Huge rise in India TV costs
The economic downturn, together with the inevitable squeeze on TV advertising (down 10-15% q-o-q), is badly affecting broadcasting in India. The good news is that channel count is up 30% since 2004. But broadcasting and transmission costs are rising too.
A study from Screen Digest states that cable subs revenues are stagnating, while DTH revenues are simply booming helped by a proliferation of satellite operators.
India's Ministry of Information & Broadcasting data, examined by Screen Digest, suggests that there are now more than 130 pay-TV channels broadcasting over India, rising at a CAGR of 30% pa since 2004. Total channel count is about 400-450 services (including free-to-view). Some 111 channels were licensed last year.
Screen Digest says that a "significant" number of channels have failed to launch and plans have been either been put on the back burner or abandoned altogether pending better economic conditions. Screen Digest states that between now (Q4-2009) and Q2-2010 the number of channel launches will pick up again.
On the plus side the cable operators have benefited hugely from an increase in cable carriage rates of between 80% and 100% over the past couple of years.
That's good for the cable operators. The downside is that broadcasters have seen their own distribution costs rocket this past year or so. Added in to the cost equation are salary rises for skilled personnel needed to fund expansion (up 40-50%, and compared with average rises in India of 12-15%). The end result is that some broadcasters are cutting back, on pay and jobs, says Screen Digest.
But there's some scope for optimism: DTH revenues have increased by 60-80% during the same period and proving, says Screen Digest, that the effects of digitisation and improved transparency in reporting [of subs numbers] are starting to find their way up the TV value chain.