Hidden Treasure

Until recently, the first place Viacom18 showed Bollywood films after their cinematic debut was Colors – Viacom18’s Hindi general entertainment channel (GEC) that began life less than three years ago in 2008.

Bollywood content has traditionally played a key role helping young entertainment channels gain traction in India, with Hindi film libraries forming the backbone for many of the major Hindi GECs that launched in the 90s and early 2000s.

Over the last three to four months, Viacom18 has changed tack however, premiering movies before they appear on Colors in a new pay-per-view slot created especially for DTH platforms instead. While hit films appear on the channel one to three months after their theatrical premiere, this new window slots in two weeks before that.

“By creating an on-demand window with DTH platforms, we have acted upon an opportunity to monetize the rights before the mainstream satellite television premiere happens on Colors,” explains Viacom18’s chief commercial officer and head of international business, Gaurav Gandhi.

Innovation and experimentation
Sky-high costs and intense competition in Hindi entertainment are fostering innovation and experimentation around content rights in India, where broadcasters with few immediate opportunities look to squeeze every ounce of value they can from program libraries – a well-tapped resource in Western markets that is starting to attract more attention in Asia too.

In India however, as in many of Asia’s growth economies, there is little scope to eke out additional revenues from content libraries today. Pirated DVDs are widely available and the majority of pay-TV homes subscribe to congested analog services with no room for additional channels; consequently, the vast majority of revenue from a piece of content in India comes from advertising sold around a show’s first run, or a film’s debut on linear TV.

After this, the most immediate opportunities are overseas, either from channel distribution in markets with large Indian communities (the preferred option), or program sales to linear channels in other markets where local production is relatively underdeveloped.

That hasn’t stopped Gandhi from scouring the domestic market for other ways Viacom18 can exploit its content investments, making sure he secures rights to emerging digital platforms such as mobile or VOD.

Digital distribution platforms may present tiny revenue opportunities today, but Gandhi feels these rights still give Colors an edge, as rivals may not have included them in multi-year deals signed in the past.

“We are not doing a Hulu as yet, but we have the rights and the mindset to do it,” he says. “As the market matures, we will be the first to go.”

Online video, likely to evolve in India as an ad-supported service, remains nascent in India, though the current rollout of 3G mobile services should provide rights holders nearer-term opportunities by offering bespoke content packages to telcos, Gandhi adds.

A billion-dollar mobile market
India’s mobile value-added-services market has already grown into a billion-dollar business built on 2G networks, with music as a key driver, prompting broadcasters to explore the potential for video as bandwidth improves with 3G.

India's first 3G services have just started rolling out however, and it is Viacom18’s new pay-per-view window, currently offered by two DTH platforms, Airtel and Tata Sky, that is bringing in the most incremental domestic revenue today.

It’s a small window that suits films rather than any other genre, capitalizing on the hype generated around new Bollywood releases and pitched at consumers who may buy the film on DVD, legally or illegally, rather than those waiting to see it on TV.

Current revenue is relatively insignificant, though Gandhi is still testing out the business model, experimenting with staggered price points and offering it to other DTH platforms after the film has appeared on Colors, while mulling the idea of offering the service to international players who already carry Colors as well.

This is an edited extract from a feature published in the Q4 2010 edition of The Asia Media Journal. The latest issue of The Asia Media Journal is available in full here.