Huge rise in India channel costs

India has proven to be a very fertile nation for television. It is booming, with channel growth of 30% over the past 5 years with viewers now enjoying more than 130 pay-TV channels, and between 400-450 free-to-air channels. But costs are also rising dramatically.

In total 111 new channels were licensed for broadcast last year, according to Screen Digest, which predicts that despite the economic crunch (which has seen a slow-down of launches) the number of channels will again start growing over the next 12 months or so.

But at a cost. “As a result of the increasing number of channels available, broadcasters have had to compete for space on the limited-capacity analogue cable networks, leading to a sharp increase in carriage fees,” says Screen Digest. Fees have risen by between 80-100% over the past couple of years.

These cost increases are confirmed by the broadcasters themselves who state that distribution fees have risen by around 40% in the past year alone.

Of course, one man’s loss is another’s gain. The giant MSOs (the likes of WWIL, Digicable, Hathway, DEN and others) “have all gained considerably from these increases,” says Screen Digest.

There have been other rising costs. Content acquisition has rocketed, by about 24-25%. Staff costs have grown 40-50% year-on-year, reflecting nationwide salary increases of 12-15% over the past year alone.