Category: Executive Dossier

We’re excited to make people’s lives more Jing-a-la-la with HBO: Vikram Mehra

Under her watch, the English movies channel has only grown from strength to strength. Before taking charge as MD, HBO India, Monica Tata worked with Turner International India, quitting as General Manager, Entertainment Networks, South Asia, in 2012. Tata has nearly two and a half decades’ experience in the media and entertainment industry, and spent most of her formative years at Star India before moving on to Turner.

Indiantelevision.com was more than happy to have Tata over as Guest Editor for a day and play fly-on-the-wall even as she grilled Tata Sky chief commercial officer Vikram Mehra about the association with HBO and more…Excerpts of the conversation between the two:

Monica: What is the business model for providing the ‘HBO On Demand’ service?

Vikram: The way we are looking at it right now, which is also in sync with our philosophy at Tata Sky is that apart from offering television channels which customers are used to, providing those channels with great picture quality and better customer service is our lookout.

We are also very keen to try out unconventional products and services, which customers haven’t tried out till now and give them a flavour of that. Whether it’s trying out varied services like Karaoke which nobody ever thought could be offered on a television-based platform, which is a global first for us. On our partnership with HBO, where customers are showing interest in watching premium content like HBO Defined and HBO Hits. Not only are they getting to watch 100 per cent ad-free content, but also older seasons that they would not have been exposed to otherwise.

So, somebody who has never been exposed to say, a Game of Thrones, and is keen to watch season four, what with so much publicity around it, need not bother with downloading bad quality content from Torrentz or buying it from the pirated market. Our partnership with HBO is such that any customer subscribing to its premium offering would also get a free entitlement to watch back seasons of all leading shows on VOD.

Monica: So will this be available to everybody or only to HBO premium subscribers?

Vikram: This will be available only to HBO premium customers. This content is offered only as a free value-add to people who have decided to go out and subscribe to the HBO premium service. Conventionally, what used to happen; people would pay for a channel and just get that. But with HBO, for the first time in India, when you pay for the channel, you will not only get the channel but also the free VOD entitlements along with it.

Monica: Please share your views on the genesis of this unique partnership. For the first time, ‘HBO On Demand’ has been brought into the country. Where did it begin and how was the experience?

Vikram: Not only the ‘HBO On Demand’ part but also HBO channels are a complete breakthrough in this country. Nobody else has been able to come out with their high-profile channel which shows you great movies in great picture quality and ad-free. Nobody has that kind of service in the country today.

For us, it is a very big experiment that we genuinely believe in. We have been getting fabulous response from customers about these two channels. And our constant endeavour is to keep thinking what more can we bring to customers.

We have a very well established VOD service today with over 3,000 video titles that we typically sell on a transaction basis or a subscription basis. But you cannot get this content unless you go out and subscribe to the television channels of HBO premium.

We are already getting a large number of calls at our call centres and people want to know more about it. If you check twitter, there are people tweeting about how Tata Sky has brought in a great initiative and we are extremely excited about it.

Monica: What has the response been like and how excited is Tata Sky about the season 4 premiere of the HBO Original Series, Game of Thrones, on HBO Defined?

Vikram: I am a huge fan of Game of Thrones and we are pretty excited about it. It will be an absolutely new audience that we can open up in this country for a Game of Thrones kind of high quality production. I am yet to see anything of this kind of production quality to be put on television. It’s mind-blowing and a new generation, a new kind of crowd is going to open up to this show.

Hence, we are very clear that when we promote season four, it will not be limited to just larger towns but also mid-size and small-size ones. And our communication will say, “Don’t worry if you have missed the first three seasons, why don’t you download from VOD and check it out!”

Monica: Do you think that the dual language proposition is an interesting one and is working well?

Vikram: It is working quite well. Our endeavour is not only limited to people in Mumbai or Delhi. It’s a huge mental block for people in smaller towns who think they won’t be able to catch the accent. The moment they understand that there is a provision to shift to Hindi, it’s a huge comfort to them.

So, ever since we have started promoting the dual-programming concept with HBO, we have seen absolutely fresh households opening up to the entire concept. We have seen a substantial increase in the subscription of the service.

Monica: What do you expect further from this Tata Sky-HBO partnership?

Vikram: Our endeavour is to keep on doing newer things. As a company, we take pride in the fact that we are not just a digital TV service provider. I think there has to be newer things brought to this market, which India has never seen and some of the things globally have never been out here. We believe that in HBO, we have a partner with whom we can go and try these things out. So, we are very excited about making the life of Tata Sky people more ‘Jinga Lala’ with HBO.

March 25, 2014
Leo Burnett’s Arvind Sharma grills Group M south Asia CEO CVL Srinivas

It was in early 2012 that CVL Srinivas (fondly called Srini) succeeded Vikram Sakhuja as GroupM South Asia CEO. At the time, GroupM AP CEO Mark Patterson and Srini’s boss had said that he was their first choice for the role, and that he had the skills, personality, relationships and attitude to build the business on strategy, and with his own style and ideas as well.

For Srini, it was an opportunity to go back to an organization where he had learnt the ropes and mastered the rules of the game. Since Srinivas took charge, a lot of changes were made in the agency to up the ante in the competitive market scenario. Indiantelevision.com’s Guest Editor of the day, outgoing chairman of Leo Burnett, Arvind Sharma spoke to his old friend, Srini, to see how the agency has done so far…

Srini, it has been just over a year since you took over as CEO of Group M in the country. What was the strategy and what were the priorities you set as the new CEO?

Clearly, our agency brands are the real heroes in the market. GroupM is only the support structure that leverages the overall scale of the business. The first priority was to help our agency brands to leverage the knowledge and expertise of GroupM, support them with best practices, and help push their business further.

The next priority was and still continues to be our focus on the New Core, that is, Digital, Content, Trading, Analytics and Experiential Marketing, with a greater focus on Digital. Digital is no longer a ‘nice to have’ but is an integral part of a brand’s communication strategy, content and plans. We started our digital practice 12 years ago, and have the early mover advantage. However, in 2013, we really scaled it up to a much higher level with the ‘New Me’ initiative, beginning with a change in mindsets. We laid out a three-year plan, and we have made incredible progress in year one. It is a continuous effort that integrates traditional core media practices with the new core like digital and social media, content, search, analytics, etc.

Our third focus area has been our younger employees, who really are the future of the industry. We introduced the YCO (Youth Committee) last year that works very closely with the EXCO (senior leadership) at GroupM. This project was in fact piloted in India. The YCO has made a significant contribution in the very first year. These bright young minds from our agencies and specialist practices are now part of the decision-making process. They are really our feet on the street, bringing in a slew of fresh ideas and insights.

