Power cut, fall in ads, rise in carriage fee add to their woes
Anyone who has travelled to interior Tamil Nadu and checked into a small hotel or lodge over the past decade would not have missed it: local cable channels on TV sets in their room. Poor cousins to the big-budget satellite channels they may be, but these channels added an undeniable local flavour.
Now, in the face of crippling power cuts ranging from 12 to 14 hours a day, these channels are battling for survival. There has been a big fall in advertisements, accompanied by an increased monthly carriage fee paid to the MSO (multi-system operator).
The power cuts happen over two four-hour slots in the morning and afternoon, and a two-hour slot during the evening prime television-viewing time.
Most of the corporate clients have either stopped their advertisements or reduced payments. Only local advertisers — in most cases, local stores — have retained their advertisements, that too at highly subsidised rates.
“I'm suffering a revenue loss of Rs. 1 lakh a month,” says G. Anantharaj, owner of Raja TV, a channel beaming in Tirunelveli. He paid around Rs. 8 lakh towards security deposit and other charges to the MSO Arasu Cable. Further, there is a recurring carriage fee of Rs. 3.60 lakh every month. Close to Rs. 10,000 goes every month for operating a diesel generator to keep the signals beaming.
In Madurai, Jeyam TV has been forced to shut shop. Six major advertisers — textile and jewellery showrooms — had written to the 10 channels in the Madurai Corporation limits asking them either to stop airing their advertisements or cut their budget by 50 per cent.
“Our revenue has fallen by 60 to 70 per cent because of power cuts. Advertisers feel that their message does not reach the masses as people do not get to watch television for most part of the day,” T.R. Lingaram, president of Federation of Tamil Nadu Arasu Cable PLC Association, says.
Last year, the State-run multi-system operator auctioned licences for local channels, and also fixed a carriage fee, and most of the channel owners did not know that they were cutting a hard bargain ahead of power cuts. Most of the channels that got the licences were launched just months later, and are finding the going tough already.
“We paid an advance of Rs. 10 lakh as carriage fee for two months during the launch. Because of poor sales, we could not pay the carriage fee for the next two months. We were told our services will be discontinued if we did not pay up this month,” says a channel owner in Coimbatore. He borrowed Rs. 15 lakh in November but has lready lost out on Deepavali ads.
There are usually contract agreements between the channels and the advertisers that go something like: the advertisements would be aired during the 32 commercial breaks (once in every 30 minutes) between 7 a.m. and 11 p.m. every day. With just six hours of power in a day, advertisers don’t see the value in supporting local channels.
Senthil of Zen TV in Thanjavur said: “Any TV channel is expected to advertise that it will run for 24 hours. The power cuts have made us eat our words.”
Selladurai of Nandi TV said: “Seventy per cent of our advertisers have stopped advertisements. We have incurred a heavy loss. Though the channel is 24-hour, we could not keep our word due to unscheduled power cuts.” He pays carriage fee of Rs. 2.5 lakhs per month and has already invested Rs. 20 lakh.
R. Arun, who runs Jeyam TV and Media TV in Erode, is ready to close one of them. “I pay close to Rs. 5 lakh a month as carriage fee. Overhead costs and various operating expenses come to Rs. 2 lakh a month. I am facing loss of Rs. 2 to 2.5 lakh a month per channel following the drastic fall in ad revenue.” The federation of local cable channels has sought Arasu Cable’s help to overcome the crisis. The major demand is concession in carriage fee.
Anchored by Karthik Subramanian, with inputs from S. Ramesh (Erode), S.P. Saravanan (Salem), G. Srinivasan (Thanjavur), S. Sundar (Madurai), P. Sudhakar (Tirunelveli), Olympia Shilpa Gerald (Tiruchi) and P.V.V. Murthi (Vellore).