In-depth: Regional news TV becomes new bastion of growth

Regional TV channels are growing in India but one category that's shown exceptional growth is regional news television.

Viewership is soaring in the category and so is advertising revenue. More brands are joining the regional news bandwagon, forcing the national broadcasters to strengthen their regional news offering.

All major broadcasters, including Zee, Network18 and ABP are present in the regional news market, allowing them to offer a bouquet pricing to advertisers and also holding some sort of a political clout.

According to an EY media and entertainment report, the next phase of growth for TV will come from regional (as good quality language content increases). Hence, national broadcasters and businesses with deep pockets are latching on to this opportunity.

Sundeep Nagpal

Sundeep Nagpal, an industry veteran and the Founder Director, Stratagem Media, explained, “In the business of news broadcasting/ publishing, it is the best to have a large footprint. News becomes much more relevant when it comes in the regional language, because then it reaches the rural parts of the country, which ultimately increases the footprint. The cost of increasing this reach is not significantly higher for the national networks, there is only content cost.”

Adding more about the benefits, Nagpal pointed out that having a number of channels across different regions increases the clout of that network with the distribution platform operator (DPO). “The network can demand a prime band in certain areas on account of offering many language channels because even the MSOs like Hathway, Siticable, Incable and others have national presence.”

In addition to this, a similar benefit is there while selling the airtime to the advertisers. It is always easier to sell a network that has a spread across various regions in the country.

While this was about the benefits for channels, even the channel stands to gain from having an established credible media group at its back.

Experts feel that the growth in the regional news market is still immense as both advertisers and viewers are looking for a credible source.

Avinash Pandey

Avinash Pandey, COO, ABP News Network, said, “Due to a lack of credible regional news channels in the market, a credible media group launching a language channel creates opportunities for both viewers and advertisers. From the value point of view that the regional channels add to the network, I don’t think it makes much business sense if not for advertising. The content requirement of the national bureau and the national channel is different. Having said that, in case of crisis, you are far more equipped to handle it than the other national channels. But the cost is also much higher. However, from the advertising point of view, if you buy regional and national channels together, it has a very high business proposition.”

But not all advertisers are interested in bulk deals.

Karthik Lakshminarayan, VP, Media Planning and Strategy, Vibrant, Reliance Jio, said, “We always plan and use the best channels for a genre in every region, irrespective of the size of region – Hindi belt or independent regional states like Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Kerala, West Bengal, Maharashtra, Gujarat and others. We don’t believe in cluster buy.”

On why it is equally important to perform better as it is to be present in more markets, Shankar B, Founder, Fourth Dimension Media Solutions, said, “An advertiser who wants to seriously tap the regional markets chooses the leaders in each market. Unless and until all the channels of the national network rank in the top four, it doesn’t work much for the advertisers. At least in the south market, the business is largely dependent on relationship and PR.”

Competing with the independent regional channels

The regional news space, especially South India, has a plethora of news channels dedicated to their own languages and cultures. How tough a competition do the independent news channels pose to the national network regional channels?

Nagpal answered, “That depends on how well established is the competition, and sometimes, the competitive regional channels are quite well established, like Sun News. The place is so competitive that it is difficult to figure out who is offering differentiated product.”

The timing of launch also plays a part. As Nagpal said, “A late entrant in a certain regional network finds it difficult to grab a share of the viewership pie. They then try to play with technology or some other offering. Some of these channels are very well spread out, also because of existing businesses like publishing business, etc. It makes sense for them to launch news channels in such a scenario because a lot of resources are shared.”

Pandey added, “If the independent channels are present in the market before the entry of a national channel, then it has created that business environment which may not be very conducive for the national channel to operate upon. But the job is to go ahead and change the environment.”

Decreasing dependence on national advertisers

There was a time when everyone believed that the regional channels cannot survive without the national advertisers. However, in case of regional entertainment, we have seen this dependence decreasing significantly. Has the same happened in the regional news segment?

Pandey of ABP voted for a ‘yes.’ He said, “No business can survive if the community around it doesn't support it. The business and the community have to support each other. If local advertisers don't support, the regional news channels cannot survive. However, most regional channels have not been able to drive this environment professionally, which is a clear cut gap in this market. Advertising is about 50-50 for national and regional. We would ideally want it to be more skewed towards regional.”