Did execution of this strategy involve structural changes at the agency? What were they?

Keeping in mind our ‘New Me’ vision in 2013, there was greater organizational focus on the New Core- Digital, Content, Trading, Analytics and Experiential Marketing. We began embedding New Core talent within our agency brands and will continue the effort in 2014 as well.

We also looked at a more simplified structure to ensure focus on new core areas. For example, as our business evolved, we realized that certain units need to be restructured to create a lean and agile team. We merged two of our units, Dialogue Factory and Dialect, to build a single activations powerhouse – Dialogue Factory. Today, Dialogue Factory has the expertise to plan and execute any and every aspect of experiential marketing, ranging from high-end luxury events to focussed rural outreach programs.

Would you share the progress Group M has made in terms of the strategic priorities set by you?

Our agencies and specialist units have had a significant year. We won over 80 new businesses in 2013 and managed to retain some key clients. We dominated the domestic and international industry awards last year, with our agencies and specialist units winning an award every other day. All our agencies rank high as per the recent 2013 RECMA ratings. To cap this performance, last year, we were awarded the Porter Prize, making us the ‘only’ media and advertising agency to win the Award.

Keeping in mind our focus on digital and the new core via ‘New Me’, our digital contribution grew by 50 per cent last year.

We have rolled out several unique initiatives in the talent space. Over the years, GroupM Aspire has established itself as a best-in-class training and development programme. We have introduced several interesting programmes in Aspire and have linked it to our new vision. Basis the inputs we got from our Y-Co, we brought in several new welfare measures. We were recently crowned the “Dream Company to Work for” in the Media & Entertainment sector at the World HRD Congress.

One and a half years later, do you see the need for any tweaks in your strategy?

In today’s market, GroupM’s agility, coupled with our deep understanding of the market is what is keeping us ahead. Having said that, evolution is the only constant, and as the media landscape changes, bringing us new opportunities and challenges, we will need to evolve ourselves and some of our practices.

2013 was generally a tough year for the industry. How do you see 2014 panning out?

While 2013 was a challenging year, it did bring in a lot of opportunities. The slowdown of the economy and uncertainties surrounding policy put a lot of pressure on our clients and their media budgets, and we did take a lot of course corrective action in the middle of 2013. The year also gave us the opportunity to see some great innovation across planning and buying, developing new proprietary tools, diversifying our talent and building some interesting partnerships.

We are cautiously optimistic about the media industry in 2014. The GroupM TYNY 2014 forecasts the AdEx to grow at 11.6 per cent with the highest growth percentage for Digital at 35 per cent followed by Television at 12 per cent. Sectors like FMCG, Auto and Retail will continue to be stable. We will see an increase in rural spending by several sectors like FMCG and Telecom, and with that, we also plan to expand GroupM’s offerings geographically. The first half of the year will continue to be uncertain, given the general economic and political environment, however, we foresee a stronger second half with an upsurge in ad spends across categories.

We will continue to focus on our New Core offerings including Digital, Content, Trading, Analytics and Experiential Marketing. Our agencies have already done some ground-breaking work in the first quarter with branded content and digital media.

March 20, 2014
It’s a terrible problem to have – being number 1 and 2 in your space: Mark Eyers

Children’s content is certainly no child’s play and who would know this better than Turner International Asia Pacific chief content officer, Mark Eyers.

Eyers is in charge of acquisitions, original production and programming for Boomerang, adult swim, Cartoon Network, Cartoonito, Toonami and Pogo across Asia Pacific. Between spearheading new channel developments in the region and being responsible for strengthening the planning process for Turner’s kids’ brands as well as identifying opportunities for further development and distribution of hit properties across multiple platforms, Eyers’ plate is overflowing.

He joined Turner’s creative services team in 2004 and was previously the vice president of content. Prior to joining Turner, he worked with Walt Disney Television International in Singapore as senior manager – head of creative department for Asia Pacific Disney Channels. He also did a stint in direction and production with BTQ Channel 7 in Australia.

In an exclusive interview with Sidharth Iyer of indiantelevision.com, Eyers holds forth on Cartoon Network completing 20 years in Asia Pacific, Pogo completing a decade in India, future plans of the network and more…

Q. Turner has been present in India for nearly two decades now. How has the journey been?

It’s great that we can celebrate Turner’s twentieth year in India next year, which is very close to the APAC anniversary we celebrated this year. We are very pleased that on an APAC level first, we can celebrate being the number one brand in the kids’ entertainment space.

Personally, I always like to look at our success from Mumbai to Manila and from Seoul to Sydney. In that context, it’s been an awesome journey. We are proud to proclaim that we are the number 1 and 2 kids’ channel (with Cartoon Network and Pogo). Come to think of it, we can’t really think of another media brand that can say they are number 1 and 2 in the space that they function in. Turner’s entrepreneurial spirit and drive to become the first mover in the genre by taking advantage of a gap in the market has always benefitted us. Being one of the first kids’ brands in India, we have enjoyed the first mover advantage.

Q. Cartoon Network underwent a refresh first in 2005 and later in 2011. Can we have your thoughts on this please?

The transformation is like with any other business model that works on a long-term perspective. All businesses must look at themselves every couple of years with respect to the current market environment.

One of the core attributes of Cartoon Network is not only to have surprising comedies but also unique comedies. What we mean by that is we must always have something fresh or new that hasn’t been seen before. If your DNA is about surprising people, you have to take some risk in what you serve but again, that doesn’t mean you don’t showcase some of your classics like Dexter’s Laboratory and Power Puff Girls.

Probably, a great example is Tom and Jerry which a lot of us grew up with and there will be brand new episodes coming to Cartoon Network India very shortly. So, you will get to see the evolution of brands.

Q. Earlier, the channel only had Hannah-Barbara shows. In 1996, after Turner came under Time Warner, Warner Brothers’ shows premiered on the channel. Not before 1999 did CN begin airing its own original series after which, there was no looking back. Are there any more region-specific shows underway?

I think it’s a combination of all those things and we try and look at franchise management; not just current franchises like Roll No. 21, a local franchise into season 7, but also old ones like Ben 10 that will be celebrating its 10^th anniversary in 2015. In case of long-running franchises, we keep up their successful run by injecting fresh stories like for Tom and Jerry. We also bring in new shows and series like Be Cool, Scooby Doo and so on. If we look at franchises as pillars, we still need to keep reinventing and refreshing our content to remain relevant and unique.

Q. In 2001, the channel introduced programming blocks like Toonami, Acme Hour, Prime Time, Boomerang and Cartoon Network After Dark, a couple of which are now channels in their own right. Why don’t we see such out-of-the-box programming blocks anymore?

