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 Economic Laws Practice       Avalon Consulting

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September 21, 2008

Spotting the winners among the General Entertainment Channels

Business Today has an article on how the channels are faring post the launch of a rash of new entrants.
Given the clutter, it’s not surprising that all the new launches have been backed by huge marketing and promotion spends and very aggressive pitches to marketers. Even as STAR Plus has fought tooth and nail to retain the top slot versus ZEE, Sony is finding the No. 3 slot rather slippery for it. “We are seeing a close battle for the No. 3 slot,” says Indrani Mukerjea, Founder & CEO, INX Media. “Since April (this year) 9x, along with other channels, has been at the No. 3 slot at different times,” she points out. Adds Harsh Rohatgi, Executive Vice President (Revenue Management and New Ventures), NDTV Imagine: “NDTV Imagine is currently bunched in the second tier of GECs after STAR Plus & ZEE.” Of course, Sony doesn’t agree with INX or NDTV Imagine. “We are the third-largest player and there’s no dispute there, but there is a fight for space among all the new entrants,” says Rohit Gupta, President, Sony Entertainment Television.

Such skirmishes are just a tell-tale sign of the fierce battle that lies ahead for viewership as well as the advertising money, which drives every GEC’s business model. In anticipation of the bloody battle ahead, channels are experimenting with new ingredients to whip up a compelling concoction for advertisers.

...Just the same, being a new player, catering to a smaller audience set isn’t easy. That effectively means having to put compelling deals on the table for advertisers. The new GECs, for instance, are having to guarantee a minimum viewership, failing which the deal gets sweeter and sweeter for the advertiser. Earlier, Sathyamurthy N.P., Joint President, Lintas Media Group, had told Business Today that media planners were taking investment calls based on guarantees of viewership share from broadcasters. “Usually, we review this within four weeks of launch, and if the commitment has not been met by then, we get additional commercial time for our clients,” Sathyamurthy had said. Evidently, the viewership commitment gets reviewed in six months and then nine months. “If 70 per cent of the viewership commitment has not been met until that time, we get 30-35 per cent of our commitment money back,” Sathyamurthy had explained.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.