Recession hits Electronic Media

As per the media reports the broadcasting and transmission costs are rising and the cable sub revenues are decaying. However, there is also some good news, since 2004 the channel count has gone up to 30 per cent, whereas DTH (direct-to-home) revenues are simply growing.

As examined by the media sources, "India's Ministry of Information and Broadcasting data suggests that there are now more than 130 pay TV channels broadcasting over India, rising at a CAGR of 30% per annum since 2004. Total channel count is about 400-450 services (including free-to-view). Some 111 channels were licensed last year."

"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. Now between Q4-2009 and Q2-2010 the number of channel launches will pick up again," media persons continued.

"On the positive side the cable operators have benefited hugely from an increase in cable carriage rates of between 80 per cent and 100 per cent over the past couple of years. In fact that's good for the cable operators.

And, on the negative side the 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 to 40-50 per cent, and compared with average rises in India of 12-15 per cent. The end result is that some broadcasters are cutting back, on pay and jobs," as per the media reports.

But there's some scope for optimism as DTH revenues have increased by 60-80 per cent during the same period and proving that the effects of digitisation and improved transparency in reporting are starting to find their way up the TV value chain, says the media sources