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Monday, Jul 25, 2005

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Trying times ahead for TV news channels

Nithya Subramanian

"News broadcast is definitely a personality-driven business. Thus churning of management or journalists can have its ramifications on company performance," said an analyst.

New Delhi , July 24

IT is challenging times ahead for television news channels. Ever increasing competition leading to a rise in staff costs, pressure on enhancing distribution and the need to build a network of channels are all likely to adversely impact the news broadcasting business.

According to available data, personnel costs for NDTV rose from Rs 11.16 crore during the January-March quarter to Rs 15.33 crore during the quarter ended June 30, 2005 denting profits while TV Today's costs increased from Rs 6 crore for the quarter ended December 31, 2004 to Rs 6.25 crore during the next quarter.

The fresh offering from Television Eighteen (TV 18) stable, India Broadcast News, has also added 250 people before its launch in October.

Analysts tracking the sector said that loss of key managerial personnel could hurt news channels. "News broadcast is definitely a personality-driven business. Thus churning of management or journalists can have its ramifications on company performance," said an analyst.

Currently, the competition in the news genre is only intensifying with the presence of over 15 national news channels and around 10 regional news channels.

"Regionalisation has added to the complexity of the TV news business. For instance, the launch of ETV 2 and TV 9 has dented the market share of national news channels in Andhra Pradesh. Similarly, Star Ananda emerged as the No 1 channel in the Bengali market within four days of launch," added Mr Atul Phadnis, Vice-President, TAM India.

Besides existing broadcasters want to build networks. NDTV is seeking uplinking permission for a fourth channel while Sahara too has launched a separate channel for the National Capital Region.

Channels are also trying to enhance viewership by incurring substantial marketing, distribution and promotional expenses. NDTV spent about Rs 4.3 crore on this during the April-June period and Rs 10.5 crore last fiscal while TV Today forked out Rs 13.99 crore last year.

As there are several free-to-air (FTA) Hindi news channels, broadcasters are divided over whether or not to go pay. NDTV and TV 18 seek subscription revenues while TV Today is still a FTA channel.

Besides this, advertising revenues have been under pressure. "In the past months, the environment has not been newsy. Last year, the National Democratic Alliance's `India Shining' campaign and the subsequent elections had resulted in higher ad revenues," said Mr Sandip Tarkas, CEO, Media Direction, part of RK Swamy BBDO.

Normally, the news channels have the highest number of seconds of ad per half-an-hour of programme. Media planners said that there has also been a recent trend of high levels of discounting, which has resulted in bringing down the advertising rates.

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