 2008). • The entry of newplayers will increase competition and keep production costs low. • IPTV penetration is expected to increase as broadband infrastructure is solidified. • Focus will continue on unique regional content to satisfy audience’s unique interests. With such an exciting growth story as the Indian TV industry is experiencing, wouldn’t the international TV industry expect to see India’s major network buyers rushing out to gobble up content at events like MIP-TV? The simple answer — yes and no. Let’s begin with the “no” answer: Dilshad Master, a 20-year veteran of the Indian broadcasting industry, who has served as senior vice president for National Geographic Channel, India, as well as COO for UTV Entertainment, explained that “India has a thriving television production business and these production houses churn out content that is topical, culturally relevant, and in a language that is still understood by the masses. While production houses may be in the mass production business, they indeed have a grip on their target audience,” she said. “Hollywood titles struggle for shelf space and only the really rare ones break through the clutter — Avatar being a recent example [of a movie that could fare well on Indian television],” Master commented. “The cultural and social nuances of Hollywood cinema are so totally alien to Indian culture that acceptance is limited to titles that are high on action or graphic content and larger than life e.g., Rambo, Godzilla, “ Although new channels are being established at a fast pace, a majority of India’s viewers are based in rural areas, and consequently are unable to watch their content. Dana Tilak is president and CEO of Bombay Pictures, a production company based in Los Angeles, currently producing Destination Imagination, a game show designed to bring together annually 100,000 children from 30 countries in a team building competition.
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