Going Niche is the Future for Indian Television

Broadcasters Mirroring Diversity Among Publishers with Channel Choices

MUMBAI -- Babies, cars, food and fashion -- Indians are now waking up to a plethora of television channels catering to their individual needs.

With more access to direct-to-home services and high-definition television, niche TV channels are finding a place in a market dominated by soap operas and reality series.

Advertisers looking for targeted audiences are helping too.

"Niche channels are part of a coalition strategy for both subscription and advertising revenues," said Rajesh Jain of consultancy firm KPMG.

"Advertising becomes important because of restrictions by government of India in terms of subscription caps per channel, so we will see a mix of both."

India had as many as 461 active channels as of 2009, targeting 129 million television households most of which are single TV homes.

While penetration of niche channels in India is a mere 1.6% compared to 16% in Singapore, channels with English-language programming are becoming the first choice for many upwardly mobile Indians.

"If you map what is happening to India outside of the television space, you will see that our aspirations and ambitions have grown exponentially," said Rajiv Bakshi, vice president of marketing for Discovery Networks Asia Pacific.

"Channels which have content that match these aspirations, will do well."

CBS Studios International and Reliance Broadcast Network have formed an entertainment venture in India to launch three English-language niche channels by the end of 2010. DEN networks, one of India's largest cable television companies, has announced the launch of the Baby First channel.

Fox International Channels, a subsidiary of the Fox Entertainment Group part of Rupert Murdoch's News Corp., also announced seven new niche channels in India this year, including Fox Crime, FX and Baby TV.

Discovery recently launched Discovery Turbo, a 24-hour channel dedicated to car enthusiasts and Bakshi said there was a perceived customer demand for that kind of niche channel.

"There are 12 to 14 auto magazines in the market and obviously all of them have consumers," he said. "So isn't that same consumer looking for similar television content?"

Television audience measurement figures show Turbo's channel share in the infotainment space rose to 1% in just four months.

Niche channels provide a more cost-effective medium for advertisers looking to target a select group of audiences, said a KPMG report.

"As long as channels replicate one another, the audience and hence revenue will always fragment," said Punitha Arumugam of Madison Media, a media-buying firm.

At the same time, with most Indian families owning just one television set, niche channels may still find it tough to dominate the market.

"While single TV homes do pose a challenge for niche channels, we look at it as a growth opportunity," said Bakshi. "People have changed in terms of likes and dislikes."