Hindi channels expansions

Indian television channels, including Viacom 18 Media Pvt. Ltd's Colors, are stepping up efforts to widen their reach outside the country as they see significant benefits in serving the overseas market.

Colors, a Hindi general entertainment channel (GEC), is following the footsteps of rivals such as Zee Entertainment Enterprises Ltd (ZEEL), which began accessing the overseas market in the mid-1990s, and Star India Pvt. Ltd, also seeking audiences outside India.

"International markets are, in fact, a cash cow for Indian operations. The costs are not much. What we get as revenue is straightaway added as profit," said Rajan Singh, executive vice-president (international business), Star Network, owned by Rupert Murdoch.

Star Plus India is available in 70 countries in markets such as North America, the UK, West Asia and Hong Kong.

Over the past year, Viacom 18 has ventured into the US, the UK, Australia and New Zealand.

In the next few months, Colors will move into Canada, Singapore, the Caribbean, East Africa and Malaysia, said Gaurav Gandhi, head (international business) and chief commercial officer, Viacom 18.

The company announced recently that Colors is entering West Asia and North Africa and will be distributed on direct-to-home (DTH) platforms through Arab Digital Distribution Co. (ADD).

"The purchasing power of overseas audiences is high," said Anand Shah, analyst at Angel Broking Pvt. Ltd. "Plus, there's not much leg work involved in entering foreign markets, which is what channels such as Colors may be realizing. You get a distribution partner, the content is already with you and it makes a huge difference to bottom lines."

The US has about 1.7 million people of Indian origin, the UK has about 1.32 million and Canada has more than 300,000. Zee says it reaches 500 million viewers in 167 countries.

Star India recently entered into an agreement with wireless operator Verizon Communications Inc. to distribute its channel on the FiOS (Fiber Optic Service) TV network for North American audiences. Star Plus will join about 40 other international channels that FiOS TV offers access to.

Star India is looking at further expansion in parts of continental Europe such as the Netherlands, France, Italy and Portugal, said Singh.

It will soon announce a pay TV tie-up with the Top TV network in South Africa.

ZEEL has entered into an agreement with market researcher Nielsen Co. to monitor and measure television ratings and trends in the US, primarily for flagship GEC Zee TV, said Bharat Ranga, chief operating officer, international business, ZEEL.

Shah of Angel Broking said revenue from overseas for companies such as Zee is substantial. "Yearly, they get Rs.500 crore plus from international operations, which is almost as much as their domestic operations," he said. "These are mainly subscription revenues."

ZEEL plans to launch more Indian channels in Latin America, the Caribbean, Africa and West Asia.

It is also looking closely at syndicating content to foreign broadcasters in parts of Asia, West Asia and Africa.

The company's overseas plans include sub-titling and dubbing local content in foreign languages for people of Indian origin who may have settled overseas four or five generations ago.

"Indians abroad are mostly comfortable with the language of the market they reside in, so the content will be re-purposed," Ranga said.

"If you examine the scene worldwide, 75% of the world television market operates on syndicated content. While 90% of that syndication market is captured by Hollywood films and dramas, Korean, French, German, Japanese and other (Indian) Asian content put together barely reach a 10% share. We see tremendous scope in this area."

With more Indian channels venturing overseas, competition has become tougher.

"Not only are the number of non-resident Indians and PIOs (persons of Indian origin) significant, but they are also among the most affluent communities in several markets," Ranga said. "In distribution, we are constantly exploring new markets where we have not yet ventured in. In existing markets, we are trying to improve the yield to take care of marketing and production costs."

Viacom 18's international expansion is based on a two-tier approach, according to chief commercial officer Gandhi. The first is to tie up with an operator in an existing market and the second is to start developing local content for international markets, which the company has not embarked on yet.

"The revenue potential from a substantial international market would be northwards of $50 million (Rs.223. 5 crore)," Gandhi said. He added that he sees both subscription and advertising revenue growing in these markets, though the domestic contribution will always remain higher.

Rajan of Star said 95% of the content on Star Plus India overseas is the same as that in India, keeping costs at a minimum.