India is the world’s third largest TV market with almost 138 million TV Households next to China and the USA. The television and broadcasting industry has grown tremendously over the last two decades, with an average double digit growth rate.
Overall, 2011 was a mixed year with events such as the Cricket World Cup driving up high growth despite the last quarter seeing effects of the macro-economic slowdown. New players entered the market with niche offerings like food channels and there are now more channels in the English entertainment space than ever before. Viewers are able to access niche content easily on DTH platform even in smaller markets.
2011 has been the year of consolidation in the media and entertainment industry. The year saw the biggest consolidation in the distribution business and the formation of Media Pro Enterprise, a 50:50 JV, formed between Zee Turner and Star Den. UTV was acquired by Disney, and Network18 has bought over ETV. Businesses would do what gives them the best value, and if the best chance of realising that value is through consolidation and acquisition, then this trend will continue.
The kids’ genre is the largest genre in terms of viewership after mass genres like GEC contributing to 18.3 per cent of the viewership pie (Source: TAM Media Research | TG: CS 4-14 | Market: All India | Period: 2010 – Wk 3 of 2012). In 2011, this genre not only recorded growth but also saw the entrance of new channels like Sonic. The kids’ genre grew in regional languages as well. In Tamil, for example, the share of Kids is higher than News. The continued investments in launching new channels and content prove that the kids’ entertainment space is a very viable market indeed.
Content
With consumers having a much wider choice of channels, ownership of quality content is increasingly being seen as a key differentiator for broadcasters. Once, Cartoon Network was the only kids’ channel airing international content. Fast forward to today, and there is a plethora of kids’ channels airing classic international content (like Tom and Jerry), anime cartoons (like Hagemaru), local live action shows (like M.A.D) and the latest craze – Indian animated content (like Roll No. 21 and Chhota Bheem). There’s no doubt that the kids’ entertainment space has gone through an incredible and rapid evolution.
The content of animated shows has also seen a subtle but consistent change. Initially, new animation content creators took inspiration from the lowest hanging fruit available to them – popular mythology, inspiring movies like Hanuman, Krishna and Ramayan. Then came fictionalizing these mythological stories with shows such as Krishna Balram where characters based on these mythologies were placed in fictional plots. Now, we are at a stage where the linkage to mythology has dwindled further. Series like Chhota Bheem on Pogo and Roll No. 21 on Cartoon Network just have character names similar to those in mythology. Other series like Kumbh Karan, although may invoke a linkage; in reality have nothing to do with popular mythology. Kumbh Karan is a series based on two fun loving, twin brothers.
Just as the supply side of the chain has seen evolution, the consumption pattern has also changed over the years. One shift noticed in 2011 is that kids prefer to watch fewer shows on kids’ channels than before and have begun to spend more time per show. Thus, although the viewership for the number of shows has reduced, the overall category viewership remains mostly unchanged.
The animation industry in India is also growing simultaneously where locally animated shows are the flavour of the season. The Indian animation industry was estimated to have been approximately Rs 11 billion in 2006 and it is expected to grow at a rate of 22 per cent to reach Rs 54 billion at the end of 2014 (Stockmarketreview.com) - with television estimated to contribute 65-70 per cent of overall consumption (FICCI-KPMG Report 2011).
Although the market is not as mature as its global counterparts, the growth of this segment provides immense opportunities for investment by local companies and MNCs. This can be seen in the number of kids’ channels and the percentage of animated shows on them. Between Cartoon Network and Pogo we aired the highest number of hours of animated content (25,000 half hours) in 2011.
One important factor to consider while creating content for kids is to ensure the gatekeepers approve of the content. It is thus important for content providers to assuage the fears of parents regarding loud content and the aggressive language in kids’ entertainment shows. Without parental approval it is difficult to reach this target audience as 48 per cent of parents always exercise control over what their kids watch (Cartoon Network New Generations Research 2011). Another way to garner success for content is to make it fun and engaging for gatekeepers as well as 66 per cent of parents watch TV together with their kids. For instance, Pogo has continued to hold the title as ‘The No. 1 Kids and Family Channel’ thanks to shows like Chhota Bheem and Mr. Bean that are among the top three rated kids shows by kids and adults.
Online
In today’s multiscreen playground, it’s not uncommon for kids to consume content on more than one platform. Gone are the days when the television set was the only screen in the home. Over the past decade, we have witnessed a four-fold growth in kids’ access to computers and Internet at home. Add in access in schools and cyber cafes, and now half of the kids are computer users. These “Netizes” have helped the Internet usage to grow to 18 per cent (Cartoon Network New Generations Research 2011).
