POV: Is there more scope for L&M in the Indian TV space?

Barring a few kids' channels, broadcasters in India have not really explored the licensing and merchandising (L&M) avenue. Can it emerge as a substantial source of revenue for them?

What could be the impediments that broadcasters face? Can it emerge as a substantial source of revenue for them?

Sandeep Dahiya, senior VP, Communications and Consumer Products, Viacom18

Five years ago, the organised pie of the retail market was not more than 4-5 per cent. Today, it stands at 7-8 per cent. In developed countries, this percentage is 95. Around 300 malls are expected to come up in the next 18 months. One reason for L&M to have not taken off is the lack of understanding of the business and focus. Good range planning, focus on quality and affordable price positioning are parameters to be considered if licensing is to work.

Viacom, globally, is a serious player. Characters like Dora and SpongeBob in certain markets make more money from licensing than from ad sales. Today, a kid can watch his favourite character for half an hour, sleep, play and interact with the character 24 hours. So, there's a great opportunity here.

Jehil Thakkar, executive director and head, Media & Entertainment, KPMG India

Piracy is a looming issue and is one of the major issues holding back this opportunity. While there is opportunity, especially for shows that have a strong enduring brand value in their own right such as KBC, Indian Idol or Bigg Boss, that opportunity is limited until piracy is controlled and we have an organised retail boom in this country, in the form of large, legitimate stores that will not stock pirated merchandise.

Another issue is brand and characters. While we have show brands, we have very few 'character' brands. In the West, there are strong character brands. Some examples are Hawkeye from M*A*S*H, Hannah Montana, Mr T from A team or even Kramer from Seinfeld. Much of our television shows are still Bollywood-driven. A third inhibitor is that, outside of the kids' space, we don't really buy (or I am guessing?) or desire licensed products, since it's still seen as a kid-centric domain.

Dulce Lim Chen, V-P, Asia Pacific, Cartoon Network Enterprises

Currently, India is at the halfway mark, where TV penetration has really helped build strong brands and characters. But organised retail is still evolving. When Turner entered the licensing space in India, knowledge of IP rights and the concept of licensing fee to use a character to grow your business was alien. L&M is an exciting business vertical that is the key in building a longer life for characters or brands, by giving them a new lease of life on the shelf. It already is a substantial source of revenue for us. Turner's L&M division showed a 90 per cent growth in 2010 over 2009 and is aiming at a 50 per cent growth rate next year. Currently, CN and Pogo products are available in 4,500 retail counters.

Ajit Thakur, EVP and business head, Sony Entertainment Television

L&M is a huge area but nobody really looked at licensing, apart from the kids' channels. And look how well they are doing. It's just a matter of time that more broadcasters join the bandwagon. While it is difficult for daily soaps to get in, there is an opportunity. For CID, we are planning to do quite a lot. But we are going slow, because we know it is difficult to get into an area which is not our core competence.

It took us six months to make a proper plan to extend CID into comics. It's important to get likeminded partners who understand distribution and can fill up the gaps. For Indian Idol, we launched a range of T-shirts with Reebok. While I don't think L&M can contribute substantially to a channel's revenues in the short term, I do see that happening some years down the line. We are looking at extending three of our properties -- CID, Indian Idol and KBC -- to the L&M space.

(Points of View (POV) is a regular column which carries opinions of industry professionals on a current topic of discussion in the advertising, media and marketing industry.)