They are fantastic franchises within themselves and we have now launched the Toonami channel across APAC and it is available in India and as a block in the US. Now, Boomerang is our next programming initiative to transform into a global brand.

As I see it, brands will become more important than ever before for media companies. It’s important that we take brands like Toonami, Pogo, Boomerang and Cartoon Network and develop unique and original content for each of them.

In future, distribution will become a commodity. So, when distribution costs between the original content owner and consumer become kind of omnipotent and content is available at low costs, consumers won’t know where to go if no one owns the original content. Hence, the idea is to have content that belongs only on Cartoon Network or Pogo where viewers know certain shows can only be found on this channel. The focus is thus on improving brand loyalty as well.

Q. CN’s sister channel, Pogo, started out in 2004 and has come a long way ever since. Please share your views on Pogo’s rise and it becoming the number one channel in the kids’ space in India.

It’s a terrible problem to have, being number 1 and 2 in your space and have two such top brands which complement each other. While Cartoon Network has a very global outlook and much of the content is shared with other countries around the world, there is a very definite commitment to local content production in the range of 10 to 20 per cent with Roll No. 21, a fantastic success story. This complements Pogo, which has more of general entertainment for kids, as in case of CN, there is a bit of a skew towards kids while Pogo is for both kids and the family.

Thus, you will see a fantastic line-up of shows on Pogo, but at the same time, there’s a strong commitment to provide original productions under the Lights, Camera and Pogo banner, where we showcase movie franchises.

So these two things complement each other well, and it’s a terrible problem to be the number one and two in your space, but it’s a problem we would like to continue having.

Q. As we are in the age of new media and lots of kids are looking for things on the Internet, what is Turner’s strategy in terms of leveraging this medium and generating a buzz?

The great thing about digital content is that it actually complements primary viewership on the linear channel and also in a market like India, where we witness the single channel phenomenon to a greater extent than in other markets we are always looking to provide another digital experience and complement ourselves.

In the APAC region, we have already launched what we call ‘Watch and Play’. With this feature, one can watch clips from a show and an authenticated customer in the market can not only watch the channel live in partnership with his/her affiliate but also play games at the same time.

Cartoon Network has always adopted this strategy, to have unique content for the digital medium which complements television content, whether its shorts or games or extensions of the storytelling from the primary channel. The viewer needs to have a compelling experience in the digital space that should leave him/her wanting to come back for more.

Q. Merchandising is a big market for animated characters and Turner certainly has loads of them. What kind of revenue is generated through merchandise for Turner Broadcast? Do you have any big plans around merchandising in APAC in the coming days?

The important thing is to always be character-driven in the first place, and at Cartoon Network, we believe that we are a character-driven comedy brand, so a character is always going to be there in the first place. Besides, our characters are strong, resonate with the audience, and share connect with the brand identity of the channel. This allows us to optimally license and merchandise our content.

Over the years, we have had tremendous success with characters like the Power Puff Girls and there is still L&M for characters prevalent in various territories. Ben 10 too has been a massive franchise for us and has done well in terms of L&M deals.

With the next crop of franchises including Roll No. 21, Adventure Time, Mixels (already in partnership with Lego, along with being a multi-platform property) and the hugely popular Chhota Bheem doing really well for themselves, the sky is the limit for L&M deals for our properties.

Q. What are the new distribution methods that can be used across TV, web and mobile and what are your views on the changing trends in terms of distribution? Will OTT platforms see a rise in the Asia Pacific region; what are your thoughts on the progress made by India in digitisation?

I think India shares a similar situation with the rest of Asia as far as the rise of over-the-top (OTT) services is concerned and will take a little time to grow. We may actually see affiliates partner with the brands that are already present to promote the ‘TV everywhere’ offering.

If I could just use the ‘Mixels’ example; it is the most recent initiative that proves how we are trying something different in L&M, as we are partnering early on with Lego. But the show from day one has been a multi-platform offering; we haven’t commissioned 52 half-hours of the show, but 22 shorts that will premiere on Cartoon Network and then online and we have just launched an application, so we are already in that space trying different techniques.

Q. Finally, how does Turner plan to strengthen its hold on the kids’ market in Asia Pacific and more importantly, in India? Is introducing more channels from the Turner network on the cards?

It’s a wonderful position we are in currently and we love both our children (Cartoon Network and Pogo) equally, but the key is to remain true to yourself and to the DNA of the channel. For us, it’s about doubling on our animation comedy, that’s what resonates in the market.

In a global village like the world is today, people will still pay for the experience. One of the most powerful experiences that anyone could have is the gift of laughter or humour. And so for us it’s more about being true to comedy and bring in that surprise that will continue to remain our secret and doubling up on unique, character-driven comedy.

March 12, 2014
As a strategy we have never completely rested our fortunes on only India cricket: Rajesh Sethi

He worked with the likes of Tata Motors, GE Infrastructure, GE Money and Allianz Global before taking on the mantle of Ten Sports CEO in July last year.

A graduate in mechanical engineering and a post-graduate in marketing, Rajesh Sethi spent many of his academic years in hallowed institutions such as the Harvard Business School, Kellogg School of Management and INSEAD.

Sethi has an impeccable track record of value creation and growth across sectors and is known for his entrepreneurial streak coupled with a keen sense of global business. Little surprise he has been conferred the ‘Rashtriya Udyog Ratna’ by NEHRDO and the ‘Global Indian Achievers Award for Business Excellence 2012’ by the Economic Development Forum, among others.

In an exclusive interview with Sidharth Iyer of indiantelevision.com, Sethi opens up about Ten Sports’ journey since its launch, the diverse sports’ offering of the channel, its digital presence and more…

Q. How has the channel progressed in the past 12 years since its launch in April 2002? What is the idea behind launching Ten Cricket, Ten Action, Ten Golf and Ten HD? Are you happy with the way these channels have shaped up?

The journey of Ten Sports started in April 2002, at which point, our offering mainly revolved round the India vs Pakistan cricket series. Ten Sports had the opportunity to host some of the greatest matches in the India Vs Pakistan cricket rivalry, including the Sharjah series, and this was our brand identity back then.

But over a period of time, the sports industry witnessed a gradual shift in audience preferences. In my opinion, the shift began post-2010 or so, when Generation Y started showing interest in sports beyond cricket like hockey, tennis, badminton and football. This era also saw the emergence of a niche audience for sports like golf. Looking back, it was imperative for us to break the clutter in the space and really honour viewer preferences. And so, we launched Ten Cricket and Ten Action in 2010 with the former targeted toward cricket and the latter toward football. In 2012, we launched Ten Golf, a dedicated golf channel. In 2011, we introduced Ten HD to improve the viewership experience by offering content in high definition.

