Preparations for the launch of Television Eighteen's new general English news channel are in full swing.
Though officially it is slated for a launch in the last quarter of 2005, the internal target is said to be August. Says TV18's chief executive Haresh Chawla: "Already 65 people are on board. We expect to hire about 300."
A TV18 Group initiative, the channel will be launched under a new company, India Broadcast News. "TV18 will have a 74 per cent stake in the channel, while the remaining 26 per cent is being kept for employees stock option," clarifies Chawla.
He adds that NDTV's erstwhile managing editor Rajdeep Sardesai and his colleague Sameer Manchanda, who're spearheading the venture, will hold a big chunk of the shares.
Confirms India Broadcast News' Editor-in-Chief, Sardesai: "I am not an investor but a stakeholder."
TV18 plans to raise $50 million from the international market for expansion. "The English channel requires only about Rs 100 crore (Rs 1 billion) so the money will be used for other channels in the future," says Chawla.
Sceptics, however, wonder whether a company valued at $80 million can raise $50 million so easily. TV18 says it's not an issue.
"All the blue chip companies are willing to lend us money as we are highly profitable," says B Saikumar, TV18's vice president (sales & marketing). Also, the valuation is based on CNBC and does not include the four-month-old Awaaz, says Saikumar.
But the new English channel is not the only reason why TV18 is celebrating. It is equally pleased with its Q4 results: revenues from news operations are up from Rs 241.36 million in Q3 (Oct-Dec 2004) to Rs 310.96 million in January-March 2005.
The company's profit (after tax) also surged to Rs 101.11 million from Rs 82.51 million. "Our advertising revenue for the year has touched Rs 100 crore (Rs 1 billion) and we're leading the market in the English news genre," says Chawla.
The company offers TAM figures for over a year to buttress its point: CNBC-TV18 claims a 39 per cent share of the English news market between April 2004 and March 2005.
NDTV's 24X7, it says, trails at 38 per cent. The figures are for the all-India, 25-year plus male viewers in the SEC AB category during week days.
"Even in the last two weeks of April 2005, we're ahead of NDTV 24x7," says Saikumar (see graph). In the week beginning April 17, CNBC's market share was 42 per cent while 24X7 trailed at 32 per cent in the same target audience.
NDTV's director KVL Narayan Rao finds CNBC's claims "mystifying". His latest TAM figures on market shares: NDTV 24x7:41.1 per cent and CNBC: 23.2 per cent.
"I guess it's possible to claim a lead for any channel, if, for example, you take only spectacle-wearing men in a particular age group in a particular income bracket watching at a particular time of the day!," he remarks.
"Our unmanipulated viewership data from TAM shows that NDTV 24x7 has almost twice the viewership of CNBC." Rao does not specify the period and target audience for the channel shares though.
Critics argue that comparing CNBC with 24X7 is like comparing apples to oranges as the channels belong to different genres.
Defends Saikumar: "The comparison is meant to show that the appetite for business news is growing. CNBC is the number one channel in English. When we launch general news we will occupy the number two slot too," he adds.
Agrees Chawla: "Business is a profitable space. We may launch regional business news channels later."
TV18 is also buoyed by its 25 per cent growth and claims that NDTV's growth slowed down in the last quarter. Former Star India CFO and Mumbai based consultant Sanjeev Nayyar says: "NDTV and CNBC results are strictly not comparable. CNBC has been in the business for five years while NDTV is only two years old."
NDTV's Rao, however, attributes its slowdown to seasonality. "Q3 is widely known to be the peak season for ad spends on news channels. . . So our growth is actually very high if you de-seasonalise the data. In Q4 we launched NDTV Profit and there is a time lag between the launch of a channel and ad revenues flowing in. We hope to see greater revenues being generated in this financial year."
While TV18 may be focused on adding new channels, it is also leveraging its existing content. It has a content partnership with channel South Asia World run by a clutch of Non-Resident Indians.
The channel will soon move into the United Kingdom. In the Net space, Moneycontrol.com is profitable with a Rs 6 crore (Rs 180 million) turnover. A few months back, TV18 acquired a commodities information service portal.
"We are sure that this space will grow with commodities exchanges developing," says Chawla.