MUMBAI: Worldwide, the business of broadcast is typically categorized into three verticals: the entertainment piece (GECs, English, Hindi, Regional, Music and other entertainment), the News & Sports piece (mostly events driven and current affairs driven) and the Factual Entertainment piece.   

Factual entertainment refers to ‘lifestyle’ entertainment and ‘Information & Knowledge’ category. Worldwide it is monopolized by the four majors: Discovery, History, National Geographic and Scripps.

The business of factual entertainment worldwide commands 11.5% of the audience share while contributing nearly 20% of the advertising sales revenue pie.  This business is seen to be an attractive segment therefore. No major TV broadcaster from India or the Eastern part of the world has yet cracked it. Why?

In India, the ratios for both the above parameters is approximately 1.5% and 2% respectively.  In terms of audience numbers, even as it is bigger than most of the English News Channels and other English entertainment, the ad revenue contribution remains highly under-performed.

The way to crack this business requires one to reimagine the business of factual entertainment aben issue.

Business Insights

Two insights are important for this business to be understood:
1.    Brand –Unlike GECs where individual programs pull their own weight, in the business of factual entertainment, the Channel is the brand. Channel = Brand. The shows are incidental. The audience is loyal to the channel and not necessarily to an individual program. The genre provides high engagement value and the audience profile can be decoded from channel personality and hence the advertising brand fits. The brand is expected to deliver certain standards and hence no daily valuations and audience ratings do not matter much.
2.    Imagery – Not only are the content costs high but the marketing investments are also higher as imagery – leading to perception - is everything. You do not have viewers in this category…you need to create fans.

Reimagining the Business Model

The business model needs to be looked at absolutely differently as compared to other segments. The revenue streams need to come from five different sources:
1.    Pre-Sales
2.    Co-Production
3.    Broadcast
4.    Formats, and
5.    Syndication

In this model, while individual contribution shares may vary, broadcast is seen to contribute no more than 25-30%. The shelf life of content is far longer and investments in quality content need to pay off through several channels as above. Example - Co-production can help set-off high initial content costs. No wonder then that Discovery’s annual content budgets are in excess of a few billion dollars.

The broadcast players therefore need to decide to invest in Brand and Content as above. Most of all they will need to understand that this business has a long gestation period as getting the three unique factors – Audience communities as Fans, impeccable Brand integrity and cutting-edge Content – right makes the business thrive. Over and above this, the business model needs to follow the Five-Point Strategic approach rather than being looked at as a pure-play broadcast business.

(Piyush Sharma, a global tech, media and entrepreneurial leader, created the successful foray of Zee Entertainment in India and globally under the ‘Living’ brand. The views expressed here are of the writer’s and Indiantelevision.com may not subscribe to them.)