Unlike our competitors, our focus is not just cricket but a wide array of sports – what I call a segmented, nuanced approach through multiple channels. While we’ve seen Ten Action’s viewership increase manifold, Ten Golf is still in its nascent stage but we’re confident it will do well as it’s a long-term investment. With Ten HD too gaining rapid traction among our viewers, we are extremely happy with the progress made so far.

Q. With five channels in your stable, how do you ensure each gets its due in terms of viewership, distribution, advertising and brand identity?

As mentioned earlier, we follow a segmented, nuanced approach with different channels covering different sporting events. We have a team focused on each of these channels with a strategy to nominate an internal ambassador to each one of them. So, say within the Ten Sports team, we have avid sports fans as ambassadors, who take up the responsibility for any one sport for which they are the critic-cum-advisor-cum person who remains glued to the channel for constant feedback and suggestions as to improving the viewing experience. The whole intent is to focus on viewers, which in turn ensures that our content and scheduling is absolutely aligned to what our viewers want.

Coming to distribution, we have ensured that our channels are widely and adequately available and viewers are able to watch their favourite sports on our network. Thus, we are available across multisystem operators, direct-to-home platforms and as video-on-demand. As a network, we are available in nearly 140 million households, with Ten Golf accounting for nearly 1.2 million homes. Our distribution team ensures that each sport is given due importance and reach so as to sustain and increase viewership.

Our segmented approach also gives advertisers better visibility in terms of a dedicated audience, allowing them to reach a specific audience in a more refined manner. Among the advertisers onboard, few are focused on sports as a genre while others look at investing only in cricket or football or golf. So, it’s a fair mix of both kinds of advertisers.

Q. Phase 3 and 4 of digitisation are drawing near. How do you intend on monetising sports other than cricket, especially since you have so many sports on offer?

We are bullish about promoting sports, especially under the Commonwealth Games and the Asian Games, since these are in the national interest and have a wide viewer base.

Digitisation will largely benefit sports viewership. It will give viewers an opportunity to see what they want to see and broadcasters a chance to provide multiple ways and means of consuming content. So, there will no longer be the problem of limited bandwidth where broadcasters are confined to providing one solution on the national platform. Ten Sports will be able to offer varied content on varied platforms through digitisation, especially with our differentiated sports offerings and multiple channels. Indeed, this is how TV viewership has evolved in developed markets. Sports’ broadcasting is slowly moving from a B2B to a B2C model, and B2C really helps us connect with the audience in a more refined manner and by offering more quality content.

Even in case of our online platform, tensports.com, we have seen unprecedented growth with the recently concluded South Africa Vs India series as well as the South Africa vs Australia series. Availability of online content is very much part of our long-term content strategy. We want to further enhance the quality of our online content as it’s a win-win situation for both broadcasters and viewers. We want to harness and at the same time harvest this opportunity as we go along.

Q. In terms of generation of ad revenue, are the trends changing for sports broadcasters? How is your channel positioned as compared to the competition? What is your share of the pie and are you planning on hiking ad rates?

I do not feel revenue share is the right parameter as it varies from event to event and depends on the number of marquee properties the sports broadcaster has. I can emphatically say that Ten Sports is the leading sports broadcaster in terms of revenue when it comes to non-cricketing properties, and no other sports broadcaster comes close to us as a network in terms of non-cricketing properties.

We offer propositions in leading properties like WWE, football, Indian I-League and athletics, where I believe we are the home of athletics in India. We have also acquired a few more non-cricketing properties, which we will announce shortly. We are witnessing incremental growth coming from niche sports on Ten Golf and multi-fold growth from non-cricketing sports.

Unlike GECs, sports’ broadcasting is an evenly poised business and ad revenue is directly dependent on the events that take place during the year. But talking about the recently concluded South Africa Vs India series in December, we witnessed some healthy billing with bookings at 115 per cent and we sold out our ad inventories, which were nearly 30-40 per cent higher than any earlier India series. We also benefitted as it was a shorter series whereas a longer series leads to viewer saturation, which in turn, impacts ratings and advertisers and sponsors.

We are currently analysing all our properties and are in the process of identifying the possibility of hiking our ad rates as we believe we have been delivering quality content across our network and will continue to do so for years to come.

Q. How has your recent relocation from Dubai to Noida helped the channel? With huge investments in state-of-the-art studios and broadcasting and transmission centres, has it helped in creating better content for viewers?

The relocation was one of the best strategic moves made by Ten Sports, which we have completed in the last few months. It has helped us integrate our backend with the frontend, where until recently, Dubai was more for production, programming and other such activities and India was focused on distribution, ad revenue and marketing. With both aspects under one roof, it gives us the advantage of driving better synergies, helps us in integration and enhances the overall positioning of the company, which is strategic as well as commercial in nature.

For the last one year, we have invested heavily in in-house programming, state-of-the art studios, commentary rooms, master control rooms, new equipment and technology; all of which has really helped us enhance our graphics and production quality, which is evident on our channel and in the encouraging feedback from our viewers.

Also, as a sports network, we invest heavily in upcoming local leagues in India. We have been doing the production of the I-League in India for football and we have been investing heavily in audio-visual equipment to improve production quality. So, we are investing heavily in improving the way sports is consumed in India and we will continue to get the best of sports content and serve it to our viewers with the best production quality.

Q. In 2014-15, Ten Sports does not have much India-related live cricket; what is your programming strategy? Also, with cricket broadcasting being a highly loss-making business, how do you think it can become a profitable proposition?

As per the current Future Tour Program (FTP), we don’t have much India-specific live cricket, but Ten Sports as a sports network has never completely rested its fortunes on India cricket.

Other than India cricket in 2014-15, we have close to 150 days of international cricket. And based on the numbers we witnessed during the recently-concluded South Africa Vs Australia series, we are confident of replicating the same success during this calendar year as well.

We believe in segmentation of sports and if we take the example of the Asian Games and the Commonwealth Games, we have a huge in-house contest around both these games and with the improved performance of our athletes in the international arena and Indian viewers looking forward to these events, we will ensure state-of-the-art broadcasting coupled with great programming to make for a superlative viewing experience.

For any property to become profitable, the network has to have control over both revenue and cost. With cricket broadcasting, while the cost has sky-rocketed, with the mad rush to acquire content, revenue remains the only constant in the hands of broadcasters to drive profitability and generate higher numbers. But unlike developed markets, Indian regulators still somewhere regulate the pricing of channels such that it hurts the profitability of broadcasters. There is also a cap on the pricing of channels, and with things like piracy of signals, there need to be stringent, anti-piracy laws that can help make cricket broadcasting a profitable proposition.

