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 the TV sets in their room. Poor cousins to the big-budget satellite channels they may be, but these channels have added an undeniable local flavour.
Now, in the face of a crippling power cut scenario — ranging from 12 to 14 hours a day — the channels are facing a battle for survival. For, 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 in the evening prime television-viewing time.
Most of the corporate clients have either stopped their advertisements or reduced the payments. Only the local advertisers — in most cases, local stores — have retained their advertisements, that too at highly subsidised costs.
“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 the power cuts. The advertisers feel that their advertisements do 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.
Auction of carriage fee
Last year, the State government-run multi-system operator auctioned the 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 the power cuts. Most of the channels that got the licences were launched just months away, 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 would be discontinued if we did not pay up this month," says one channel owner from Coimbatore. He borrowed Rs. 15 lakh in November but already lost out on the 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 cut has made us to eat our promise."
Selladurai of Nandi TV said: "Seventy per cent of our advertisers have stopped advertisement. We have incurred a heavy loss. Though the channel is 24-hour channel, we could not keep our word due to unscheduled power cut." He pays a carriage fee of Rs. 2.5 lakhs per month and has already invested Rs. 20 lakhs We are paying Rs.2,47,192 to Arasu cables.
R. Arun, who has been running two channels — Jeyam TV and Media TV — in Erode for more than 15 years, is ready to close down one of them. “I pay close to Rs. 5 lakh a month as carriage fee. The overhead costs and various operating expenses run to the tune of Rs. 2 lakh a month. I am facing a loss of Rs. 2 to 2.5 lakh a month per channel following the drastic fall in ad revenue,” he says.
“Electricity should be available at four levels — at the office of private channels, in the Arasu Cable network office, with the local cable operator and at the end user — to ensure that the advertisement reached the masses,” K. Ramaswamy of Madurai-based Jeyam TV says. “But, this chain breaks at the last two levels often. At least on seven occasions, the power failed at the Arasu Cable network office in Madurai for several hours.”
The federation of local cable channels has already appealed to the de facto MSO in the State Arasu Cable for help to overcome the crisis. The major demand is for a concession on the 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).