Telugu TV market beacons global players

HYDERABAD: The Telugu television industry seems to be in a phase of consolidation. Interestingly, global media moghuls seem to be breaking the bank to own a slice of the regional entertainment industry specialising in low-budget, local-language soaps.

With Star India, which is part of media baron Rupert Murdoch's 21st Century Fox, struck a deal to acquire Maa TV for an estimated Rs 2,500 crore.

A couple of years ago, another US media giant, Viacom Inc that operates channels like MTV, Comedy Central and Nickelodeon, with its joint venture TV18 Broadcast, along with Mukesh Ambani-led Reliance Industries Ltd, acquired 100 per cent stake in several channels of ETV valued at Rs 2,053 crore through a complex transaction. Prior to this, private equity investor Blackstone agreed to acquire ETV but the deal fell through.

The Telugu TV market is considered the second largest regional entertainment space after Tamil in the country and the sudden rush to gobble up regional channels seems only justifiable.

According to a recent FICCI-KPMG report on 'Indian Media and Entertainment Industry', the southern market accounts for about 35 per cent of subscribers in the country. Also, the penetration of TV in the southern region is more than the all India average.

Consider this. The size of the Indian media and entertainment industry (including print, TV, film, etc) is pegged at Rs 83,000 crore. Of this, the TV market alone comprises half at over Rs 42,000 crore.

As per the data available with the ministry of information and broadcasting, 826 channels including 135 news channels and the rest being non-news channels are beaming content across the country as on December 2014.

While Hindi channels have a dominant position, regional channels accounted for more than 27 per cent of the total television viewership in 2012 and an advertising market share of 27.2 per cent, said Ficci.

Similarly, Tamil and Telugu markets accounted for about 50 per cent of the total regional viewership, followed by Marathi and Bengali at 29 per cent, thus making it attractive for prospective investors both domestic and foreign to penetrate their presence.

Incidentally, regional channels are estimated to account for approximately 30 per cent of the total revenues of Star and Zee networks as on 2012. 'Regional genres are showing phenomenal growth in terms of viewership.

Advertisers are yet to tap into the large potential of the retail consumers in these markets and local advertisers would be willing to pay a premium for this audience,' Punit Goenka, MD & CEO, Zee Enterprises Entertainment Ltd had said.

Besides, market research firm PricewaterhouseCoopers estimates that with digital transmission (DTH) in place, advertisement revenue is set to grow at about 13 per cent per annum till 2018.

Meanwhile, it's not just entertainment and non-news channels that are attracting investor momentum. The Telugu TV market, which boasts of the highest number of regional news channels aggregating to more than 20 including TV9, TV5, Sakshi and NTV is also gathering attention.

For sometime, TV9, partly-owned by angel investor Srini Raju of Peepul Capital, has been trying to offload his stake valued upwards Rs 500 crore.

Estimates reveal that 25 per cent of the Telugu TV advertisement market comes from news channels and is growing. 'Of this, the top three or four news channels get a lion's share. Consolidation is bound to happen in news channels too with some of them bleeding due to higher operational expenses,' said an industry analyst. Watch this space.