With digitisation setting in, we are confident it’s going to help bring about change in the way sports penetrates smaller pockets of the Indian subcontinent. With an overall mix of sports on offer, we are confident that we will continue to deliver on our commitment of providing quality content and at the same time, acquire properties that are more in line with our content strategy.

So, with a reach of more than 140 million homes in the Indian subcontinent and a sports offering of WWE, US Open, ATP Tournaments, WTA, Ryder Cup, Moto GP, Euro league, PGA Championship, Asian Tour, European Tour and Tour De France; Ten Sports is all set to consolidate on its share in the competitive landscape of sports broadcasting.

March 1, 2014
We want to be amongst the top three Indian pay TV operators: Anil Khera

When the Dhoots of the Videocon group decided to foray into the direct to home (DTH) television business, the odds were stacked against them. Five other players had already established themselves, and the segment was already boiling over with competition. But that did not deter the Dhoot family which was keenly looking at investing in high growth emerging businesses.

They charged an old hand who had spent nearly three decades with the consumer durables and electronics group in various managerial positions in sales and marketing – Anil Khera – to get the venture going under Bharat Business Channel. Launched in 2009, with Khera as CEO, Videocon d2h, is another success story for the Dhoots.

And Khera has contributed in no small measure to that success. A very desi brand builder and marketer, he is known to have his ear very close to the ground, and his eye on the consumer. Today Videocon d2h has more than 10 million subscribers and claims to be the fastest growing company in terms of net DTH additions. And Khera is looking at further accelerating that growth.

He took out some time to speak to indiantelevision.com’s Vishaka Chakrapani about the company’s stellar performance, the way ahead and the DTH industry on an overall basis.

Excerpts:

How has 2013 been for Videocon d2h? What are your expectations in 2014?

2013 has been a tremendous year for us. We consolidated our market leadership further and maintained a 26-27 per cent market share in incremental growth. We crossed 10M subscriber base and introduced several innovative products like 1TB DVR recording facility in zapper boxes through USB etc.

We expect 2014 to be a similar year. We would also look at introducing new products and services to our customers like Anywhere TV etc.

What is good about the India DTH industry? How can it be made better?

The size of Indian Pay TV market in terms of number of subscribers is unparalleled across the world. Also, it’s a completely open market structure that promotes competition by accommodating several DTH and Cable companies at the same time. However, its overly regulated and high rate of taxation is the single biggest issue.

What differentiates Videocon d2h from other players?

The hallmark of Videocon d2h is its simplicity and execution focus in approach. Some of these can be described as:

·We constantly thrive on simplifying our offerings to customers.

·Our consumer durable DNA means we have decades of insights and knowledge on customer behavior.

·Our entire organisation is very execution orientated constantly speaking to trade and customers.

What are the value added services (VAS) that the subscribers get from d2h? How do you finalise the services for your customers?

We offer the following value added services:

·Pay Per View channel bringing the best and latest movies to our customers

·In house VOD channels

·Audio music channels bringing music across 20 genres ranging from religious to romantic

·Audio Video channel

·Premium subscription channels like Star World Premiere

·Special customised tickers like stock market updates 24X7 across any channel

Our services are finalised on the customer’s demands, maturity of offering and our hypothesis on future potential of the service.

Do you have plans to target the mobile space any time soon?

We would be launching Anytime TV sometime soon in 2014.

How many net customer additions did you have in 2013? Have you seen a fall in the number of subscribers?

We have added arguably the largest chunk of industry net additions in 2013. We have certainly seen dramatic fall in churn rates post phase 1 and phase 2 digitisation. We expect this to further drop post phase 3 and 4 of digitisation process.

How has revenue growth been in 2013? Has the revenue growth been on account of subscriber additions or rise in average revenue per user (ARPU)?

2013 has seen significant growth in terms of revenue. This has been on account of:

·Subscriber base has gone up significantly from where we were at the start of the year.

·Customer prices have seen a 5-6 per cent increase during the year.

·Increase in HD is improving our revenue mix and hence overall revenue.

·With reduction in churn and suspension rates due to digitisation, customer realisation has improved quite a lot.

Have your ARPUs grown over the years?

Over the past few years, ARPU has grown at a healthy double digit rate. We expect this to continue to grow and a low double digit rate for the next three years

How do you work on increasing your ARPUs?

We expect ARPU to grow by a low double digit this year on account of Better HD mix; marginal price increases; and introduction of VAS offerings like Anywhere TV.

Claims are that the DTH business has stayed stagnant for some time now. Your opinion?

While the overall industry is growing at only 10-12 per cent, this is not necessarily true for each player. Various players are growing at rates varying from negative to high double digit rate.

What is status of your IPO? Why has it not happened even after getting SEBI approval in March last year?

We have had fantastic feedback from potential investors across the world on our IPO. However, given the election year, there is uncertainty about any investments in the market at this point. We are waiting for the opportune moment and investor mindset to realise the true value of our IPO.

Do you believe that content aggregators are trying to push several unwanted channels along with the popular ones on DTH platforms? What is your way of dealing with the aggregators?

This does happen at this point for sure. We generally avoid putting unwanted channels. We focus on channels only which will add value to the customer and some channels which are entering in carriage arrangement with us.

Should the DTH players bring content costs down, or upselling is better as both the content owner and platform increases its revenues and thus the ARPUs?

This is the moot issue today as for the past 10 years DTH industry has alone bore the brunt of broadcasters cost. We have subsidised the cable industry for far too long. With digitisation complete in Phase I and II, major markets for carriage, it’s high time broadcasters and aggregators star treating digital cable and DTH at par. They can’t continue to expect DTH to fund everyone’s P&L forever. In entire value chain DTH is the only industry where all six players are still making losses.

Having said that, there is no doubt we need to continue to focus on revenue growth and subscriber growth also. We need to strike the right balance between growth and cost efficiency.

Are you planning to move from a fixed-fee deal with broadcasters to per subscriber arrangement?

In our view once a certain critical mass is achieved, which today almost every player has achieved, it doesn’t matter whether deals are fixed or per subscriber. There are similar robust calculations and negotiation that go behind it.

How many subscribers from phases I and II switched over from cable to Videocon d2h? What is your expectation from phsases III and IV?

Close to 25-30 per cent in various Phase I markets and 30-35 per cent in various Phase II markets have shifted to DTH. Our estimate is that 26-27 per cent of that has shifted to Videocon d2h. We expect Phase III and IV to be in favor of the DTH industry.

What is the vision for the company?

We want to be amongst the world’s leading top 10 Pay TV operators and surely amongst the top three in the Indian market. We want to be known for our simplicity, innovation and customer centricity.

