6 October 2014: Chhota Bheem (Little Bheem) first appeared in India on Turner International’s Pogo in 2008. The dhoti-clad little boy named after a mythological character is set in a different time and place with a different set of friends from his namesake. He and his friends Raju, Jaggu (a blue monkey), Chutki, Kaalia and princess Indumati get together to fight any evil forces that threaten their village of Dholakpur.For a generation of parents brought up on Tom & Jerry and Mickey Mouse, the laddoo-chomping Chhota Bheem was a little too rustic, too simple. But millions of children in the world’s second largest TV market fell in love with him.Chhota Bheem became a resounding hit that has dominated prime time on kids television in India for over six years now and catapulted Pogo from a down-in-the-dumps sibling of Cartoon Network to the number one slot.Chhota Bheem represents, arguably, the biggest change taking place in the kids’ television market in India – the growth of local home-grown characters.Local animation characters, programming and films have found willing takers in broadcasters. Roll No. 21, Mighty Raju, Little Krishna, Motu Patlu (Fat Guy Skinny Guy), Pakdam Pakdai (Catch Catch) and Chorr Police (Thief Police) are among the bigger hits on popular kids channels.Then there are other smaller more-evolved live-action shows such as ZeeQ’s Teenovation or Engineer This, which have found critical and institutional acclaim and helped move the market beyond American characters such as Johnny Bravo or Popeye or the dubbed Japanese properties such as Shin Chan (also known as Crayon Shin-Chan) or Doraemon.“This genre has never seen as much original content as today,” says Nina Elavia Jaipuria, Viacom18’s executive vice president and business head, kids cluster. The company runs, among other channels, Sonic, Nick and Nick Junior in India.The average for acquired versus local content is now 60:40 for most broadcasters against 90:10 in 2008. This in turn has led to a huge rise in viewership for the genre. From 5.4% in 2008, kids television now stands at 7.5% of the total time spent by 800 million Indians on television. It is, after general entertainment and films, the largest genre of programming consumed by Indians, roughly on par with news television. The total number of kids channels, across languages, has more than doubled from about 10 to 22 currently.This is where the good news starts petering out.For all their popularity, kids channels get just about 4.5% of the US$2.2 billion that advertisers spent on television in 2013. That is just about US$99 million compared to US$308 million (14% of TV advertising) that news channels took.This makes kids one of the most under-indexed categories on Indian television. Almost all other genres get ad revenues proportional to their viewership share or a little more than that. This is the biggest bugbear for an otherwise rocking sector.The Digital Play AreasHowever, as digitisation takes root in India, much of this could change. Of the country’s 160 million homes, more than 86 million are already digital. This figure is based on numbers provided by broadcast regulator, the Telecom Regulatory Authority of India (TRAI), and Tam Media Research, the local rating agency that is a Nielsen-Kantar joint venture. As more than half of India’s TV homes migrate onto a transparent grid, the market is changing in three critical ways that make it easier to monetise the popularity of local content on kids television.One, ever since digitisation began at the end of 2011, the reach and sampling for kids channels has risen dramatically – a 25% growth in total viewership of kids channels in 2013 against 2012.“Kids channels have never been as big as GECs and therefore LCOs (last mile cable operators) never prioritised it. Therefore, there was bad visibility and low viewership. With digitisation, access becomes easier,” says Rajiv Chilaka, managing director and founder of Green Gold Animation, which created Chhota Bheem."The kids genre has never seen as much original content as today.” Nina Elavia Jaipuria, Executive Vice President & Business Head – Nickelodeon, Viacom 18 MediaIn addition, digitisation brought with it Electronic Programming Guides (EPGs) which were previously non-existent in India. “This helps kids navigate. Earlier, we were all over the place, now we are all clustered together,” says Jaipuria.Two, digitisation has brought hope for pay revenues, a black hole in the structurally flawed US$7.7 billion Indian television industry. Of the roughly US$5.5 billion collected on the ground, just about 20% came back to broadcasters in an opaque, analogue market. With digitisation comes transparency and therefore a plugging of revenue leakages. For most large networks, pay revenues from digital homes already surpass those from analogue households.Three, with digitisation comes the ability to slice and dice the market better and leverage the heterogeneity that is intrinsic to India. This is not just by languages, a given with most kids channels, but also by different age groups in a market where “kids are growing up faster”, as Krishna