What does that mean for content providers? It represents huge opportunities to expand the presence of a brand or a character in the mobile and online space through smart phones, tablets and computers. Moreover, broadcasters and content houses are increasingly working towards building anytime anywhere access to content. With technological evolution, porting these content platforms without any additional cost is expected to become a reality.
The key component to digital success is Content as well – leveraging popular content on television to these online and mobile platforms and creating content on these platforms that is engaging, innovative and unique. For instance, Chhota Bheem’s popularity on-air has definitely contributed largely to the success of www.pogo.tv. ‘Chhota Bheem Balloon Blaster’ is one of the most popular games on pogo.tv which allows fans to connect with their hero through a game. The site has seen immense success with about 500,000 unique viewers per month.
In an evolving digital landscape, there is one contestant: kids love the interactivity of online games. It’s their number one activity online.
Licensing
The kids’ entertainment market is gaining momentum at a steady pace and apart from prime television when it comes to appeasing kids, merchandising is one of the most powerful tools to connect with them.
Over the last few years, we have seen a dramatic shift in the Indian merchandising market. Merchandising, today, has transformed into a global arena; providing an array of international and local brands to choose from. We are witnessing a healthy rise of various kinds of merchandising in every product category. Growth potential is fuelled by increased product availability, creating awareness of merchandising product and most importantly, building demand and loyalty for branded cartoon character merchandise. Kids want to have their favourite characters with them (in the form of stationary, bags, lunch box, bottles, clothes, toys, etc.) whereever they go; be it school or outside or at home!
For instance, Cartoon Network Enterprises (CNE), the licensing and merchandising division for Cartoon Network and Pogo, has reflected the growth of the industry by reaping profits and growing by almost 70 per cent in 2011 and has added 680 SKUs. CNE Products are now available in over 5300 retail counters across India. These achievements were recognised by the industry thereby earning us the title of ‘Licensor of the Year’ Award by Franchise India in 2011.
In recent years, the Indian consumer has become increasingly discerning. With increasing awareness levels, our consumers want products in sync with the developed world but at relevant “Indian” prices. Identifying the right product mix which would encapsulate the demand of the Indian consumers will be the single biggest challenge for this sector. Secondly, the distribution expansion could be the single biggest game changer for this sector in the immediate future. The Indian consumers are no longer restricted to those who reside in Metro towns and shop in Modern Stores. A substantial section of them resides in smaller towns and shop via the traditional stores and will continue to do so in the future.
Expanding distribution, however, is not going to be very easy and there will be a significant cost attached to it. Piracy is the single largest threat confronting the licensed sector in India. The trade partners as well as the consumers need to be made more aware of the potential harm that pirated goods could cause for this sector to truly thrive and be on par with international markets.
However, growth and development of modern trade in India is at its peak and provides immense opportunities in building brands. The easing of FDI norms will help bringing in international players which increase the opportunities of organiising this industry and in return will benefit the end consumer.
Ad Sales
As viewers and especially as consumers, kids are a critical base, and there has been increasing awareness that kids now have a say in purchase decision-making that extends far beyond traditional categories. Today, around 63 per cent of parents involve their children in the decision making process. Thus, it becomes imperative for advertisers to engage with kids to inspire product conversion (Cartoon Network New Generations Research 2011).
But, Indian kids are a smart bunch and with increasing levels of awareness and an insatiable need to be entertained, it is not easy for advertisers to appease them. Thus, advertisers need to explore platforms that specifically cater to kids and understand their psychology better. Kids are far more receptive to products recommended by their favourite toon hero than regular campaigns.
Thus now, not only traditional advertisers like FMCG products reserve a large chunk of their ad sales spends for kids’ channels but also non-traditional advertisers like automobiles, electronic devices, etc. consciously target this platform. In 2011, nearly 35-40 per cent ad spends came from non-traditional advertisers on Cartoon Network and Pogo.
If media companies can shape a perception or catch an imagination – be it through television, mobile or online – it is the key to unlock that multi-million dollar industry. Today, we would estimate the Indian kids’ ad market to be Rs I.40-2.50 billion.
Future
The kids’ genre today is no child’s play. It is a competitive market considering the increasingly large volume of content providers. The players need to be adept to technological evolution to ensure content is adaptable to new devices being created at every heartbeat. They need to have the ability to constantly create content that is engaging and innovative so that kids don’t find it run of the mill and change their channel preferences. Wider access to content over multiple and mobile platforms will help to end the tyranny of a single TV household and we can hope for greater avenues of reach and success.
The performance of the kids’ genre in 2011 is an indication of the potential and growth of this market with the right mix. Many automobile, telecom, financial services and grocery products now target kids as well, which means this genre will continue to be attractive to advertisers in years to come. From that perspective, launching more channels, digitisation, the advent of 3G and better penetration of Internet in rural cities will only help to increase the scope of success for broadcasters provided Content always remains King!
