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Television Industry structure - Views on News from Equitymaster
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  • Aug 27, 2007

    Television Industry structure

    The television industry in India has come a long way from the time when only a couple of Doordarshan channels were broadcast for a limited duration of the day. Today, there are 300 channels across various languages and genres catering to audiences twenty-four hours a day. The size of the industry is estimated to be approximately Rs 191 bn. With 112 m TV households, India is the third largest television market in the world, next only to China and the US. In this article, we analyse the structure of the industry.

    Television broadcasting
    The Indian broadcasting industry can be segmented into terrestrial (Doordarshan) and satellite broadcasting (Star, Zee, Sony etc). Following are some of the key genres and the main channels in each segment.

    Genres Channels
    General entertainment Zee, Star Plus, Sony
    Regional Languages Sun, Udaya, Asianet, Alpha, Etc Punjabi
    Hindi Movies Zee Cinema, Star Gold, Set Max, Filmy
    English Movies Star Movies, HBO
    Music Channel V, MTV, Zee Music, B4U Music
    General News NDTV, TV Today, Zee News, Star News
    Business News CNBC-TV 18, NDTV Profit, Zee Business
    Sports ESPN, Star Sports, Ten Sports, Zee Sports
    Children's entertainment Cartoon Network, Hungama, Nickeldon
    Infotainment Discovery, National Geographic History
    Spiritual Aastha, Zee Jagran
    Fashion & Lifestyle Zee Trendz, Fashion TV

    As many as 82 channels across various languages and genres will be launched in the near future. The Hindi general entertainment (GEC) space will become intensely competitive with the entry of players like TV18 group, NDTV, INX Media, UTV. It remains to be seen which of these players will be successful and will make a dent in the market share of the incumbent like Star Plus, Zee TV and Sony.

    Television content
    Television content is of two kinds - commissioned and sponsored programmes.

    • Commissioned: In this structure, the television channel commissions the content provider to produce episodes on a specific fee per episode basis along with incentivised TRP linked rate structure. When programme becomes successful, remuneration rates are re-negotiated in line with its popularity.

    • Sponsored: In this structure, the content provider makes an upfront payment to broadcasters to buy a telecast time band and receives free commercial time (FCT). The content producer recoups its investment by either getting sponsors for its programmes or by selling FCTs to advertisers. The intellectual property rights (IPR) remain with content producer for such programmes.

    Currently, the largest entertainment software provider in India is Balaji Telefilms.

    Television distribution
    The television distribution value chain consists of three main players:

    • Broadcasters, who uplink the content provided by content providers to the satellite. The major broadcasters are Zee, Star, Sun TV.

    • Multi-system operators (MSO's), who downlink the satellite signals and feed it to receivers, if they are FTA channels or integrated receivers or decoders if they are pay channels. The major MSO's are WWIL, Siti Cable.

    • Local Cable Operators (LCOs), control the last mile connectivity and transfer the signals to the subscribers' homes.

    In this article we have explained the structure of the industry. In the forthcoming article we shall dwell further on the prospects of each segment of the industry.



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