February 16, 2014
We are just focused on creating an identity for ourselves in the space: Prasana Krishnan

He is the man with a plan for Multi Screen Media’s (MSM) sports channel Sony Six, and he is ensuring the channel continues to remain at the top of the game in all aspects.

Ever since he moved to the MSM stable from Neo Sports in early September 2013, Sony Six business head, Prasana Krishnan, has not only endeavored to bring in a wide array of sports which have their own loyal fan base, he has left no stone unturned in acquiring some of the biggest international sports properties such as the European Qualifiers for 2018 FIFA World Cup Russia, The FIFA World Cups of 2014 and 2018, the Australian Open and Total Non-Stop Action (TNA) to name a few.

Krishnan further opens up on Sony Six’s journey thus far and its strategy to navigate the road ahead in a tete-a-tete with indiantelevision.com’s Sidharth Iyer. Excerpt:

Q. It’s been six months since you took charge of Sony Six. How has the journey been thus far?

It’s been a very exciting first six months. The channel is still in its nascent stage and we are trying to create an identity for ourselves to stand out from the competition. The idea is to identify niche areas we want to operate in and figure out how we are going to attain long term growth in this business.

Q. This is your second stint with a sports broadcaster after being with Neo Sports for over seven years. Is there any change in your role and responsibilities?

Well, it’s a given that different organisations face different types of challenges, depending on the situation. Like in 2006 when I was with Neo, the market was not this competitive and it was a very different landscape. The market has evolved with time and the competition is now extremely aggressive. With Sony being one of the largest broadcasters in the country, it’s a whole new ball game for me personally.

Q. Has sports broadcasting changed over the years?

There have been significant changes in the space over the last few years. Back in the day when I entered this industry, there was no Indian Premiere League (IPL) and no leagues existed; test and ODI cricket were still dominant forms in the sport. A format such as Twenty-20 was unheard of globally. Cable digitisation was many years away and direct-to-home (DTH) was still in an experimental stage.

So if we really turn back the clock, the last eight years have witnessed a dramatic transformation in the media landscape in terms of distribution, DTH, cable digitisation and regulatory changes. The entire sports landscape too has changed with T-20 becoming a predominant format and leagues emerging not only in cricket but in other forms of sport as well.

Q. What is Sony Six’s strategy to grow as a sports broadcaster, given the fact that it is a highly competitive business? Is Sony considering launching more sports channels to offer a wider choice to viewers?

We are still in the first year of operations; we’re just 18 months old and trying to get a foothold in the market. So, as far as the idea of new channels is concerned, it’s a bit too early to comment on the same. But Sony Six the brand is clearly focused on a select number of sports, which we believe have latent potential but are underserviced.

If you look at basketball, it is one of those sports with the largest infrastructure facilities; schools encourage it, participation on ground level is very high and yet its potential hasn’t been tapped.

So, along with NBA in India, we are much focused to try and grow that sport in the country and we already have encouraging numbers to support our drive. We’ve found the number of people who sampled basketball this season have grown seven to eight fold that of the previous season.

Fight sports is one more focus area which other broadcasters have shied away from. India is traditionally known for its fight sports such as boxing and wrestling and the country has continually shone in the same at the Asian Games as well as the Olympics. So, what we have done is focused on fight sports as a category and included a daily programming block called ‘Action Ka Blockbuster’. TNA has grown by over 170 per cent in the past month and half. TNA ratings have peaked at 384 TVTs which is its highest ever rating in the past one year; Kurt Angle’s episodes have always rated the best amongst all so far. We have a mixed bag of fight sports including wrestling, boxing and mixed martial arts so the idea is if these sports interest you as a viewer, then Sony Six is the destination for you.

Additionally, we have some of the largest properties including the IPL, FIFA World Cups of 2014 and 2018, and the Australian Open beginning next year. So what we have done is assembled very high profile marquee properties and other sports where we see a lot of development potential. Our positioning is such that apart from IPL, we are the home of football in India, so anytime you see famous footballers, they are all on Sony Six. Plus we focus on national sides and not club football so every time there is a major event in this sport, you can view it exclusively on Sony Six.

Q. How would you describe competition from rival sports broadcasters?

It is an intensively competitive market but everyone has their own brand and identity, and the Indian market is big enough to accommodate multiple players, so it’s not necessary to take the competition head on in case of each and every property. Speaking of identity, Ten Sports has its own identity where it is focused more on international cricket while Star Sports is dominant in a variety of sports. We are just focused on creating an identity for ourselves in the space.

Q. Ten Sports acquires the rights for matches hosted by boards of other countries. Do you intend getting into that space? If so, what will be your strategy for entry?

We will look at it on a case-by-case basis instead of running in all directions to pin down whatever cricket telecast rights we can acquire. We have our core focus areas in place and we are positioning ourselves as the home of international football, along with basketball and fight sports. We have a good mix of quality content on offer. So, we just don’t want to go hammer and tongs in acquiring cricket properties just for the heck of it. However, when an opportunity presents itself, we will certainly take it up.

Q. What kind of numbers are you generating in terms of viewership and who are your viewers really?

Sports viewership sees a lot of fluctuating numbers primarily based on the event that is being telecast at that point in time. But what we have noticed is that our profile is younger than the competition and that’s our view, and we do believe that numbers are supporting that because of the nature of sports we have identified and picked.

The India vs New Zealand series has averaged 2.6 million TVTs with a peak TVT of 3.0 million TVTs for the third ODI. 49 million viewers have seen the ODI series on Six, this figure is far better than any other series in the recent past. With cricket, Six’s average TVTs have grown exponentially to a career high 459 average TVTs in Week 4 2013. It’s the first time Six became the no.1 sports channel in a non-IPL week. The channel’s share grew to 60 per cent from average seven per cent in the past four weeks.

Our reach and distribution has never been a cause for concern as we are part of a large network like Sony and are also ably distributed by The OneAlliance Group. The channel is pretty much available across the country to whoever needs it. But absolute numbers will always vary, because if you look at IPL, the numbers could well be in excess of 200 million viewers. So there really can’t be a fix on the viewers.

Q. How big is the advertising market for sports broadcasting? What is your share within the same? Which categories of advertisers spend the most on advertising on your channel? Are there any new emerging spenders?

The share of the advertising pie varies a lot depending upon the number of big events in a particular year, so if you get a year where you have the FIFA World Cup or Cricket World Cup, the amount of money pumped in at that point in time is significant.

We are definitely a major player in the sports market on account of IPL, but in absolute and not IPL-related areas, we are still in an early stage and yet to get to our first big event which will be the FIFA World Cup 2014.

So while we have made a string of acquisitions in the past few months, we are yet to prove our mettle with the first big event to be hosted and telecast exclusively on Sony Six. Advertising on sports channels is generally very male-skewed; apart from FMCGs, banking and financial services, telecom has always been prevalent, so also automobile and insurance.

