Zee Anmol a free-to-air channel launched 11 months ago, is a huge hit in small-town India. It dominates the list of top 50 shows in an estimated 20-25 million homes that only watch free channels. It has got millions watching earlier versions of Jhansi Ki Rani and Chhoti Bahu on their mobile phones. Zee Anmol is Zee Entertainment Enterprises' third free channel after 9X and Zee Smile.
Late last year, Viacom18 launched its free channel called Rishtey. Big Magic's comedy show, Har Mushkil Ka Hal - Akbar Birbal, has become a favourite in the Hindi heartland of Bihar, Jharkhand and Uttar Pradesh. "Because Bihar is such a media-dark market, inventory (on Big Magic) is usually sold out," claims Reliance Broadcast Network CEO Tarun Katial. Star Utsav with its reruns of Diya aur Baati Hum and Saraswatichandra is another free-to-air hit, especially in Doordarshan-fed DTH homes.
There are, by some estimates, over 300 free channels in India - just over a third of all channels available. They account for 7 per cent of the time spent on television in the country, and attract advertisements worth Rs 1,300 crore. (The total television advertising pie, according to a study done by the Federation of Indian Chambers of Commerce & Industry and KPMG, is Rs 13,500 crore). But this is expected to grow rapidly in the days to come. Zee Chief Content & Creative Officer Bharat Ranga says advertising on free channels could more than double to Rs 3,000 crore in three to four years. That's perhaps why Colors CEO Raj Nayak says: "Free channels are a must for any network." But why are advertising-driven free channels becoming the hottest thing in a market that is staring at rising pay revenues because of rapid digitisation?
Precisely because of rapid digitisation, say analysts. Till most of India was analogue, a one-size-fits-all pricing, programming and distribution strategy worked, a la films in the single-screen era. Now more than half of India's 160 million TV homes are digital and a bulk of these households pay to watch fresh, premium content on Star Plus or Zee among dozens of other channels. As the market segments between those who can pay and those who cannot, between those who just got a TV and those who have had one for long, the business models driving different parts of the Indian TV market - that reaches out to 800 million people - too are segmenting. What you see then are islands of audiences at different stages of growth and maturity.
Suiting local tastes "Free channels are more for smaller geographies where paying ability and infrastructure are challenging," says Sidharth Parashar, head of pricing and investment, GroupM, a media buying agency. In other words, free channels do well in the poorer parts of metros and in small towns and villages. Marketers such as Hindustan Unilever or Procter & Gamble use them to hawk soaps and shampoos to these communities. One could argue that small-town and rural growth has been a huge factor in deciding advertising spends earlier too; why do we see a deluge of free channels now?
There are two major changes that have pushed broadcasters to start paying attention to this market in the last couple of years. One, the penetration of TV in rural India has shot up because of the plethora of distribution options now available: cable, DTH and even mobile phones. Of these, the biggest game changer has been DD's Freedish, a free DTH service. With 18 million homes, it is bigger than Tata Sky and Dish TV. It is bringing TV to homes that never had it or replacing the sad stuff that Doordarshan dishes out to the 10 million or so terrestrial homes left. More than 30 channels such as Zee Anmol and Star Utsav pay anywhere between Rs 3.25 crore and Rs 6 crore a year to be on Freedish.
"It is not the free channels but good content coming on to cheaper platforms that is finding its market," thinks TAM Media Research CEO LV Krishnan. He reckons that there are many emerging markets in India - by language, geography or genres - and, therefore, there will always be a market for free channels at the basic level. He draws an analogy with what is happening in English entertainment, where for very long the older seasons of popular English shows have had a market in different parts of the world, including India. Similarly, the older seasons of popular Hindi shows have a market within parts of India.
There are 234 million homes in India, of which 160 million have TVs. Another 6-10 million homes are being added every year. "For them, good content is defined by what is available to them. For them, this is fresh content," says Krishnan. He says that most shows reach only 30-40 per cent of the targeted audience in their first telecast and 60 per cent by the second telecast. So the potential to keep finding new audiences and to monetise them exists for a long time.
Earlier, these homes wouldn't have mattered. Till about three years ago, almost all programming was focused on the top 40 odd towns (of a total of over 160) that house the TAM sample.
The ratings game
And that brings us to the second reason broadcasters are focused on small-town and rural India: these will soon start showing on the rating numbers. The Broadcast Audience Research Council, an industry body, will start releasing numbers based on a new rating system sometime next year. This sample, says the council, will be two times that of TAM and will include rural India for the first time. As the sample expands to include the fastest growing market, it makes sense for broadcasters to get their free-channel act together. Ranga reckons that a lot of below-the-line or non-mass-media money will now start coming to TV.
Free channels, however, are hot largely in the Hindi heartland. This is because penetration in the Hindi markets, the largest in the country, has always lagged behind the potential - and is now playing catch up. In markets such as Kerala, Tamil Nadu or Maharashtra, the big push to TV penetration came in the '90s and the early part of the millennium, and then came the free channels. Most audiences in these markets have outgrown free channels. But as they move to pay TV, it is the free channels, such as Sun TV in Tamil Nadu, that have set the context. Similarly if Rishtey becomes popular, "when those markets go pay, the brand would have been established," says Nayak.
