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Doordarshan is set to revamp its content and advertising strategies in a big way in order to transform its finances.
The public sector broadcaster has already given year-long advertising contracts to big advertisers like Hindustan Lever, Procter & Gamble and Dabur and is predicting these arrangements would contribute 25 to 30 per cent to its coffers.
"We have signed year-long contracts with these advertisers. Such arrangements, while ensuring a stable ad revenue and attracting smaller advertisers to our platform, would be major revenue drivers in the future, accounting for over a quarter of our revenues," Doordarshan Director-General Naveen Kumar said.
The contracts would be crucial for DD as it is a free-to-air bouquet of channels and hence, earns nothing by way of subscription revenues. It generated Rs 960 crore (Rs 9.6 billion) in gross revenues last fiscal, up 81 per cent from Rs 530 crore (Rs 5.3 billion) in 2004 and might break even by 2008 -- unthinkable till a few years ago.
"Our costs are roughly about Rs 1,200-1,300 crore (Rs 12 to 13 billion) and if the growth momentum continues, in two years or so, we could be self sufficient and not relying on government funding," Kumar said.
Probe Kumar as to how he plans to continue the high revenue curve and he replies : "One way would be the long-term ad contracts. We are also looking to promote DD Sports in a big way by marketing the sports properties we have aggressively and bidding for the exclusive rights of others."
But is there enough sports content to earn big bucks for a free-to-air channel like DD Sports and would bidding be easy with the prices of cricket properties going through the roof?
"It doesn't have to be cricket initially. We can bid for events in tennis, badminton, hockey etc. We already have rights to the Winter Olympics, the next Asian Games, the Commonwealth Games and the Olympics. With aggressive selling, our ad revenue from these can touch Rs 50 crore (Rs 500 million)," Kumar said.
Another major shift in strategy that has aided DD's revenue growth is the policy of "self-financed-commissioned" programmes, which are expected to turn in Rs 120-125 crore (Rs 1.2 to Rs 1.25 billion) this fiscal.
Under the new policy, the costs and benefits are shared between DD, which has proprietary rights over the product, and the producer, who is assured a fixed sum of money, thereby derisking him completely.
"Not only do we develop a large library with royalty returns, there are no marketing middlemen now. We sell the ad slots and easily net Rs 550,000 per episode of a serial now, after paying Rs 350,000 to the producer," said Kumar adding that DD was now asking its regional channels to follow suit.
For years, DD charged the producers for only the airtime on the channel while the latter produced, owned and marketed the content.
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