The document discusses the television industry in India, focusing on the Hindi general entertainment channel (GEC) segment. It analyzes the Hindi GEC segment, including key players, content types, pricing models, and financial performance. The Hindi GEC segment is highly competitive and profitable for only the top 3-4 players. While serials are the most popular content, reality shows generate good viewership but higher costs make profitability difficult. New entrants must spend heavily on programming, marketing, and carriage fees to gain market share in the established Hindi GEC segment.

1. 1
Television Industry In India
Hindi GEC Segment

2. 2
Key Growth Areas in Television Industry
Particulars Sub-Segment of Televisions Estimated growth rates in 3-5 years
Television
Hindi GEC 12-15%
Regional GEC 15-20%
News 10%
Criteria Hindi GECs Regional
GECs
News
Current Status of industry
3 1 9
Competitive Intensity 6 5 9
Differentiation/Niche/Players 4 2 9
Entry Barriers 2 4 9
Execution Capabilities of players 3 4 6
Scalability 7 3 8
Medium-Long term Revenue growth
Potential
4 2 9
Medium-Long term Profit/Profitability
growth Potential
6 3 9
Bargaining power in the value chain 2 1 8
Vulnerability to external factors 5 3 7
Capital Efficiency 5 1 8
Cash generating ability 6 2 9
Total (Least total being the best business
model 53 31 100
Ranked ( 1 being the best
and 9 the least rank) the
nine business models in
Television based on
several criteria’s that
aggregate in identifying
the strength of the
business model and
prospects of the
business.
Source:SparkCapital
Least Recommended
Most Recommended

3. Hindi GEC- Industry Overview
 Single largest genre/ fiercely competitive
 Largest genre attracting 25% of TV ad spends with annual ads on Hindi GECs of RS 25bn
 After 4 big bang entries (9x, Real perishing, Imagine struggling for survival and Colors making it
to #2) no disruptive new launches are expected
 Intense Competition among Top 4 players Star Plus, Colors, Zee, Sony competing for a larger
share of eyeballs. Overall the genre has12players eying a share of the sound growth the genre
has on offer
 The Genre, though offers sound growth, is loss making with only top 3-4 players making profits
Industry
Overview
Competitive
Scenario
Double
Whammy
 Stiff competition = Pressure on revenues Rating Chase = cost pressures
 With players chasing ratings/ ranking within the genre programming/ marketing/ staff costs are
likely to be on an uptrend. However, with cost uptick a given, fate of players is more dependent
on revenue traction/ consistent high ratings.
 Expect more channels (from Reliance ADAG, Alva Brothers JV with Turner, etc.) entering the
space in the medium-term
Trends
 Diversified revenue streams/some content differentiation
 Unlike TV news/radio; Hindi GECs derive substantial subscription revenues with ad: subscription
: others ratio of 62:35:3.
 Content differentiation exists though not large
 Huge entry barriers: large funding needs, big gestation costs, failure of most new entrants to
make a mark, enormous difficulty to ensure continuous viewer engagement with the content
 Sound ad growth and potential for substantial subscription revenue growth
 Hindi GEC genre is likely to see 13-15% growth in ad revenues.
 Also while proliferation of DTH and voluntary digitization of cable should ensure growth in
subscription revenues, compulsory addressability of analogue cable has the potential to act as a
kicker for subscription revenues and a profit multiplier for the genre.
Conclusion

4. Carriage fee is around 60 to 70 crores
for newer channels and is around 50%
of the cost of initial budget
TAM Peoplemetre placements and their
relative weightages, distribution is being
ensured in such markets even at higher
carriage costs
GRP depends on type
of contents
Top Three GRPs are
btw 250 to 300 points
Content production
is outsource
Outside Agencies
In-house production
Buy content rights
Acquires rights for
movies
Outside Agencies
Analogue
Digital
Digital
4
Value Chain – Hindi GEC
Content
Provider
Broadcaster
Types of
Progamme
Serials
(Fiction)
Reality (Non-
Fiction)
Movies
Others
(Games, Music)
MSO
DTH
IPTV
Distributors
Customers
LCO
Revenue
Mix
Advert
62%
Sub
35%
Markets
In Hindi Speaking
Markets- Hindi GEC and
Hindi Movies account
50% of viewership
Abroad
South India
Ratings
 GRP: The measure of a channel’s overall
viewership is gross rating points (GRPs), or
the sum total of the TRPs of its shows. NDTV
Imagine opened with GRPs of 55 and saw it
rapidly climb to 92 (the top three were
between 250 and 300)
 TRP: Viewership of a TV show is measured in
television rating points (TRPs). A TRP of
anything above 5 is considered excellent, 3-4
is good, 2-3 is average and 1 is low.
On an average 16
minutes per hour
is allocated to
advertising.
Charges of Prime
time is higher –
(9pm to 10 pm)
Others
3%

