While originals are a common term in the video streaming space, they are less heard of in the television industry. And that's because TV channels offer new shows all the time. But not all of them.
Free-to-air (FTA) channels depend on library content which they acquire from big broadcasters.
But lately even FTA channels have started investing in originals. Dangal TV, a free-to-air channel, launched around five originals in 2020-21 and now ShemarooTV, a free-to-air general entertainment channel (GEC), which was launched in May last year, launched a new show on February 22 called Jurm Aur Jazbaat starring Ronit Roy.
But can an original help especially with FTA being a cluttered space?
Hiren Gada, CEO, Shemaroo Entertainment, said, "All large broadcasters (in the FTA space) are running 100 percent repeat programming. There is nothing new over there. Only one or two channels are offering originals. And consumers are aspirational. While they have opted for FTA channels, they want quality of content that one can find on paid channels."
After waiting for a year to launch its first original, ShemarooTV has planned a few more originals, but Gada did not share much about the content lineup for this year.
"Due to the COVID-19 pandemic, TV ad revenue was challenged. So, there was no point putting out fresh creation and investment. Hence, we focused on establishing the channel, distribution. But now we are building one content at time. There already is one hour of fresh programming on the channel and there are more shows in the pipeline," he added.
But are originals feasible and will they help?
Karan Taurani, Vice-President, Elara Capital, thinks that it will hardly make any difference.
"It is a try and test model. The quality of viewership FTAs have, I don't see premium pricing for ads on these channels. It won't move the needle much. Won't attract large advertisers."
Explaining more why originals won't help much, Taurani said, "The problem with FTA is that after the New Tariff Order (NTO), consumers are forced to move to selective viewing. Gone are the days when you had access to 800 channels and consumers paid a lump sum amount. After NTO 1.0, number of channels in a household came down by 15-20 percent. That impacted ad spends. While lion's share of ad spends was skewed to top two channels even before NTO, after TRAI (Telecom Regulatory Authority of India) order, the ad gap widened between top two channels and the other channels."
Advertisers prefer big broadcasters as they have reach and cross selling bouquet offer, pointed out Taurani.
In the FTA space currently, the top two channels are Star Utsav and Zee Anmol.
"ShemarooTV stands last in the pecking order. So, it will be tough for them to generate big amounts of advertising revenue," added Taurani.
He also pointed out that the kind of money large broadcasters have in terms of getting money from advertisers, it is not there with the smaller broadcast groups. "So, it is a problem for Dangal TV and an even bigger problem for ShemarooTV."
Taurani gave example of ad revenue trends on different FTA channels.
"Zee Anmol was making around Rs 220 crore in terms of ad revenue at its peak before NTO was implemented. When they moved from FTA to pay their ad revenue went down to Rs 60-70 crore in around two-three months. Dangal TV before NTO was making ad revenue of Rs 20-40 crore. But the channel's revenue did not increase to more than Rs 100 crore at its peak where it had around 40 percent viewership share."
This shows that Dangal TV despite getting high viewership share, was not able to scale up to half of what Zee Anmol earned in terms of advertising revenue.
The point Taurani is trying to make here is that in the broadcasting business, it has now become a play where top two channels have a large share in ad revenue and rest of the channels have a small share which makes the business not sustainable especially with distribution and content cost.
While FTA is a crowded space, Gada is confident about ShemarooTV.
He thinks that the FTA space is under indexed in terms of monetisation. But "in the next three to five years it is going to get corrected. So, many brands that haven't targeted FTA channels will do so in the coming years," said Gada.
He also said advertisers have accepted ShemarooTV as a broadcaster and they have seen good participation from them. So far, FMCG, food, education brands have come on board. "Every week we are signing new advertisers," said Gada.
While Gada thinks that FTA is the best way to enter the viewer universe as a large base of audience can sample a channel, Taurani thinks that they are operating in a very cluttered space and should focus on digital.