June 9 (Bloomberg) -- Billionaire Anil Ambani’s Reliance Broadcast Network Ltd. is targeting fourfold revenue growth in the next three years, driven by reality television shows and the proliferation of TV sets in rural India.
The Indian broadcaster aims to boost revenue to 10 billion rupees ($224 million) in the year ending March 2014 from 2.5 billion rupees in the year ended March 31, Chief Executive Officer Tarun Katial said in an interview yesterday. Growth will be fueled by demand for local-language programs in India’s “Hindi heartland,” reality shows, and extreme sports, he said.
Rising disposable incomes and low penetration of cable TV are stoking growth in India’s satellite TV business, where Ambani faces competition from Bharti Airtel Ltd. and the Tata Group. Television industry revenue in Asia’s third-biggest economy may more than double to 630 billion rupees in 2015 from 297 billion rupees last year, KPMG said in a March 19 report.
“Competition is intense now in every element of the broadcasting market here,” said Rajesh Jain, executive director at KPMG India Pvt. in Mumbai. “Unless you’re able to build uniqueness and consumer loyalty, you won’t be able to garner advertising revenue.”
Reliance is getting ready to premiere “India’s Sexiest Bachelor” this month through a joint venture with CBS Corp. and plans to start a male-oriented extreme-sports channel and a reality TV channel through a separate venture with RTL Group SA.
“Reality shows like ‘Big Brother,’ they are now going to find their way into India more and more,” Katial said at the company’s headquarters in Mumbai. “Voyeuristic content wasn’t really seen in India too much, until now.”
Reliance Broadcast fell 1.5 percent to 69.60 rupees at the 3:30 p.m. close of trading in Mumbai. India’s benchmark Bombay Stock Exchange Sensitive Index, or Sensex, slipped 0.1 percent. The stock has declined 17 percent this year, compared with the Sensex’s 10 percent drop.
The company’s television revenue may rise to 40 percent of total sales in 2014 from less than 3 percent last year, when the business began, Katial said. Radio will account for 40 percent of revenue, down from 70 percent now, he said.
Dish, Sun TV
Reliance’s digital TV business had 2.75 million subscribers at the end of May, said Cheryl Waldiya, a spokeswoman for Reliance Broadcast in Mumbai. By comparison, Bharti, which leads Ambani’s Reliance Communications Ltd. in mobile-phone subscriptions, had more than 5.6 million customers for its direct-to-home TV service at the end of March.
Competitors also include Dish TV India Ltd., billionaire Kalanithi Maran’s Sun TV Network Ltd. and Tata Sky Ltd., a venture between the Tata Group and Rupert Murdoch’s Star Group.
Satellite TV subscriptions in India rose to 32.1 million at the end of December from 19.1 million a year earlier, according to data from the nation’s telecommunications regulator.
To tap rising ownership of TVs in rural northern India, Reliance started a Hindi-language analog and digital television channel in April that caters to local tastes with programming focused on humor, music and Bollywood films.
“The Hindi heartland is really the most media-dark area, and advertisers are looking to reach more and more audiences there,” Katial said.
The region encompasses the states of Uttar Pradesh, Madhya Pradesh, Bihar and Jharkhand, home to about 410 million people. The channel, Big Magic, has 8 million subscribers, he said.
UTV Software Communications Ltd.’s Bindass channel is also targeting the Hindi-language market with a reality show called “Emotional Atyachaar,” which roughly translates to “Emotional Torture.” The show tests people’s fidelity to their partners by placing them in tempting situations.
Bloomberg TV, owned by Bloomberg LP, is in a strategic partnership with UTV Software, which owns and operates Bloomberg UTV, a 24-hour English language business and financial news outlet in India.
Even in urban India, where western lifestyles are popular, viewers demand TV shows with an Indian bent, Katial said.
“It must adapt, or relate to our own life,” he said. “Unless you do that, you can’t really survive.”
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