The television market in India has seen a phenomenal growth in the past decade, far outstripping the growth of other consumer durables - the figure is a staggering 30 percent.  Though the industry may not be able to sustain this growth level for long, it is still expected to do well. In this scene of cheer and prosperity alone stands the poor cousin, the black & white TV (B&W).

In number terms, B&Ws still dominate the market. This, however, is little comfort to the B&W manufacturers since the ratio may soon change with colour TVs (CTVs) eating into their market share at a tremendous rate. While the growth of CTVs is on an upward trajectory, that of B&Ws is headed southwards. The B&W market has shrunk to 5 million sets in the current year from around 6 million in 1997.

The players in the B&W market include consumer electronics giants such as Videocon and Philips but a major share is held by the unorganised sector. Domestic companies like Videocon, Salora, Crown and Onida are reducing their presence in the dwindling market, as are the MNCs save for Philips, which is still pretty active in the market. While the big players have a wide range of products and therefore can easily shift focus if one particular product category is losing market share, the medium and small-sized players do not enjoy that kind of immunity.

The biggest market for B&Ws still lies in the rural belt. The penetration of B&Ws in rural areas is higher, at 20 percent, compared to that of CTVs which is 5 percent. Among B&Ws, 14-inch TVs dominate the market because 20 inch B&Ws face stiff competition from second-hand CTVs. The price of a branded 20 inch B&W is  Rs. 3,500 to Rs. 4,000, while the 14 inch version may cost between Rs. 2,000 and Rs. 2,500. The attraction lies in the volumes and the higher margins it offers to the manufacturers.

The burgeoning grey market for B&Ws is basically because of the price differentials it has with the branded sets. The grey market products are cheaper by a hefty 35 percent. The price differential is mainly due to the increased sales tax and excise duty on components. The growth of the grey market has resulted in nearly 200 B&W TV and component manufactures to close shop or sink into the red. Some of the companies which have exited are Bharat Electronics, Sea Wind, Rama Vision and Prakash Industries.  Major players like Videocon have also started scaling down production because of these disturbing trends.

The increased penetration levels of CTVs is due to a multitude of reasons such as:

Increased MNC presence: Thanks to the Government’s economic liberalisation policy, many multinational companies have set up shop in India. This has resulted in better and newer technologies being made available to the Indian market with a minimal time lag. Customers now have an array of options to choose from like never before and this has had an impact in overdriving the CTV market. Television sets nowadays have become bigger and flatter for better viewing and come with a whole host of features that might make John Baird pat his own back all over again. These sets are now widely available in India and the multinationals are falling over each other in wooing the customer with the latest models.

Willing buyers: The Indian middle class has been an enigma to most marketers who have tried to assess its buying patterns. Although this market has not proved to be the made-to-order goldmine that the global players originally viewed it as, it is fast shedding the conservative tag. Increased disposable income levels, as well as the shaking out of the taboo associated with consumer loans has resulted in middle class families paying more and opting for CTVs.

Striking the right price chords: The Indian market forever has been price conscious and is unlikely to change in future. One of the major reasons for the market to take up the CTVs like no other durable is the pricing strategy adopted by most of the majors. All this started when Baron International offered Akai TVs below the psychological barrier of Rs.10,000. This scheme also came in with an exchange offer to lure the customers. The tremendous response to this scheme changed the market dynamics and forced all other manufacturers to follow suit. The manufacturers are also targeting the rural markets with second hand colour televisions priced just above the B&W sets.

Open skies: The cable boom is really happening and this does not augur all that well for the B&W market. Unlike the past when viewers had to choose between the first and second channels of Doordarshan, a slew of channels offer a variety of fare ranging from news to music and talk shows. B&W TVs have some disadvantages in tuning into cable channels. Also, programmes such are news are technically excellent, and B&W TVs do hardly any justice to them.

Blurred governmental policy: The Consumer Electronics and Television Manufacturers of India (CETMA) blames the prevailing tax structure for the sorry state of the industry. A 16 percent excise duty is levied on B&Ws, including that for components, sales tax and octroi. The adoption of uniform sales tax by the states in January has also affected the industry. The combined effects of these have resulted in B&Ws becoming dearer by Rs. 400-500. The industry could hardly absorb the hike, rendering it even more unviable.

Future: shades of black and white: The focused advertising and marketing strategies of CTV manufacturers and their thrust on rural markets will make it all the more difficult for the B&W industry. The prices of colour televisions are also expected to decline and this will induce more owners of B&W TVs to trade them for colour televisions.

A ray of hope here for the B&W makers lies in the shrinking but yet vast population which still does not own a TV. Another focus market could be in the villages. Companies such as Onida and Videocon are employing innovative marketing and sales techniques to woo the rural markets. Smaller companies too can take up region-specific campaigns to address this market.

As the number of channels increases, so does the strife amongst family members on which programme to watch. TV manufacturers can convince them to go in for a second TV set. Two colour TVs may seem too much of a luxury to bank balance-conscious middle-class families, but a new B&W TV may do just fine. This could be another market for the B&W makers to address.

B&W manufacturers should look at increasing production and cost efficiencies to sustain in the market. A very low-priced B&W TV is sure to find a substantial market among the poorer classes. With increased impetus on cost cutting, faster rotating models and a little help from the Government on the duties front, the B&W industry can protect itself from blackening out.