 television Intellectual Property Wrongs TV content producers do all the work from conception to production. Yet they make small profits and don't own the IPR of their work.
Every evening, on weekdays, millions of Indians eagerly tune in to Star Plus to watch Sasural Genda Phool, the tale of a headstrong girl from a rich family trying to adjust into a middle-class joint family. The show, one of the highest rated on Star Plus, is a remake of Ogo Bodhu Sundari, which aired on Star India's Bengali entertainment channel, Star Jalsha. It not only exemplifies how mainstream Hindi broadcasters are replicating successful regional formats, but also shows how a broadcaster can leverage its network strength. Sasural Genda Phool is a scene-by-scene copy of Ogo Bodhu Sundari, the only difference being in the cast and the language. By remaking a sister channel's show, Star Plus has saved crores. And, apart from earning advertising revenue on both Jalsha and Plus, it has monetised the show further by distributing it internationally. All of this has been possible for one reason: Star India owns the intellectual property rights (IPR) to the original show. Had the producers owned the IPR they could have sold it to other broadcasters and monetised it in other ways. As things stand, though, a production company is dependent on a single source of revenue: the fee from a broadcaster. "It cannot ever monetise the content unless it owns the IPR," explains Shombit Agarwal, MD, Protiviti Consulting. The world over in the television entertainment business, IPRs belong to the content creator. In the US, these companies produce a few episodes, test them in the market and then sell a season's worth (around 24 episodes) to the highest bidder. Most own the rights to the content they create. They are also free to syndicate the content to networks outside the US, like Warner Brothers did with the globally popular sitcom, Friends.
Sun Group CEO Vijay Mohan believes broadcasters retain IPRs because they want to re-telecast shows later. All mainstream channels broadcast their shows repeatedly. "We don't believe in buying products and stocking them. We've always believed that repeats will never get us major ratings," declares Mohan. But he concedes that Sun can afford to follow this model because of its leadership position across Southern channels. The Cost Factor Earlier, when it was the only broadcaster in the country, Doordarshan (DD) followed the same model Sun does now. But that changed with the advent of satellite television in India in the early 1990s. The Zee group was the first to retain the IPRs of all the shows aired on its channels. "DD considered itself a public service broadcaster and never wanted to take the risk of investing on entertainment properties. But when we came in we felt that if we want to create assets, we had to own the IPRs also," explains Atul Das, President, Corporate Strategy, Zee Entertainment.
Since broadcasters had the capital to invest, standards also improved. "Broadcasters now don't want to give up their dominance even if some production companies are willing to invest significantly in the content creation process and own the IPRs," says Nikhil Alva, CEO of production house Miditech. Today, even DD takes over IP rights from producers. "We are capable of developing ideas but none of us have the scale to create and invest in the IPR before selling it," says Patnaik. The biggest advantage content companies in the US have over their Indian counterparts is financial might, since they are subsidiaries of larger media conglomerates. If a Warner Brothers creates a show that costs $2 million per episode, it pumps in an investment of at least $26 million to create episodes, based on which it invites broadcasters to bid for the content. Almost 80% of the TV content companies in India have revenues of less than Rs 10 crore per annum. They are financed by banks on a per-project basis and depend on one or two shows for their revenues. Profitability depends on the success of the show, which could be taken off the air if ratings are poor. Even if it clicks, the margins are slim: 10%. "There is hardly any capital left to scale up," says Alva. Myleeta Aga, CEO, BBC Worldwide, feels this is a developing market scenario. "In a mature market, the broadcasters are eager to pay a premium. In India, there is too much fragmentation. So the bargaining power is with the broadcaster." Below The Investor Radar Unfortunately, the total dependence on broadcasters means these production houses have fallen below the radar of venture capitalists (VC) and private equity (PE) companies. The only PE investment in a TV content company happened when ICICI Ventures took a 24% stake in Alva's Miditech in 2000. The PE and VC community blame the content companies. "Most of them are mom-and-pop stores. They're passionate about work but are not interested in scaling up," says Anand Vyas, Managing Partner, Pravi Capital. He says, "No PE company will touch them unless they own the IPRs and have multiple streams to monetise their revenue." Instead, most venture capitalists and PE funds prefer to invest in new media companies and film studios, which retain their IPRs. "Even if I invest in a small-budget movie I can earn through multiple revenue streams such as selling the satellite rights to a broadcaster, selling music rights, DVDs and so on," says Satish Kataria, MD, Springboard Consulting. "Even if the movie flops, one can make money, as only 30% of the revenues come from theatre sales. A TV content company has only one source of revenue: the broadcaster." Diversification Bug Content producers need to move away from just TV content to scale up, says Vyas of Pravi Capital. Some have started. The Rs 153 crore Balaji Telefilms, which was dependent on TV content until recently, is now getting into films. From nine or 10 shows a year, Balaji now produces six. "The number will come down once the film business gathers steam'Balaji doesn't see much of a future in TV content, as it is not able to own the IPRs," says an industry analyst tracking the company.
The goal for all these companies is to own the IPR of their work. But will the balance of power ever tilt in their favour? It will in the long-term, say analysts. Today, there are over 400 broadcasters and thousands of production companies. In the short term, this fragmentation will only increase; but there will be consolidation. "Many of the smaller talented directors will eventually be bought out by the bigger companies," points out Anmol Nayyar, Executive Director, Bryan Garnier. When that happens, content producers may finally begin calling the shots. |
Kyunki Saas Bhi Kabhi Bahu Thi 2