Though there are subtle differences between advertiser profiles on GECs and sports channels, the big brands are always present across categories and it’s just a question of where they apportion a higher portion of their expenses.

Q. Sony spends thousands of crores on the broadcast of IPL on Max as well as Six, so what do you think of Star Sports jumping into the fray and bagging the online streaming rights for IPL by spending just a few hundred crores?

See the rights for IPL that Starsports.com has acquired are not for live streaming; they were with Indiatimes for the past three years, and YouTube was doing the telecast along with Indiatimes so the product itself is not new. Instead of YouTube, Starsports.com has now partnered Indiatimes. There is no fundamental shift at ground level, but because it is Starsports.com that has come into the fray, it is being looked at as a big development.

YouTube as a platform would have been even more formidable with its reach and availability, and an even bigger threat. Our focus is the television broadcast of IPL, and I believe we have been doing a good job of that year after year. From the viewers’ perspective, they will still be coming onto Set Max and Sony Six to catch all the live action and we really don’t see a problem in that sense.

What is the way forward for Sony Six?

The future is certainly quite bright. As I mentioned, we have our focus areas in place and we are going in a particular direction with a set plan. We are trying to carve out a niche identity, and we have a fairly robust and youthful audience in terms of viewership because of the kind of content we have on offer. The focus will now be on the execution and monetisation of plans already in place.

February 8, 2014
There is no Plan B for TAM if we lose our appeal in court: Kantar’s Eric Salama

The Indian television industry is possibly heading towards a crisis of an audience ratings blackout. TAM Media Research, a joint venture between Nielsen (India) and Kantar Media Research, is currently the only agency that provides television audience viewership measurement services to advertisers and broadcasters.

TAM has hit a roadblock in India with the government issuing policy guidelines for television ratings agencies in mid-January. It has an impossible deadline of mid-February to ensure that the shareholding in TAM is in accordance with the new policy guidelines.

Apart from having substantial (more than 10%) stakes in TAM, the joint venture partners in the Indian television ratings provider also own advertising agencies in India, which is prohibited in the policy guidelines’ cross-holding norms.

Nielsen appears to have taken a back seat and decided to let Kantar lead the challenge against the government’s new regulations and let TAM face the situation as it develops

Kantar has filed a petition in the Delhi High Court to get a stay on the shareholding norms specified in the guidelines or at least get an extension on the deadline for meeting meet the norms. There’s less than a fortnight left for TAM to comply with them, and it does not like its shareholders will be able to do so in the short time that was given to them.

The launch of television audience measurement by Broadcast Audience Research Council (BARC), an initiative of advertisers, advertising agencies and broadcasters in India, is likely only by October this year.

If Kantar fails to get some relief from the court, TAM will have to stop releasing audience ratings by mid-February which will obviously result in the absence of viewership being metered and measured till BARC is ready with its own services. And that is something which is giving both advertisers and agencies palpitations. Television audience ratings is a key input based on which advertisers base their advertising plans on.

In order to understand what the situation is and what could unfold, indiantelevision.com’s Vishaka Chakrapani spoke to Eric Salama, chairman and CEO of the Kantar group since 2007. Salama has been with global advertising agency WPP, the owner of Kantar, since 1996.

During the interaction, Salama rued that television ratings has become a matter of public debate and a “cricket ball” for everyone to hit. Excerpts:

How different is it operating in India as compared to other countries when it comes to television ratings?

We operate in most countries with the exception of Iran, Cuba and North Korea. We’ve never had problems in India before, IMRB is the oldest research agency in Asia and we see India as a key market for us going forward. We have some of our most talented people here. The TV ratings market is very different to other markets in that it has become a source for public debate and a cricket ball for people to hit.

How do you see TV ratings agencies progressing in India?

We’ll know soon enough!

Do you believe a ratings blackout is likely to happen? What could happen in such a scenario and how will the industry respond?

Unless the court rules in our favour on cross ownership, we are heading for a blackout which will be extremely damaging to broadcasters, programmers, agencies, advertisers and everyone who cares for the Indian media industry.

Do you think there is space for two ratings agencies to coexist?

It happens in some markets such as Philippines but it’s extremely rare as the industry generally wants one currency for trading.

I believe TAM has also applied to BARC for panel management in the industry-driven television ratings service. How do you see your relations with BARC taking shape?

Once BARC is established, TAM will either be a supplier to them for some services or not.

Should the sample size for arriving at television ratings be far bigger?

If people wanted us to expand our sample to 20,000 we would. When BARC is established it will be up to them to decide what they do.

Accusations have been hurled at TAM and its credibility has been questioned. Do you think TAM has been judged wrongly?

Some of the comments have been libellous. Many of them have been poorly informed. TAM has performed extremely well for a long period in a very difficult environment and under huge pressure.

What is the plan B if TAM is not allowed to function?

There is no plan B.

February 5, 2014
“IndusInd to soon start pre-paid cable TV services”: Tony D’silva

Almost a-year-and-a-half ago Hinduja Ventures Limited (HVL) brought Tony D’silva – a man with more than four decades of experience across sectors such as media, FMCG and pharma – on board as the president of the company to spearhead its Headend in the Sky (HITS) business.

Now, D’Silva has been given responsibility as MD & group CEO of IndusInd Media & Communications Ltd (IMCL) with long time MD & CEO of HVL’s flagship cable company Ravi Mansukhani stepping down earlier this week. As he takes on a bigger role, he is looking at betterment of the company with introduction of newer services. He sounds quite optimistic while suggesting prepaid model for billing and doesn’t hesitate in saying that he wants to give the local cable operators (LCOs), the rightful ownership of their subscribers.

In an exclusive interview with Indiantelevision.com’s Seema Singh, D’Silva talks about his plans for InCable and HITS.

Excerpts:

What does becoming the MD and CEO of IMCL and CEO of Hinduja Group-media mean to you? How is this development going to change Hinduja Group’s media businesses and your life professionally? What are your immediate challenges?

I have mixed feelings because the challenges are very steep. The future is exciting but there are grey areas to be covered before we achieve the state of growth with digitisation and monetisation. While I am looking forward to the challenges, I am wary of the fact that many hurdles need to be crossed. Bringing along processes is difficult and ultimately to monetise this business, the only way is to go prepaid.

The industry must refocus itself to become customer friendly and start customer care services. Everybody in the digitised world is looking at increased revenues. The only way to make more money is by starting packaging, bundling and including small packages with regional and sports channels. The customers need to be segmented. Those who can afford to pay more can take higher priced packages, while those who can’t can opt for the basic pack. Unfortunately, there is a mental block in the mind of the consumers towards cable TV. They are not ready to shell out much for cable TV experience, but there is no such block to pay for broadband or triple play or video on demand (VOD).

