Year 2019 has been one of the toughest years for the television industry. The changes in tariff order has led to a sharp decline in the number of subscribers. But Viacom18 sees this as an opportunity to dial into newer revenue sources and improve profitability.
For Viacom18, this is the time to invest in more profitable and underpenetrated areas, which is the regional language content. The company plans to do it in a holistic manner.
“While 59 per cent of Indians consume content in regional languages (other than Hindi), viewership is only at about 44 percent. It is underindexed for the use of the languages. Monetization is even further under indexed. Only about 36 percent of ads are targeted towards regional content. Therefore we see strong tailwinds in regional content,” Sudhanshu Vats, CEO at Viacom18, told BusinessLine.
While Hindi gets the lion’s share of ad revenues, Viacom18 also sees major opportunities in other popular Indian languages such as Tamil, Bengali, Kannada, Marathi and Malyalam. This is because these languages are spoken in states that are highly affluent compared with the national average and therefore a better target market for marketers.
“Bigger languages such as Tamil, Bengali, Kannada, Marathi, Malyalam are spoken in prosperous Indian states with higher per capital income, higher brand propensity. Therefore monetization for such languages should be at least at par with Hindi if not higher,” Vats said.
The expansion in newer languages is happening at multiple levels–launch of new regional channels, increased content for regional languages on Voot–Viacom18’s video streaming platform, and production of regional films.
In TV, Viacom18 is looking at deepening geography presence–going deeper and wider. For example, in Kannada, Colors now has four different channels. Similarly, in the broadcaster is expanding geographic presence with Colors Tamil.
“We are also evaluating other markets. For example we added Gujarat Cinema and Bengal Cinema channels. We need to work on making Bengali content stronger,” Vats said.
On the digital side, Viacom18 became the first broadcaster to launch a TV channel first on an OTT platform.
“We introduced Colors Telugu ahead of TV and are getting 2 million daily views on digital,” Vats said.
Similarly in films, the network is expanding beyond Hindi to look at Marathi, Bengali, Telugu, Tamil and Malayalam.
The efforts have already started to yield results. “We have seen about 40-45 per cent growth. We were also under-indexed as a company in the earlier system as we were the youngest media network in the country,” Vats said.
Regional content sees good growth
Viacom18 expects its profits to double by the end of the fiscal.
“Production costs are much lower for regional language content. However, that doesn’t mean they are low quality. There’s a lot of talent in regional markets which hasn’t been given enough opportunity to showcase their true potential,” Vats said.
Making shows in one regional language and then offer dubbed versions in Hindi and other languages has also helped the network improve cost structures and expand library faster.
The growth in regional also coincides with the Government’s new tariff order that severely impacted subscription numbers for most networks. Regional content at this time saw a good growth as it was cheaper and connected better with local audience.
While Vats acknowledges that the tariff order had an impact on subscriber numbers, revenues actually increased due to better transparency from cable operators.
“NTO has been extremely successful on multiple counts. The first objective was to give choice to the consumers. One-third of the customers are forming bouquets and choosing channels that are not part of the distribution packages. The second objective was to bring in transparency and that’s where the industry has moved forward. While the total number of subscribers reported by DPOs has come down especially for cable TV operators, the realization has improved with better transparency leading to increased subscription income and higher tax realization for the government,” Vats said.
Vats feel the Viacom18 being one of the youngest operators in the market managed to overcome these hiccups fairly well.
“We have seen about 40-45 per cent growth. We were also under-indexed as a company. in the earlier system as we were the youngest media network in the country.”
Source: The Hindu