MUMBAI // Reliance Broadcast Network, a media company controlled by Anil Ambani, a billionaire tycoon, announced a joint venture this week with Europe's largest commercial broadcaster RTL.
The companies aim to launch India's first 24-hour television channel dedicated to reality programming.
Switched on Indian media set for $600m to $1 billion deals through M&A in 2011. Some of the biggest deals last year include:
Network18 Group In July it signed a deal with the broadcasting company Sun Network to distribute television channels in India's 160bn rupee (Dh13.04bn) pay-TV subscription market. The new entity emerged as the industry's market leader.
Reliance Communications Also in July the company, controlled by Anil Ambani, a billionaire tycoon, announced the acquisition of Digicable, India's largest cable service providers with a subscriber base of 8.5 million. The new entity, called Reliance Digicom, was the result of a cashless, all-stock deal.
Reliance Broadcast Network It signed a multimillion-rupee agreement with CBS studios in the US in August to launch three English-language general entertainment channels in India – BIG CBS Prime, BIG CBS Spark and BIG CBS Love. BIG CBS Prime went on air in November and BIG CBS Love in March.
Eros International Media In October, this leading distributor of Bollywood films, struck a deal worth 500 million rupees with the general entertainment media giant Zee Entertainment Enterprises for broadcasting four hit films on its TV. The deal marked the start of a trend among entertainment channels for buying satellite rights of Bollywood movies.
This genre of programming enjoys the highest viewership and commands the heftiest advertising rates among the 485 registered private television channels beaming into India.
Reliance Broadcast Network (RBN) expects the new multilingual channel, which will be set up with an initial investment of 1 billion rupees (Dh81.5 million), will emerge as a new TV ratings magnet.
"Many channels air reality shows that enjoy high viewership," says Tarun Katial, the chief executive officer of RBN. "But India lacked a 24-hour reality-based channel. We aim to fill that gap."
In recent years, a glut of reality programmes - mostly loud and sassy renditions of US and UK versions - has wooed India's growing television-viewing audience like never before. They put contestants, both celebrities and ordinary people competing for big prize money, in unscripted but deliberately manufactured situations that titillate viewers.
Last year, Bigg Boss - the Indian version of the hit UK reality show Big Brother - aired on the general entertainment channel Colors and smashed all previous audience rating records.
The show, which attracted 224 million viewers around the world, depicted the verbal duels and catfights between a renegade armed bandit, a giant wrestler, a cross-dressing Pakistani television celebrity and a bunch of Bollywood starlets - all locked up for 14 weeks in a large house fitted with multiple cameras. Audience ratings peaked when the show got the US actress Pamela Anderson, dressed in a white saree, to live with the housemates for a short while. Viacom 18, the media giant that owns Colors, reportedly paid her US$550,000 (Dh2 million) for her brief appearance.
There are fewer than 15 general entertainment channels (GEC) that air reality programmes. But they control the largest share of viewers and the advertising market of all television channels.
TAM, a TV ratings agency in Mumbai, estimates the GEC share of viewers grew to 29.6 per cent last year from 22.6 per cent in 2007. Together, they command about 30 per cent of the 100bn rupee advertising expenditure on TV, according to the media investment agency VivaKi Exchange. Besides ads, reality shows generate about one third of revenues from India's 811 million mobile phone subscribers, who text in tens of millions of votes for their favourite contestants.
PricewaterhouseCoopers (PwC) says India's television industry, a major contributor to an otherwise underperforming media sector, could grow at 12.9 per cent annually over the next four years to $10.45bn. In recent years, a clutch of cable networks and international entertainment companies such as Sony, NBC and News Corp have set up shop in India to tap its growing market.
Only 112 million households, representing half of India's families, own TVs but with growing incomes there is a large, unsaturated market for television sales.
PwC says the sector could grow by more than 20 per cent this year on the heels of two recently concluded cricket events - the World Cup and Indian Premier League - that boosted television advertising revenue. Those and other cricket tournaments are expected to earn advertising revenue of $405m from television broadcasts this year, up from $337m last year.
Through their joint venture, RBN and RTL also plan to launch another television channel in India this year to target male viewers with sports and extreme action-based content.
"We believe strongly in the Indian market," says Andreas Rudas, RTL's executive vice president. "It is a market with a young population, which loves TV, and it has an impressive potential for future growth."
