It’s raining news channels

[alpeshpatelk]

Of the 200-plus broadcasters’ and prospective broadcasters’ applications lying with the ministry of information and broadcasting (I&B), awaiting clearance to start their operations, around 60% are for news and current affairs channels, while the rest are for other genres (general entertainment, movie, music etc).

As many as 33 broadcasters have been doled out new licences to beam channels specifically on news and current affairs in the year 2008 alone. “Till now, the ministry has been granting licences almost on a routine basis to broadcasters (for beaming their channels) who fulfill the eligibility criteria,” said I&B secretary, Sushma Singh at a news summit held by Indiantelevision.com recently.

The flood of applications for news channels can be attributed to a lower entry cost, a growing share in the total media ad-revenue pie and an easy definition to be qualified as a news channel.

Currently, a news and current affairs channel is defined as a channel with any element of news and current affair in it. According to Vanita Kohli Khandekar, a media consultant, it takes an investment of around Rs 60-70 crore to launch a news channel.

However, if the channel happens to be a second or third offering from a media house, the costs may be much lower benefiting from economies of scales, arising out of common pool of staff, OB vans and other existing resources.

The cost of floating a news channel will also depend on the density of distribution network the broadcaster is aiming for. According to an industry estimate, the minimum cost of floating a general entertainment channel (GEC) would be, at the very least, double the average cost of launching a news channel.

Going by a Starcom and Khandekar estimate, the news media business is valued at Rs 16,440 crore, is fast catching up with the entertainment business, pegged at Rs 25,550 crore. All news channels put together, earn approximately Rs 1,300 crore in ad revenue, up from Rs 900 crore in 2006.

The number of news channels on air has also gone up to 80 in 2008 from nine in the year 2000. Of the total ad revenue, English and Hindi news channels account for Rs 1,217 crore, while regional news channels together earn close to Rs 83 crore. The ad revenue for new channel is growing at a rate of 18-20% annually.

The case for entrant news channels carving a niche for themselves is also strengthened by the fickle and fluctuating viewership of news channels. Television rating figures show that while in the case of GECs, viewer loyalty is much stronger with Star and Zee, the market leaders. They command more than 50% of market share, perched at top for several years now.

The same is not true for news channel viewership. However, Khandekar believes that for a 1-billion plus democracy like ours, we are still news-starved, with a big gap in the regional languages news space. There are currently no vernacular news channels serving exclusive political, sports, business, lifestyle content....

SOURCE : http://www.financialexpress.com/news/Its...s/348563/1