The Economics and Strategy Planning to run a news channel in Regional markets

By GV Krishnamurthy

35 crores &20 months for a newKannada news channel!!!

Aneye opener onwhat is and what needs to be

It is not uncommon during the elections to see a spurt of activity in news genre and desire to own news channels. With elections around the corner in Karnataka, the revenue is expected to grow by 40%.I have been sought time and again by interested parties to help them launch a news channel. Here’s my simple maths up front for you to understand what it takes to run a news channel, from launch to operations for the first year.

But I believe, the state of affair of the Kannada news channels is currently an opportunity awaiting the biggies to dive in. A platter that is most likely to grow and succeed with a packaged drive and not as a standalone entity.

At present, The market grp’sof Kannada news is 360 grp’s from 13 channels which averages to be11% of the total Kannada speaking; of this 3300 grp’s,77% grp’s comes from top 5 channels.

This is their performance as per BARC and the revenue scorecard as of today is per my estimate based on general market intelligence.

Kannada news draws between Rs. 130cr – 140cr out of the Rs. 600cr total market, which is 22% of total revenues. The corporate sector contributes- 70 cr while the retail, SME and government add up to 35 cr; slots and others like teleshopping, health is 30 crores

As Ipen this article, there are already 14 news channels in Karnataka and to my disbelieve there is news of more news channels launching. To top it up, this October 24th, South India’s largest networks 19 years old first news channels of Kannada, Udaya News shuts operation.The statement issued reasoned, we have made high investments in building the news business in Karnataka. Despite our best efforts, the news division has been incurring substantial losses over the past couple of years!

Now, Is this a warning or a case study?

The learning’s are evident for the keen observers but it’s important to note thatmost of the channels are headed by ex employers of other channels and this has led to being replica of one another during launch days, though over a period it has developed individual identity. Particularly in Kannada market you have less news & news related content than other markets and If logos were to be removed the channel appear similar in story creation, the language and even the back score. The channels have failed to use strategy and research (science) to construct a competitive programming, hence all FPC looks pretty similar.

Thus, the channels have issues of being in‘me too’ market.

1. Coverage is mostly Bangalore centric neglecting ROK.
2. Same faces on screen, common body language and similar news reading and delivery.
3. Bad or no business plan.
4. Do not have research and strategy team.
5. No Information Only Perception.
6. Innovation is limited.
7. Lacuna in investigation stories.

Most of the channels coverage is limited and Bangalore centric and reactive in nature. In comparisonNational channels coverage especially breaking news stories are well capsuled than local news channels. There is no loyal audience except perhaps the top two to three channels, and content has failed to garner credibility or deliver social responsibility. In many other regional markets, media has played a crucial role in mediating issues like Mr. Kanchalaiah issue recently in Andhra Pradesh. The channels not just have herd mentality, but we have live examples of mistakes grabbed and being aired from one another too!?!

To worsen the situation the attitude amongst most seniors and veterans is to wrongly impress the strength of their contribution. They are falsely mistaken about carrying not just the popularity quotients but channel success on their shoulders too. The process is skewed and misleads investors building false hope and frustrations easily.

However, the solutions are logical and practically easy to deduce

1. Appoint second in command resources in top channels with leadership position for corporatized management.
2. A well balanced creative team with experienced and freshers to breakthrough approach and delivery of news

• Growth in news coverage with strategic alliances across states for national and other regional news & stories.

1. Craft a scientific and strategic FPC in sync with an identified or proposed viewership category
2. Construct customer centric formats for stories and news based programs based on feedback mechanisms
3. Have a strong research and strategy team and allow them to have a say across departments

• Add a young and vibrant look and feel to branding, marketing and content and adopt the digital world

This is possible only with professionally run established national players penetrating regional markets.

Their strengths ofexperience and expertise coupled with the open opportunity to tap a quality starved market are inviting. It’salso plausiblefor a bouquet channel to create space and encash on a nonperforming channel for sustenance. It’s in them already to deliver Reliable News with a Good Back Ground Score and In-depth News Analysis, what with their very wide network of reporters all over India and an established team of skilled professional on the job.

And this stagnant market need is simple – news bulletins.

Are the biggies listening???

 Like always, I keep saying Innovate Don’t Renovate to revive the brand/product.

Author: GV Krishnamurthy is widely known in the media fraternity as GVK. With a cumulative experience of around two plus decades in Southern media markets across multiple functions of a strategist, analyst, content management, sales and marketing in media business. He can be reached on krishnamurthygv@gmail.com tweet: @gvk_murthy