Desai, Turner International’s executive director and network head, kids, South Asia, puts it.No KiddingMuch of this sounds like there will be a big rush in volumes of viewership and therefore more advertising and pay revenues. That however may not be so easy.ZeeQ, the first kids channel from the US$714-million Zee Entertainment Enterprises, is a great example of the contradictions of the Indian market for kids television.ZeeQ was born in November 2011, just when mandatory digitisation was taking off. Its premise was thought-provoking programming that helped develop kids’ minds. For example, Teenovation, produced in association with the National Innovation Foundation (of India) explores the stories behind innovations such as automatic food makers and shock absorbers for crutches, among others. The idea was to sell the channel a la carte and charge Rs82/US$1.34 for the high-end original programming. After two years, ZeeQ had just 100,000 subscribers in a booming market. Early this year, the broadcaster changed tactics and joined the kids package on digital platforms. In making this bid for reach, it has stuck to the 86 million digital homes only because, “cable is shrinking”, says Subhadarshi Tripathy, cluster head, ZeeQ and Khaana Khazana."Effective ad rates [for kids channels] are pathetically low.” Subhadarshi Tripahty, Cluster Head, ZeeQ and Khaana KhazanaDespite the need for a rejig, something about the channel is working. It ranks highest among all kids channels on time spent, Tripathy says, adding: “That is a pleasant surprise since we do not have the slapstick humour that other channels do.”The ZeeQ story is symptomatic of a market in the middle of a transition – on the distribution, programming and audience fronts. Distribution will sort itself out once digitisation, due to be completed by December 2015, is over.On the programming side, however, the transition could have a few bumps. This is because as the ratio of local to acquired programming changes, costs have been rising since the quantity of programming needed is going up.Ten years ago, the acquisition strategy focused on 10 shows with one or two seasons of 13 episodes each. Now Chota Bheem is 80 episodes, and Roll Number 21 is 25-30 episodes. “So acquisition also looks at 80-90 episodes since you need five seasons as least,” says Desai.Against the US$1,000-US$15,000 an episode for acquired programming, commissioned shows could start from US$25,000 and even go up to US$100,000 an episode, he adds.While acquiring is not a problem since Japan, Russia, the E.U., Switzerland, France and Korea are always trying to sell their animation in India, thetrouble is meeting the demand for local content.There are very few firms such as Green Gold Animation since India has remained a hub for backend animation for the Hollywood majors. The whole process of upgrading to creating new characters and stories on a large scale will take time.Cartoon Network, for instance, depends heavily on its library. “We don’t have three hours of fresh programming every day (unlike general entertainment channels),” says Desai. Besides the library, Turner is also turning to movies. In the third quarter of 2012, it screened live-action film Bhootraja aur Ronnie and is working at developing four to five feature films.None of this necessarily means that ad revenues will increase. For one, “kids brands don’t contribute more than 10% of the total base of advertisers,” says Juhi Ravindranath, Turner International’s vice president, ad sales, South Asia. More than half the advertisers who come onto kids channels are marketers of female products. This is because, usually, mothers in India watch the shows with their kids – either because they are feeding them at that time or just hovering around checking on them. So cars, insurance and mobile phone ads rub shoulders with biscuits and noodle advertising.The second big challenge, Ravindranath says, is getting the 80% of thetime spent on non-kids channels, by kids, back to its rightful place.But the big networks with their strong general entertainment channels (GECs) make for formidable competition. Chilaka points out that more than half of TV viewers are under 16. “This has not been taken advantage of so far because advertisers are never quite sure if this is an audience,” he says.The third, says Tripathy, is that, “the effective rates are pathetically low”. These range between Rs150-Rs1,700 (US$2.46-US$28) for 10 seconds, about a sixth of what news channels get.What about consumer product licensing or digital, the sources that Disney or Turner bank on globally? “From a brand engagement point of view, digital and consumer product licensing is a great story, but it doesn’t do so well,” says Ravindranath.On digital, for instance, most advertisers are focused on youth and males. One area of potential could be games. Most research suggests that kids are spending a lot of time playing games, says Desai. But that is a long way from becoming a revenue stream.If only Chhota Bheem could persuade advertisers to up their budgets... - Vanita Kohli-Khandekar, twitter.com/vanitakohlikContentAsia Issue Four