5. 5
Hindi GEC- Content Pricing & Mix
Average cost of production per half hour episode – Hindi GEC
Fiction INR 8 to 10 Lakhs
Non Fiction (without celebrities) INR 25 Lakhs (Per one hour Episode)
Non Fiction (with single celebrities) INR 1 crore (Per hour episode)
Non Fiction (with multiple celebrities) INR 2-3 Crores (Per one hour episode)
 Content Producers focused on producing fiction mainly due to their lower cost of production and ability
to get higher GRP
 Reality (Non-Fiction) shows are typically more expensive to produce and have been getting TVRs as
high as fiction.
The business case for reality shows relies on multiple revenue streams
in the form of SMSs downloading of ring tones and caller tunes,
product placements in shows, sponsorships by advertisers.
Reality Business Case
Type of Programme: Relation btw Profitability & GRP
High
Profitability
Low
Profitability
High GRPLow GRP
Long running family soaps
Mythological Serials
Recently released movies
Celebrity reality shows
Low -cost game shows
Channels: High cost of programming led to high GRP
0%
20%
40%
60%
80%
100%
Zee TV Colors Star Plus
17
28
4
2
13
5
81
59
91
Reality Movies+events Serials
Colors
maximum
GRPs from
high cost
programming'
Sep 10
Colors GRP is
close to 300.

6. 6
 Reality shows have a shorter life of three to four seasons, audiences. which makes
achieving breakeven difficult.
 Despite high investment, these are considered important by broadcasters since they
generate good media coverage, thereby helping in building GRPs and channel branding.
However, with costs of acting and technical talent rising, managing production costs is critical
for broadcaster.
Hindi GEC- Content Dynamics
Reality
Movies
 The window between theatrical release and TV premiere has shortened. Movies acquired for
prime time airings on GEC channel be used to build a library for the movie channel.
 The premiere typically happens on GEC as the effective rates on a GEC are far higher than
a movie channel. It is a good way to recover the high costs of movie acquisitions for a GEC-
Movie channels combination.
 Telecast on GEC has led to higher viewership and TRPs.
 Models:
o In 2008 Outright rights: most movie production houses followed the outright exclusive
rights model to monetize satellite rights where broadcaster had exclusive titles and rights
for 5 years with unlimited airings from the date of acquisition.
o In 2009 ‘Syndication model’ emerging, whereby movies were shared between different
broadcasters.
o In 2010 again saw ‘Exclusive rights model’ becoming more dominant. There are few
movies that have been shared between broadcasters but a large part of the library for
major players is exclusive.
Serials  Broadcasters outsource content to third parties
 With increase in competition, broadcasters started producing in-house contents and
acquiring rights of the content .

7. 7
Hindi GEC- Viewership Profile
Viewership share (%) – Share among all genres
Genre 2006 2007 2008 2009
Hindi GEC 23.0 22.6 23.2 26.9
Hindi GECs led among the genres with a 29.6 percent share of viewership
Hindi Speaking Markets (HSM)
Genre H1’08 H1’09 Difference
Hindi GEC 34 36 +2.0
Hindi Movies 17 17 -
More than 50% of the viewership share in HSM is dominated by Hindi GEC and Movies Combined
Percent Share by Genres
Duration of programming Viewership
Genres H1’08 H1’09 Difference H1’08 H1’09 Difference
Serials 34 34 - 55 56 +1
Films 17 16 -1 13 15 +2
Reality 8 8 - 12 8 -4
Mythos 8 10 +2 8 8 -
Action 3 4 +1 2 3 +1
Film Based 6 3 -3 1 1 -
Others 24 25 +1 9 9 -
 Fictions remained the
dominant genre, with films
as the second most popular
programming content type
 2009 saw the share of reality
TV rising on popular GEC
channels
 Hindi GEC top spot open to
all as viewers display no
channel loyalty and continue
to make shifts based on
superior content display by
broadcasters
 Includes males and females

