Sucheta Dalal :Will BIG-CBS ever make money?
Sucheta Dalal

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Will BIG-CBS ever make money?   

December 3, 2010

As the small English language television channel segment gets more fragmented, can the increasing number of players ever expect to make some money?

It’s a long list of competitors that are slugging it out in the general entertainment channels segment; and one more name just got added to it.

BIG CBS Prime, the first channel launch from the BIG CBS Network, went on air on Monday. Two more, BIG CBS Love and BIG CBS Spark are to follow soon. BIG CBS is a joint venture between Reliance Broadcast Network (RBNL) and CBS Studios International.

RBNL said in statement on Monday that the channels would reach 20 million households through alliances with multi-service operators such as Reliance BIG TV, Digicable, Den Networks, Hathway and others. The entry of three new channels in the segment will in all likelihood fragment the business further and inflict further losses on existing players that are already struggling, and make it very difficult for the newcomer. Interestingly, BIG-CBS claims that it will break even by 2013.

It must be pointed out that all GEC channels are either losing money or making profits only in fits and starts. The English entertainment channels garner a viewership share of only 0.13% (slightly better in the metros at 0.17%), and even when AXN, Star World and Zee Café are taken together, their ad revenue is not more than any of the second-rate Hindi channels—about Rs 100 crore.

BIG-CBS suggests that it has an edge on costs as it will be able to source content from CBS at a much reduced rate, RBNL chief Tarun Katial said. Moreover, it has Reliance Big also to take care of distribution. So, while most other English entertainment channels may take longer to start recovering costs, BIG-CBS may start doing so sooner.

But will it? In India, any English channel is a niche experience, and with the target audience hooked to ‘Friends’, ‘How I Met Your Mother’ and ‘Scrubs’, it would be  difficult to establish any sort of a foothold. A mass following is very unlikely, as the channels will be available exclusively through BIG TV and its associates, who make up a small part of the market. With cable, Tata Sky and Dish TV subscribers left out, it is unlikely to go boom.

Experts say that the company has modest expectations and that it is on the right track. Nikhil Vora, a financial analyst, says, “Of course, a 20 million viewership is pretty restricted and advertisement revenues will be limited too. But the venture is banking on the premium payability potential of it audience. Yes, it is targeting a niche audience, but these viewers will pay to watch it.” Is three years an adequate time then? It would still depend on the amount of capital the company is willing to burn, Mr Vora says. But since it is a long-term venture, it will be foolish to look for immediate gains.

CBS is the most-watched network in the US. But it is to be seen whether some of its very popular programmes like ‘The Late Show With David Letterman’ and good old ‘Frasier’ will hook desi couch potatoes. —
Shukti Sarma 


-- Sucheta Dalal