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English GECs: Fast-forward
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The existing three English general entertainment channels (GECs) — AXN, Zee Café and Star World — account for 0.14 per cent of the total television viewership and 1 per cent of advertisement revenue. But that hasn’t curbed the enthusiasm of new entrants to this space.

Last week, BIG CBS Networks, the 50:50 joint venture of Reliance Broadcast Network and CBS Studios International, lined up three English GECs. A few months earlier, Fox India, the sister network of the Rupert Murdoch-owned Star, launched FX and Fox Crime.

So is this a case of misplaced priorities? Not quite.

English GECs are betting on the 20 million DTH and six million digital cable households that have opened up the subscription model of revenues. Syndicated international content is bringing down the other entry barrier of production costs.

"International players are betting on long-term growth. As people migrate to higher income levels the propensity to consume English content will also grow," says Jehil Thakkar, media and entertainment analyst at KPMG.

Agrees Star India General Manager and Senior Vice President (English Channels) Saurabh Yajnik, "Even though consumption of English channels is small, digitisation will spur growth."

DTH operators are aware of their fit with such channels. Tata Sky Chief Marketing Officer Vikram Mehra explains, "Tata Sky consumers are willing to pay for value. They are keen to pay for niche channels and English GECs. Viewers of these channels are at the premium end of the spectrum. With analogue cable, the issue is of addressability as broadcasters find it difficult to identify the right consumer who could pay for their services."

Timmy Kandhari, PricewaterhouseCoopers leader (Entertainment and Media) says if for a Hindi GEC, the ratio of ad to subscription revenue is 80:20, for English GECs it would be 50:50.

Besides, English GECs have the advantage of very low content costs — around 30 per cent of their total costs, according to analysts. "There is no incremental cost on content as most of this is re-purposed for the Indian broadcast," Thakkar says. Reliance Broadcast Network CEO Tarun Katial agrees, "Our content cost will be very low compared to Hindi GECs since we are using pre-produced CBS content". If these channels source third-party content like Star World does from NBC and Disney, costs would still be lower than originally produced content.

The channels can afford to fall back on pre-produced content because of their positioning. Yagnik is confident that Star World does not want to localise too much: "We are promising the best of international entertainment. Our positioning does not allow us to localise beyond a point. What we have done earlier is create upmarket shows that are done in English and go with the ethos of the channel such as talk shows with Simi Garewal and Karan Johar."

Syndicated content does more than just cutting costs. For example, Fox saw an affinity between preferences of Indian audiences and those in Latin America, giving it ready insights on which shows to launch. Kandhari says, "The broadcasters have seen audience reaction to these shows. Since the taste of the premium audience they target in India don’t deviate much from the rest of their markets, it helps."

But is there space for growth for all of them? Yagnik says, "Fox’s channels expand our portfolio. There is enough headroom for growth. English-language channels reach just 2.5 per cent of the population whereas 35 per cent of it speaks in English." He doesn't seem to be too worried about Star World and FX cannibalising each other: "Since we handle the distribution and sales for both, we can find the right niches for each." BIG CBS, on the other hand, would strive to bring content from the 70,000+ hours CBS content library sooner, to decrease the gap between a show’s original schedule and the Indian rerun.

Networks are further differentiating within entertainment to get more relevant. BIG CBS will have a women’s entertainment channel to target the upwardly mobile women. Fox India’s FOX Crime would feature crime thrillers. Fox International Channels Managing Director (India) Keertan Adyanthay had said earlier, "There will be further segmentation. While a mother channel will have the choicest programmes from the different sub-genres, the specialty channels will explore these themes further."

The incumbents, in the meantime, are fortifying their offerings. Star World has come up with sharper programming. "We have slotted reality shows at 9 pm . They induce more sampling of our channel by new viewers," says Yagnik. Fiction shows such as Castle and reality shows such as Australia’s Master Chef have helped the channel grab more eyeballs. Experts note that reality-based shows had ensured AXN stole a march over others. While AXN has 62 per cent market share, Star World and Zee Cafe have 26.2 per cent and 11.8 per cent respectively, according to TAM.

The challengers, CBS and FX, have a head start. Thakkar points out, "The major cost that English entertainment channels will incur in India is that of distribution, since most of the content is from an existing library." Big CBS has Reliance ADA’s cable and satellite networks, BIG TV DTH and Digicable, and FX has Star India’s distribution muscle to flex, which is being spruced up as well.

With newer English GECs coming into the fray, audiences would not be saddled with reruns of the same seasons. They could even look forward to catching their favourite serials at the same time as their counterparts abroad.
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