8. 8
Newer Channels: NDTV – Imagine
 Turner General Entertainment Networks India Private Limited - TGEN - (a Time Warner
Company) is the holding company of Hindi GEC - Imagine, World Cinema Channel - Lumiere
Movies, Music Channel and Film Production House - Imagine Film Company.
 Turner Asia Pacific Ventures, a subsidiary of the $47 billion media conglomerate Time Warner,
it owns own 92%, the management and employees, 4.8%, and NDTV, 3.2%.
 Launched in 2008.
 Target Market: Women
Bouquet
Strategy
 NDTV Imagine is reported to have spent Rs 60 crore as carriage fees in the first year of
operations.
 NDTV imagine is a part of Turner General Entertainment which has NDTV imagine, Lumiere
Movies and Music Channels
Carriage Fee
Programming
Cost
 It also spent about Rs 300 crore on programming and marketing, which was considered to be
on the higher side given its scale of operations.
FY 2008-09 2009-10
Gross Income 137.1 221.7
y-o-y growth 62%
Expenses (including Dep.) 394.6 467.2
y-o-y growth 18%
PBT -260.1 -252.6
Figures in (crores)
Financials

9. 9
Newer Channels: Colors
Bouquet
Strategy
 COLORS' is Viacom18's (a 50/50 joint venture operation in India between Viacom Inc. USA and the
Network18 Group)
 Programming includes Fiction shows to Format shows to Reality shows
 COLORS a new Hindi General Entertainment channel – launching on July 21st,2008.
 Studio 18 - a new-age motion picture brand that produces, acquires and distributes Hindi films - also
use for Colors channels.
 Viacom 18 Media Pvt. Ltd. includes the vibrant youth brand - MTV, the fastest growing kids channel -
Nick, India’s only International Music & Lifestyle channel - Vh1
 It distributes through Sun Direct
Strategy
Success story
 Strategy - had three major cornerstones, namely the 3 Ds -Differentiation,
Disruption, Distribution.
 Content: Focused on providing differentiated content which laid emphasis on meaningful
entertainment.
 Marketing: Used disruptive marketing and scheduling for giving audiences a fresh look at television.
 Distribution: Devised a well thought of distribution process that helped to place the channel
strategically in the neighborhood of the most viewed channel across maximum households of the
country
Financials FY 2008-09 2009-10
Gross Income 338 835
y-o-y growth 147%
Expenses (including Dep.) 625 1263
y-o-y growth 102%
PBT -297 -428.3
Figures in (crores)

10. 10
Hindi GEC Channels which also have movies channels
Particulars Star Plus NDTV Imagine Colors Zee TV 9x
Sony
Entertainment
UTV Bindass
Broadcaster
Bouquet
Star Den Turner General Sun 18 Media Zee Turner 9X Media The One Alliance UTV Global
No of Channels 20 3 31 31 2 18 5
Movies channel
included
Star Movies Lumière Movies Zee Cinema SET Max UTV Movies
 Star Plus, Zee TV, The One Alliance, Colors, Sony Entertainment are part of larger Bouquets.
 Colors JV partner Studio 19 provide movies rights to channels.
 Most of the channels have movies channels along with Hindi GEC.
 Industry standards: The movies acquired for prime time airings on GEC channel is used to build a library for the
movie channel .
Potential channels for tie-ups for content sharing and distribution
B4U Movies Ushodaya Enterprises (ETV)
Launched B4U Movies in India on October 02, 2001,
bringing Bollywood to your homes.
Distributed by B4U Television Network
ETV Network, bouquet of 12 regional channels are
source of rich infotainment to audiences in the
language of their choice: ETV Telugu, ETV2, ETV
Bangla, ETV Marathi, ETV Kannada, ETV Oriya, ETV
Gujarati, ETV Urdu, ETV Uttar Pradesh, ETV
Rajasthan, ETV Bihar and ETV Madhya Pradesh.
Hindi-GEC: Bouquet options and Movies channels

11. 11
Particulars Star Plus NDTV Imagine Colors Zee TV Sony Entertainment UTV Bindass
Bouquet (Average Price) 5.56 9.6 7.79 5.26 11.76
Alacarta 18.73 20.5 21.4 13.88 21.4 10
Bouquet 5.35 5.35 5.35 5.35 5.35 5.00
Bouquet (Average Price) 2.78 4.8 3.90 2.63 5.88
Alacarta 9.4 10.25 10.7 6.94 10.7 5
Bouquet (Average Price) 2.78 4.8 3.90 2.63 5.88
Alacarta 9.4 10.25 10.7 6.94 10.7 5
Non-CAS Area
CAS
DTH ( Based on G
IPTV
Both DTH and IPTV chanel prices are 50% of Non-Cas Rate
Bouquet Pricing
Hindi-GEC: Pricing in Various Channel
A-la- Carte
Pricing
 Price ranges from INR 5.26 to INR 11.76 per channel for Non- CAS Area.
 There is no trend in pricing of channel
 Digital customers pay 50% less than Non-CAS customers
 Price ranges from INR 10 to INR 21.4 per channel in Non- CAS Area
 Digital customers pay 50% less than Non-CAS customers

