The state of Tamil Nadu has 12 general news channels and aggregate to an approximate Rs. 100 Crore market from Non-Local (corporate advertisers).
This consumes 60% of their advertising time inventory with the leaders (Polimer News, Thanthi TV and PuthiyaThalaimurai) having to exceed the 12 minute/hour advertising cap to additionally cater to State-specific advertisers.
The state is media-isolatable hence can command its own (in terms of CPT – Cost Per Thousand/CPRP – Cost Per Rating Point). This reality however is marred due to the number of options available to broadcasters and most importantly price/rate pressures from national advertisers. A quick glance at audience (GRP Share) to revenue (Revenue Share) indexing demonstrates this very clearly –
“Are the under-leveraged sellers less capable?” we might wonder. Maybe in some cases but in most cases this is an outcome of supply and demand, the good old economics at play!!
Economics are rendering the top 3 players garnering 75% of revenue in the Tamil Nadu news advertising market. This is triggered by the age-old media planning habit of picking channels top-down, plans start with inclusion of leaders (in pursuit of reach). These economic and behavioral realities drive the lower ranking channels to price themselves to the market forces, interestingly also impacting the ability for leading channels to increase rates
AIDEM has looked at this state very closely, as a matter of fact also met with some specific channels that besides increasing their respective revenues will most importantly, affect a growth-fueling economic model – we call it Strategic Aggregated Monetization (SAM).
How is AIDEM unleashing SAM in the Tamil Nadu News Marketplace?
- We have identified and met the SAM prospects with the obvious opportunity
- We have presented an objective, transparent and professional methodology of revenue distribution that will be unlocked for each player that we are forming the first SAM with
- An illustration of SAM (S1 – First SAM) benefit to respective asset owners –
- S1 will capture nearly 50% of the existing advertising market (~50 Crores)
- Thanti TV will improve its average rate by 56% and reduce its inventory load to 71% making them a 20% revenue share owner
- News 7 Tamil will more than triple its current revenue
- Sathiyam TV will nearly increase its revenue 5 fold its current level
- Seithigal will multiply its current revenue 15 times and garner its rightful share
4. AIDEM will ensure absolute transparency through a multi-party contract stating the revenue splitting methodology and dependencies
The author, Pradeep Hejmadi (amicably christened, Praddy) is a seasoned professional from the Indian media industry and the Group CEO of AIDEM Ventures Pvt Ltd. His contact details are [email protected] and can be reached on +919819600187.