Two hours away from busy Mumbai lies the sedentary Aamby Valley resort. This is where Viacom18, a joint venture between Viacom of the U.S. and India’s Network18, has rigged up its sets for Bigg Boss (the licensed Indian version of the Big Brother franchise, originally launched in the Netherlands). The reality show is proving to be yet another milestone for Colors, the Hindi-language general entertainment channel (GEC) launched by Viacom18 last year. Through its unconventional programming choices, Colors has shaken deeply entrenched players in the CEG television category. For four successive weeks — 41, 42, 43 and 44 (the numbering starts from the first week of the calendar year) — the GEC has increased the gap between itself and its competitors — Rupert Murdoch-owned Star Plus and Subhash Chandra’s Zee TV.

“Our research told us that there was a fair amount of fatigue in the kind of shows that were running on GECs when we launched, and that viewers wanted something different and more relatable,” says Rajesh Kamat, CEO of Colors. “This formed the basis of our content strategy. We opted for meaningful entertainment versus pure entertainment. We were disruptive in our scheduling to break existing viewer habits — [showing] non-fiction during weekday prime time. And by paying more money to the distributors, we got ourselves placed right next to the most-viewed channel in the premium band in each market to ensure maximum walkthroughs and sampling.”

Actor Amitabh Bachchan was in many ways responsible for delivering India’s reality programming breakthrough for Star Plus eight years ago when he hosted Kaun Banega Crorepati (the Indian version of Who Wants to Be a Millionaire). Now, Bachchan is back on the small screen as the host of Bigg Boss. Bachchan has been followed to the small screen by well-known Indian film actors such as Shahrukh Khan, Salman Khan and Akshay Kumar.

The hard-nosed reality format seems to be working across the GEC vector. While some programs are licensed shows indigenized for Indian audiences, others are pure-play original formats. “Entertainment doesn’t only need to be diverting or superficial, or dumbed down to pander to the lowest common denominator,” says Siddhartha Basu, promoter of production company Synergy Adlabs, who is responsible for many of India’s hit reality shows including the hugely successful Kaun Banega Crorepati. “There should be a place for social realism in our general entertainment space, because that can genuinely connect with people’s lives, their heads and hearts to a much greater extent. The ratings of both Aap ki Kachehri [a dispute-resolution program anchored by social activist and famous retired police officer Kiran Bedi] and Sach ka Saamna [Moment of Truth, which recently created a huge controversy in India for its risque content] demonstrate there’s enough of an audience for such shows if they’re done right.”

The playing field has become crowded over the past couple of years, however, with the arrival of new challengers to Star Plus, which had dominated the Indian GEC space for close to eight years. In 2008, Viacom with Network18 launched Colors, Turner Broadcasting joined Indian production company Miditech to launch the Real channel, and NBC Universal joined NDTV to launch NDTV Imagine. Already, there has been some churn: Turner International, which inked a 50:50 joint venture with Alva Brothers Entertainment, owners of Miditech, wants to leave the JV. No new programming has been on air since July, and Real has stated that it wants to downsize operations. Similarly, NBC Universal has exited from NDTV Networks where it held 26%. In 2007, INX Media launched 9x, which was funded with the help of private equity players like Temasek and New Silk Route, but 9x ultimately folded due to ballooning costs and management issues.

That leaves Viacom, which remains invested in a healthy and viable business in India. Time Warner is reportedly negotiating with NDTV to pick up a majority stake in NDTV Imagine, though nothing has been announced yet. Meanwhile, Star and Sony Pictures Television have been in the India market for years: Star remains in constant battling distance with new entrant Colors, while Sony is attempting a comeback with new programming.

Also remaining steadfast is Subhash Chandra’s Zee TV: For week 43, it displaced Star Plus from the number-two position with gross rating points (GRP) of 271 (compared to Star Plus’s 229). Week 44 saw it slip back again, falling behind Star Plus, but only by a slim margin of nine points. One of Zee TV’s strategies to revive its fortunes is launching new programs. More importantly, it has widened the ambit of its prime band, offering an array of shows from 7 p.m. to 11 p.m. (instead of 8 p.m. to 11 p.m.). In the first quarter of the new financial year (April to March 2009-10), Zee TV’s GRP stood at 234, just marginally behind Colors’ 258 and Star Plus’s 255; in the same April-June period, it has emerged as the joint leader along with Colors in prime-time programming.

Foreign Players

Slowly, American studios and networks are grabbing larger swathes of Indian media and entertainment space. While it is still difficult to get a large toehold in the news business — both print and television — due to foreign direct investment (FDI) restrictions and caps, it has been relatively smooth sailing for Western players to establish a solid presence in the entertainment space. It has taken the Murdoch-owned Star Group many years to find traction in India — partly the result of the Indian market dynamics and the fact that it had some misses along the way. Now, Murdoch-Star affiliate Fox-Star Studios is betting big on the Indian market as well. It has established what it believes is a one-stop shop for Bollywood producers and wants to put the building blocks in place to develop a viable and sustainable business, which might not necessarily be about scale and size.