12. 12
Hindi-GEC: Assumptions
Assumptions
Broadcasting Expense Outsourcing model (3 years of contract)
Carriage Fee Based on NDTV image paid to MSO about a year ago
Marketing Expenses
5% of Programming Cost and carriage fee and in the following year it should grow
in line with revenue but here 15% of industry growth rate has been taken to justify
increase in marketing expenses.
Personnel Expenses 10 crores ( Based on the assumptions that office will be open in 4 places)
Programming Cost
Serials: Reality: Movies: Others in ratio of 90:5:2:3
Best of the channels having 6 hours fresh programming in a day whereas Sony Television
has 3 hours of fresh content in a day to reduce the cost. Here we have taken cost
estimation on the basis of 6 hours of fresh content.
Miscellaneous 10 crores
Inflation Year on Year inflation around 12%
Particulars
Total Allocated
Hours in a year
Cost (Crores) Total Ratio
Fresh Content 2190 390 crores 100
Serials 1971 INR 10 lacs /hour 197 90
Reality 109.5
25 L for Non-
Celebrities and 1
crores with
Celebrities
34 5
Movies 14.6 146 146 2
Others 65.7 13 13 3

13. 13
Reasons
 Expected Budget to launch a Hindi GEC is
INR 1573 crores.
 In an outsourcing model - Broadcast
operation setup and technology support
will be provided by third party under three
years of contract.
 The company will have to rent office space,
hire professionals and pay carriage fee to
MSOs.
 Programming Cost is included in the
calculation and accounts 82% of the total
budget
 For personnel expenses, office rental 12%
y-o-y increase is assumed
 Carriage fee INR 60 crores/year
 Miscellaneous Expenses 10 crores each
year
Rs 1573 crores (All expenses
are highly variable)
Hindi-GEC: 3 years Budget
Items
Fixed Cost Year 1 Year 2 Year 2
MIB Security Deposit (Govt. Fee) – Uplinking and Downlinking (The license is
for 10 years) 10.1
MIB Consultancy Charges 8
WPC Charges 1.5 1.5 1.5
NOCC Charges 1.2 1.2 1.2
SD/ HD Studio, PCR, MCR and Broadcasting Setup, Live Production units –
DSNG/OB Vans (Excluding Building, Land etc.) 1000
Total 1021 3 3
Variable Cost Year 1 Year 2 Year 2
Man Power 72 72 72
Teleport Service (Up-linking Charges with Bandwidth on MPEG-4) 72 72 72
Lease line to Teleport (Reliance, Bharti, VSNL) 12 12 12
Admin and Core Reporter Local Expenses 24 24 24
Light, generator, UPS and Other Expenses 12 12 12
Ground Distribution of the channel in Delhi 250 250 250
Ground Distribution of the channel in Mumbai 300 300 300
Ground Distribution of the channel in Chennai and other South 400 400 400
India Distribution in DTH Platform 500 500 500
Total 1642 1642 1642
Company Expenses Year 1 Year 2 Year 2
Personel expenses - Marketing, Admistration, Finace and Senior
Management 900 1008 1129
office rental 1000 1120 1254.4
Marketing Expenses 2000 2300 2645
Miscellaneous 1000 1000 1000
Carriage Fee 6000 6000 6000
Programming Cost 39000 39000 39000
Total 52563 52073 52673
Total Budget for 3 years
Total Budget for 3 years
Approx. / Actual Charges
157309
1573 crores

14. 14
Content
 Focus on Serials and Movies because Serials generate long-term viewers and Blockbusters
movies creates new viewers.
Bouquet
 Most the successful Hindi GEC are part of large Bouquet and also have Hindi movie channels
in their kitty.
 Tie-up with B4U Movies channel will help the company to reduce the burden of the cost of
acquiring blockbusters movies.
 The company can also tie -up with ETV distribution venture.
Outsourcing  Outsourcing non-core activities will reduce the cost. In the present budget, HR department cost
is included
Celebrities
 Big names (anchors/reporters, producers and executive producers) may be roped in the channel
to make it popular before its launching.
Possible Strategy That Can Work
Tie-up  Tie-up with international media house for reality content

15. 15
Thank you