Nepalese television channels When it comes to advertisements

Mahesh Swar

There were those days, when I used to climb on the top of my house top at Nepalgunj, trying to align the antenna toward the Indian territory and ask about the clarity of picture on television at the ground floor. Times having changed, now I can watch TV on my mobile set anywhere. Techonology has taken a big leap to bring TV to every household- rich and poor.

This led to the popularity of local and international channels among Nepalese viewers of all ages and class. It was the only and easy means of entertainment for people in Nepal. By 2003, Indian Channnels i.e Star, Sony, Zee as an entertainment channel and AajTak, Star News as news and sports and documetry channel had a high grip on Nepalese viewers. Nepal Television, Channel Nepal and Nepal 1 had tough time pulling viewers towards the local channels. Easy access to cable network and high quality of programmes content presented by the Indian and foreign channels gained popularity.

The TV industry has registered a new height in terms of revenue by reaching Rs. 7,50,000,000 in 2008/2009.. This is 25 to 30% growth compared to the previous year. It was only around Rs.3,00,000,000 in 2003. This growth has attracted new entries in the industry and competitors at the same time. Compared to the revenue growth rate, there is cut-throat competition among the local channels to grab the market share in terms of revenue and viewers. And, the right strategy in such a market situation can only assure survival. This is only possible if TV channels reduce advertisement tariff.

The Nepalese TV industry has to pass through rollercoaster ride to reach a stable position, but at this moment it is facing major challenges.

First and foremost is advertisement rate reduction. The cut-throat competition has led to cuts in advertisement rates among local television channels resulting in low quality programmes and even yellow journalism. The industry holds lowest per-visibility cost compared to any other media in Nepal. There is no research data that give the actual viewership of any programme at any particular time. There is no TRP (Television Rating Point) system, which helps our programmes to secure low commerical rate compared to its production costs.

The recent Indian Primier League recorded the peak of advertisment rates in the Indian channels to a whopping INR Rs.10,00,000/- per 10 seconds. However, each 10-second TVC cost in Nepalese programme at the lowest and highest is Rs.100 and Rs.7000 respectivley. The competition has made it possible for the advertisers to distribute their promotional budget among all television channels. This is all due to the lack of clear vision and marketing, and myopic management.

In fact, the advertisers' total advertising budget is not growing in comparison to the discount tendency of channels. Hence, they have been benifiting from this. Here comes the role of advertising agencies, which play the pivotal role between media and clients.

The second factor is advertisers or clients. It has been a few years that clients have started considering TV channels as their first choice of promotional medium in Nepal and the entry of new advertisers, except for the traditional ones, gives hope for high growth of advertisement revenue.

Normally, organizations in the global context spend big amounts on advertisements, and plan the advertisement budget in advance since they consider advertisements as one of the key tools of marketing to promote their products and generate higher sales. But, advertisers in Nepal consider advertisements as expenses rather than investment for their products and cut their advertisements if they face any problem or any Nepal Banda takes place to reduce their variable cost. This indicates the advertisers' mentality towards advertisements and the media.

The third factor is free availability of Indian and other international channels to every household in Nepal, through the cable network. These high-budget Indian and other channels are boardcast via satelite.. Most of the Nepalese channel follow the same route to reach out to the households targeting the same viewer groups and so local channels compete with Indian and other international channels for their viewers' share in most of the urban and semi-urban Nepal. Big-budget Indian television shows such as “Indian Idols" and so called "K series” compete with our low-budget programmes such as “Jire Khursani" and "Ghar Beti Ba”. In such a situation, attracting local viewers toward local channels becomes a major problem for local TV channels.

Load shedding is a problem lowering advertisement revenue of TV channels. With this, the advertisers have started reducing their advertisement budget, and in some cases removed their TV advertisements and started using other media vehicles. At the peak load shedding hours, the TV channel revenue drops off by 60 to 80%, affecting the industry badly. This is becoming one of the major threats for the television channels these days.

Swar is AGM,

Terai TV Network

Mahesh@teraitelevision.com