TV entry strategy – Reliance Broadcast Network Ltd (RBNL)

MUMBAI: Billionaire Anil Ambani, known for his naked aggression and love for scale, has made a quiet entry into the television  broadcasting space. He has partnered with US media conglomerate CBS to set up a joint venture company, Big CBS Networks, that would initially roll out three English entertainment channels.

Ambani will fight in a genre that earns an annual ad revenue of just Rs 900 million. “It is too small a market. Even if Big CBS does take away market share, the revenue potential is too small to make a big impact in the industry. It is not like the Colors story where the size of the Hindi GEC (general entertainment channel) pie is large and it can disturb the marketplace,” says Multi Screen Media president network sales, licensing telephony Rohit Gupta.

Ambani, however, believes he can shake-up the English general entertainment genre with the CBS brand, content and pack of segmented channels. Big CBS Prime will compete with Star World, AXN and Zee Café, while Big CBS Spark and Love will build their own genres in the youth and women target segments.

“The market gets created. For the last few years, the need gap has dramatically changed with the spread of digitisation and the expansion of the English-speaking population. The entry strategy is appropriate as we feel there is an opportunity that better be tapped into now. This is only the first chapter and the others will unfold as we go along,” says Reliance Broadcast Network Ltd (RBNL) chief executive officer Tarun Katial.

Ambani’s big list will include GECs and movies in Hindi and the regional space. He has, in fact, applied to the government for approval to over 20 channels. For starters, however, the plan seems to occupy the upscale English space as there is a need gap and then expand footprint in all genres as a scale-up structure.

In the English genre space, Prime is being positioned as a contemporary channel that will air all the new shows from CBS and have localised adaptations of larger formats. “This is the first time an American network is getting into India. We will run the shows that are almost the same-day broadcast of the US, giving us a cutting edge against competition. Prime will be a GEC, with a leaning towards males. More than anything else, we are looking at category creation. We will promote this content and spread awareness,” says Katial.

Prime’s positioning will put it up instantly against Star World while AXN with its male-skewed and action shows has a distinct identity. “Zee Café will have to beef up its content. Star World is a strong channel and AXN will be somewhat protected by its distinct male positioning. There will, of course, be some canibalisation but the genre is expected to grow. The space wasn’t seeing anything exciting happening in terms of launch and push,” says a media analyst.

Zee Entertainment Enterprises Ltd (Zeel) chief revenue officer and head niche channels Joy Chakraborthy believes the challenge for the existing players is to hold on to their market share. “The genre is too niche for the new channels to have an impact in terms of growing ad revenue. The CPRP is very high and the GRPs is very low. This genre has to find ways to compete better with other genres like English news and infotainment for ad revenue,” he says.

Big CBS Spark will target the English youth with series and reality content that is edgy. Hindi youth channels like Bindass and MTV have banked on reality shows, but the English segment is untapped. “The youth channels in India have no soaps that can hold appeal to this target segment. Spark is expected to tap this upwardly mobile English youth. The aim is to create this genre and drive with it. CBS Love will also have a similar role to play,” says a media observer.

Star World senior VP Jyotsna Viriyala expects the new channel launches to grow the genre. “New entrants helped English movies as a category. English GEC has seen no action for a long time in terms of players coming in. Most of the action has been in the English movie space. My feeling is that Big CBS’ youth channel will compete in the youth space with the likes of Bindass and MTV for ad revenue, though they are in Hindi,” she says.

Gupta believes Big CBS will have a tough task to achieve profitability as distribution expenses are going to surpass ad revenues. “There are huge entry barriers (reff. porters 5 forces model )for such niche channels because of distribution. Segmenting of the audience by launching new channels is anyway difficult. In a niche genre that very few people of the television viewing universe watch, it is even harder,” he says.

Katial feels Big CBS is uniquely placed in terms of profitability. “Our situation is different from the others as we already have a distribution reach of 11 million households through Big TV (DTH) and Digicable (Reliance acquired this pan-India cable network). We have an integrated ad sales team and a strong content pipeline. It is the getting together of two strong companies,” he says.

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