MUMBAI: TV producers are about to be hit with another whammy. Bad sentiment for media on the stock market aside, the implementation of conditional access systems (CAS) has made them smell even worse.

At least as far as venture capitalists are concerned. Hear out Passionfund.com;s Mahesh Murthy, who used to earlier be a part of the broadcasting industry: "Those who produce serials for C&S channels definitely don't seem to be an attractive proposition as the channels have been talking of reducing their remuneration post-CAS."

This opinion is seconded by R Jain of HSBC Securities who says that the number of C&S channel producers who are seeking funds from established VCS is on the decline. He reveals that they are fishing elsewhere for money and getting a good catch.

Explains Jain: "Most of them prefer to take money from the open market. These producers borrow money for periods ranging between three and nine months. There is a lot of liquidity in the market; capital markets and interest rates offered by banks are unattractive. There are several lenders who provide finance - and settle for their tryst with the world of glamour."

When reminded that the terrestrial and FTA channels will benefit post CAS, Murthy says: "The main problem here is transparency and lack of statistical data and projections. There are no mutually acceptable models that can quantify the revenues obtained by the producers. As it is, advertising market is showing fluctuations and ad agencies are still not clear about the post-CAS scenario."

Jain adds that several listed companies that produce content for TV haven't managed to show the kind of growth that was expected. "Their performance has been lacklustre. The share prices aren't on the ascendant." Kotak Mahindra Securities media analyst S Prasad had informed indiantelevision.com that he had stopped tracking several top listed media stocks.

Murthy also adds that the same pessimistic sentiments hold good for the film industry. "A film such as Saathiya was declared to be a semi-hit. When we asked for valuations, we were informed that it had earned around $1 million on an investment of $8 million. People from the entertainment industry need to develop better systems to pick up money from VCS"

Jain adds that the main problem relates to the fact that the Indian viewers and audiences are so unpredictable that TV producers are having a tough time. "Post KBC, everyone is just conducting trial and error methods while trying to arrive at the right formula. The recent decline in the ratings of Kyunki and Kahaani hasn't brought any cheer at all because those replacing them in the top positions don't seem to be the 'next big idea'," Jain adds.

Going by what the bigwigs say, TV producers will likely have to continue picking up the moolah from the grey market till they adopt scientific valuation practices or till they pick up a surefire winner.