Nagpal agreed to this point while adding that the local/ retail players find TV to be increasingly attractive and are often ready to pay slightly more than print.

For a national advertiser, as Lakshminarayan puts it, “Usually, the might of buying/buyer weighs heavier for regional channels over national/ regional counterparts, though offering varies by network and by seller type.”

Shankar said that the dependence on the national advertisers increases as the channels lose viewership and slip down the ranks. He added, “For the channels that rank up in the ladders, regional is a much stronger source of advertising revenue as much as 55:45 skewed towards regional.”

Kishan Kumar

Drawing a fine difference between the south and north India markets, Kishan Kumar, Managing Partner, Wavemaker, said, “The regional news is largely dependent on the retail play, which is very strong in South. Kerala is about 70%, while even other south markets are over 40-50%. Hence there is huge scope to survive even without the election period. North doesn’t have that strength in the local advertisers and hence the dependence on national is much more. A similar trend is seen in regional print too.”

Hindi vs non-Hindi regional news

To understand the TV news market better, the total news genre is pegged at close to Rs 4,800 crore, of which around Rs 1100-1200 crore is regional, despite the plethora of channels on offer.

Tamil Nadu is the biggest news market among regional sectors. Tamil Nadu’s news market is pegged at Rs 200 crore while Andhra Pradesh would also be close to that. Karnataka claims Rs 140-150 crore followed by the Kerala news market that garners Rs 120-130 crore.

Delving into detail, Kumar explained, “Except south and barring peak events like elections, regional news is not doing as much as national news. The reason majorly is because of the predominant Hindi markets like Rajasthan, UP, Bihar, MP. These markets also have a lot of news channels on offer, while the demand is not much, leading to cannibalisation. Secondly, the regional news segment is merely 25% of the size of the total news genre, predominantly led by the South market. Unlike other genres where regional is driving growth, I don’t think that’s the story in news. The TV + digital or print + digital story is what everyone is embracing, be it the national giants or the regional ones like the Sun Group or the Asianet Network.”

Spelling the words overlap, he added, “It looks like the channel brands in even the Rajasthan, UP kind of markets can eventually become very big and successful, but right now, it is the south that leads the growth story. The north market has more newer brands in the news segment, whereas down South, one can count the legacy brands as much. Subscription is low and the advertising is not pumping much money in the north regional channels, due to the huge overlap with Hindi.”

Someone who has been delving into the regional channels deeply, Nagpal suggested that it is about the requirement of the brand. He added, “Theoretical media planner analysis on this is ‘whether the UP/ Uttarakhand or Bihar are P1 markets for the brand?’ In that case, while the national Hindi channel might be in the plan, its deliveries will be supplemented by the regional news channels dedicated to these markets. Even if the amounts spent on these channels are much smaller than the national channels, it’s a higher CPRP to supplement.”

Future of regional news

While the regional news has grown a lot in the past many years, some screws still can be tightened to make it more attractive to the advertisers and audiences.

Pandey suggested some ways. He said, “Despite being a part of a network, a regional channel has to stand on its own. The biggest point in managing a regional channel is to have the cost control and fairness. You need to have that degree of governance on both editorial and business side, along with financial prudence and marketing wisdom. If you do that, it becomes profitable and the gestation period to become profitable is lesser than a national news channel. However, advertisers and agencies haven't yet woken up to these opportunities except for a few genres.”

He cited examples of South India and West Bengal, where channels are quite a profitable proposition. “The average consumption of a regional news channel in any market is higher than that of the national channels. Broadcasters are encouraged to launch regional news channels. However, regional channels are largely dependent on government advertising. Mainstream advertising is still not happening enough yet. However, I would believe that the channels’ value much more than what they get.”

Under-indexation is a chronic issue with regional news, just like in many other genres. Pandey feels that the data needs to be sliced to focus on the regional pockets and evaluate the value of the channels.

“We don't look at news channels from the TG point of view. We look at everything as NCCS ABC 15+ which is not the right way to look at the regional media. The correct way to look at it will be towns and villages that it serves, brand equity of the channel, its impact on environment, policy making, recall value and such parameters. Also, slicing the data in a way so that it reflects the true value of the product. Unfortunately, from both broadcasters and the agency side, this is not happening,” concluded Pandey.

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