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Help India's southern viewers like it local
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With the ouster of the IPL’s flamboyant supremo Lalit Modi last year and his replacement as chairman by the austere Chirayu Amin, some of the zip has gone out of what was previously an over-the-top party event.

But enough razzamatazz remains to keep the fans happy. There was the usual singing and dancing, including a performance by Bollywood heartthrob and IPL team owner Shah Rukh Khan, ahead of some exciting cricket as defending champions Chennai Super Kings outlasted Khan’s Kolkata Knight Riders.

Despite the scandals that have clouded the IPL brand over the past year, IPL-4’s opening match still pulled in the viewers. Audience measurement agency TAM reported a record 7.14 TV ratings points, indicating an audience of 56 million on Sony TV’s cricket channel MAX.

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Even so, the southern city of Chennai is far from cricket’s Indian heartland. Last year, eight of the 10 most-watched matches in IPL-3 involved the Mumbai Indians, and the biggest cricket audiences traditionally come from the north, the west and the centre.

The highest rates for viewers “sampling” IPL matches are Delhi (90 per cent reach), Gujarat (88), Chhattisgarh and Madhya Pradesh (87), and Maharashtra and West Bengal (85). The all-India average, according to TAM research, is 82, but in Tamil Nadu – home state of the Chennai Super Kings - the figure drops to just 71 and in neighbouring Kerala it is a lowly 64.

The more relevant numbers for broadcasters and advertisers hoping to reach southern India’s prosperous TV viewers are four, six and 24 – the four local languages of Tamil, Telugu, Kannada and Malayalam, the six prime formats of news, general entertainment, movies, music, children and comedy, and the 24 hours a day that audiences want to watch them.

For Chennai-based satellite broadcaster Sun TV Network, which reaches 95 million non-Hindi speaking households in what is regarded as one of India’s prime consumer markets, the money lies in these formats and not sports.

“IPL is not our cup of tea,” Sun TV Chief Operating Officer K. Vijay Kumar told The Australian recently. “Sports programming needs a special focus. It’s high risk and it’s hard to make money from it.”

Sun TV, set up by Chennai media tycoon Kalanithi Maran in 1993 specifically to target Tamil and other southern-language audiences, is the most valuable listed media property in India, with a market capitalisation of about $3.67 billion. Maran, his wife Kavery and other family members hold a 77 per cent stake worth just over $2.8 billion.

Kumar says Maran and his Sun TV team have held onto that first-mover advantage in regional television, which is now one of the fastest-growing sectors of the Indian media scene. In his view, outside of the national networks, no one has Sun’s reach. “We’ve got the eyeballs and we are across all the six key genres,” he said.

“The feeling for language and culture is very strong in the South,” explains Kumar. “It plays a very important role. For example, Tamil Nadu audiences are addicted to Tamil-language programs. There is a comfort level that comes from the mother tongue.”

The same goes for Malayalam speakers in Kerala, Kannada speakers in Karnataka and Telugu speakers in Andhra Pradesh.

In January, Sun TV reported its revenues for the first nine months of 2010-11 jumped 46 per cent year-on-year to $318 million. Chief Financial Officer V.C. Unnikrishnan says the full-year results, due for release in late May, will likely show that turnover for the year ended March 31 crossed 20 billion rupees (about $440 million), with after tax profit up 40 per cent.

From June, Kumar says that Sun TV will be in a “cautious expansion mode,” targeting the Tier 2 and Tier 3 towns that are the next rung down from the big cities such as Chennai and Bangalore. Good economic circumstances in the south mean that consumers are cashed-up and feeling confident.

“Advertisers of fast moving consumer goods, cars, jewellery and finance want to target these tiers. There is a lot of money in the rural belt -- everybody is buying gold, for example.”

But any expansion almost certainly will be in the languages that Sun TV knows and understands. “We looked at the Hindi space, but we are not going ahead with anything there. The competition is too intense,” explains Kumar. English also is out.

“It’s a space that’s already well served.” However, he says an acquisition aimed at Punjabi language viewers in northern India and elsewhere is a possibility. India’s 1.2 billion people already have plenty of choice, served by 500 TV channels that include 150 pay-TV channels.

As one of the pioneers of satellite broadcasting, Sun TV knows all about the economic vicissitudes of an industry where “last-mile” pay-TV cable operators massively under-declare the number of paying subscribers they have. That in turn impacts on the money these “cablewallahs” pay to their content providers, the TV channels.

But digitisation and the advent of direct-to-home (DTH) satellite broadcasting is starting to change the equation. About 130 million of India’s 210 million households have a television set, and at least 80 million of those households have a cable connection. In the past, broadcasters got no money from many of those connections because they were unreported. The only financial beneficiaries were the pay-TV pirates supplying an illegal signal to customers.

“DTH is changing the picture,” says Krishnan. “It is giving accountability. The industry is changing and cleaning up from the days when a cable operator might have declared only 30 to 35 out of every 100 subscribers.”

Sun CFO Unnikrishnan agrees. “DTH now gives us 13 to 14 per cent of our revenue, and we expect it to grow very rapidly year on year,” he says. “We know the DTH market has already hit 30 million.”

To help meet that market demand, Sun has set up an unlisted arm, Sun TV Direct, which has Malaysian media mogul T. Ananda Krishnan as a 20 per cent stakeholder. It is one of seven major players in the Indian DTH market, competing against Tata Sky, Big TV, Airtel DTH, Videocon, DD Direct and Dish TV.

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