“At the end of the day, India — like China — represents a business opportunity which needs to be captured on the ground,” says Vijay Singh, CEO of Fox-Star. “We are trying to unlock these opportunities in India. News Corp. has been here forever, so it was natural for us to get here as well, being a part of the Group. While we distribute all the Hollywood films from Fox and marketed Slumdog Millionaire in India as a Bollywood film and succeeded with that, we also recently released our first production, Quick Gun Murugun.” Fox-Star’s next big bet is the Karan Johar-directed film My Name is Khan, which stars Shahrukh Khan and Kajol. It will be released in the U.S. by Searchlight and will have a mix of Hindi and English. Singh says he is working on four different projects as well — “a mix of small- to medium-sized films.”

Walt Disney has had a checkered history in India. Its first attempts to enter the market were a failure, resulting in a legal battle with Lalit Modi’s Modi Enterprises. Eventually, it launched the Disney Channel and Toon Disney. Recently, it took a big leap of faith in the Indian market by buying Hungama TV from Ronnie Screwvala for US$30.5 million and then acquiring 59% in UTV Software Communications with an investment of US$170 million, allowing it access to one of the big production studios in Hindi cinema with hit films like Jodhaa Akbar and Race, and acclaimed, smaller budget films like A Wednesday.

One missing player is Bertlesmann AG, the third-largest entertainment conglomerate after Time Warner and Walt Disney. But all other key media companies — from News Corp. to Time Warner, Walt Disney, Viacom, Sony Pictures Television, Liberty Media and Bloomberg, which recently entered into a content partnership with UTV — have presence in the Indian market. Amit Khanna, chairman of the vertically integrated Reliance Big Entertainment, which recently formalized a 50:50 joint venture with Steven Spielberg’s Dreamworks, notes that while many of these players have been in India for some time, “they are reinforcing their presence…. I think the realization that India is a growing market where everything has a low [cost] base has finally dawned on American studios and broadcasters. Entertainment spend is very low while penetration of DTH [direct-to-home satellite service], cable and other forms of access have a huge upside. This is the potential that is reinforcing the India story.”

India vs. China

One driver of foreign interest is that India’s media and entertainment industry is expected to grow to US$21 billion by 2014. Manjit Singh, CEO of Multi Screen Media (MSM), a joint venture between Sony Pictures Television and a group of Indian investors, notes that India “is an attractive market and one needs to have a sizeable presence in it — more so because it is still under-explored. Star and Sony were … the first to set up base here realizing that it was a market which had enormous upside.”

Others note that while media companies recognized similar potential in China’s entertainment sector, they have retreated from that market and have begun to focus instead on India. A recent report on the Indian broadcast industry in The New York Times notes that “after many years of fervent lobbying and deal-making in China, American media companies have little to show for their efforts there and are increasingly shifting their attention instead to India. Media executives still believe that Chinese audiences are receptive to Western culture — SpongeBob SquarePants is a big hit in China — but many companies have been pulling back out of frustration over censorship, piracy, strict restrictions on foreign investment and the glacial pace of its bureaucracy.”

According to Mohammad Mian, dean of the faculty of education studies at Jamia Millia Islamia University in New Delhi, there are other factors at play as well. “It is partially due to the disillusionment with China, but also due to the growing importance of India in the global scenario. Remember that we are an English-speaking nation. In my experience as an educator, the demand for English language [use] is only going up in India. We have a natural advantage in this regard. In fact, English should be made compulsory in India. When China realized that communicating in English was the biggest barrier to conducting trade and commerce, they, too, started making attempts to come up to speed, but we have a 250-year legacy advantage over them. That is why American broadcasters and studios find it easier to do business here.”

In March, the Motion Picture Association of America opened an office in India for the first time, in Mumbai. A little over four years ago, Dan Glickman became the head of the association, and he has visited China several times. “The feeling was that there were greater opportunities then [in China] than there are now,” he says. According to MSM’s Singh, India is an extremely fertile market and its viewers are getting more discerning, showing deeper and wider segmentation. His channel is now focusing on small towns and segments of the strata in the metros as a way to capture greater market share.

Some companies are succeeding, while others are moths to the flame. Kamat notes that Viacom18 believed in Colors and resisted the temptation to short sell for a volume commitment in the initial months. Initially, the company did short-term deals until the brand achieved its potential. This helped it to get advertising rates commensurate to the GEC’s performance. Now, less than a year and half after launch, Colors is doing a run rate of US$10 million per month, making it the fastest-growing channel. While Kamat may have succeeded on the back of big ticket reality shows — Khatron Ke Khiladi (Fear Factor), India’s Got Talent (India’s version of Britain’s Got Talent) and Bigg Boss (Big Brother) — he is quick to clarify that India remains a soap opera-driven market. “Reality TV serves a dual objective of ratings and buzz for the channel. However, India is still a soap-driven market and will continue to be. The contribution of Reality to the programming basket is now up to about 20%, from 8% to 10% earlier. Soaps continue to be a staple diet and the Reality shows are the spicier offerings.”