That’s where the entire industry should move. They should look at offering more value added services (VAS) and TV Everywhere services. This is what needs to be monetised. My focus will be on bringing the infrastructure to meet these requirements, putting procedures and making the whole business transparent so that every stakeholder in the value chain gets a share of the revenue.

As the Group CEO – media and MD & CEO of IMCL, you will be responsible for restructuring the entire media business and value creation, how are you planning to do that?

We have two-three different businesses. My role is to monetise all these businesses so that the value of the group’s media businesses can grow. While phase I and II of digitisation was all about packaging, bundling etc, phase III and IV is all about HITS. I am very clear that ultimately it is the local cable operator who should own the network. Even in the HITS business, Grant Investrade Ltd (GIL) will be the white label which will be a pure technology service provider, with VOD and VAS.

My aim is also to push the broadband segment which is lagging so far. We have a vast infrastructure for broadband which hasn’t been utilised. It is one area we will start developing now. We are not using that broadband, we are renting it out and they are monetising it. Now, we will restructure that segment as well.

I will look at restricting the business to area specific responsibility. Our focus will be on customer care, which involves interface with customers through call centres and backend support. We will also focus on the LCO: MSO relationship as cable operators are another crucial part of our business model. The third is the broadband and new services.

I would also want to make all our centres, profit centres.

As far as HITS is concerned, it is a separate business with a different team and focus.

Recently, Grant Investrade Ltd announced an investment of Rs 300 crore in the cable distribution business. How do you plan to utilise that investment? Will your approach for the growth of the company be different from your predecessor? How will you ensure HITS turns out to be profitable?

The previous management did a great job. There is no other way than HITS to deal with phase III and IV. With HITS, the average cost of delivering data that comes to be Rs 18 per customer through optical fibre will go down to Rs 8.

The HD box is the future and we will give HD boxes in the price of SD boxes. The operator in the HITS business is competing with DTH. The LCOs have the money but they face difficulty in buying bulk boxes. Thus, we are giving them the option of cash and carry. The operator has the option of buying boxes as per his need.

My profit is by profit of numbers. As my subscribers increase, my cost will come down. Initially, I may incur losses but then it’s a volume game for me. If we are serious about digitisation, the government should have first cleared our HITS project. We are saying the LCOs can own the consumers and can do the packaging. We will help them seed boxes. It is different than JAINHITS. We have three to four different boxes and they get an option to choose.

How much has been invested in HITS? Is more investment needed? When do you see the licence being cleared by the Information and Broadcasting Ministry?

We have been waiting since 14 months to get the licence. We have already spent close to $10 million in the technology which is handled by Castle Media and people. Another $100 million will be invested in HITS project. This investment will happen once we get the licence.

We are suffering because of the wait. When we started the project, the dollar rate was close to Rs 43, now it is Rs 63. Who will take the responsibility to pay for the escalation?

There is a turf war going on between the LMOs and MSOs? Are you looking at resolving these issues?

We are losing the focus in this fight, which is the customer. Industry is beginning to realise that just having subscriber numbers is not enough. We may not be the largest MSO in the country, neither am I aiming for that. My mission is to make InCable the most respected MSO in India. And that’s what the business model should be.

By when will the VAS and VOD services come in to effect? Will HITS benefit IMCL? Do you think the customer in phase III and phase IV will readily pay for these services?

A lot of this is application and we have a full fledged plan. Hopefully, when we launch HITS we will launch it with these services. These services will also be provided on InCable. IMCL will be HITS’ customer. The values and charges will be the same for IMCL as for other LCOs.

The content requirement differs in phase III and phase IV and so HITS becomes an important platform. We will provide different packages based on the requirement. In fact we are encouraging LMOs and MSOs to strike their own deal with broadcasters.

The customers in phase III and IV has money as well. We are targeting 20-25 per cent of the phase III and IV market through HITS. And that market is available.

Phase III and IV need 90 million STBs. How many of these will be seeded by IMCL? Is DTH a competition for phase I and phase II? Will you set up new headends for phase III and IV?

We will not seed STBs if our licence is not cleared.

It is true that in phase I and II cities, the MSOs have to up their antennas and come up with VAS services. 70 per cent of the boxes are SD boxes when the market world over is moving to HD. Are we expected to replace all the boxes later? That will be an expensive proposition. Most part of DTH and mobile is pre paid, so we should move towards that. This will promote transparency. We should be launching prepaid in couple of months. HITS will be a complete prepaid model.

No new headends will be set up in phase III and IV.

In how much time can we expect changes at IMCL?

I have given myself two months to at least start changing the process, procedures and start customer friendly actions by upscaling our call centres like those of DTH players.

By when will the ARPUs for MSOs go up? What would the increase be? Do you see it rising to Rs 500 in the next one year?

The customer will pay if you give him the services he wants. He has no restriction on the amount of money he pays for his mobile phone services. So there is no restriction on the money he pays. But don’t expect the ARPUs to go up if you do not upscale your services.

With gross billing, will there be more transparency in the system? Are you ready to share the carriage fee with LCOs?

I have serious concerns with gross billing. Who is responsible for service tax and entertainment tax? I do not have a problem if it is a prepaid model. The authorities have to realise that relevant issues need to be addressed before gross billing begins.

As of today, the carriage fee has supported the business model for the MSOs. We get the money from there. If the model changes, we will be happy to share the carriage fee.

Can we expect the launch of local cable TV channels from your end? Any numbers you are looking at?

We already have local cable TV channels. But now, as per regulation, these channels need to be encrypted. In InCable, we are revamping the system and encrypting the local channels. We have a separate company that deals with these channels.

In HITS, the local cable TV channels will be handled by the LCOs.

How do you plan to strengthen your broadband service? Any expansion plans in newer regions? Is there a plan to launch Docsis 3.0 broadband? What will differentiate you?

Broadband is one of the key to monetising. We have broadband, but not well utilised. We will use DOCSIS 3.0 and promote it now. We need to focus on the requirements.

February 1, 2014
Once we move to gross billing, revenue will increase three-fold: V D Wadhwa

These are changing times for the Indian cable TV industry, what with gross (consumer) billing starting in phase I cities and 27 January being the last date for submission of duly-filled Consumer Application Forms (CAF), following which, multi system operators (MSOs) will need to start major switch-off of signals.

In all of this, Essel Group-owned SitiCable Network, earlier known as Wire and Wireless (India) Ltd, has proved to be a game changer of sorts. Under the leadership of chief executive officer V D Wadhwa, the company has been at the forefront of change; whether it is giving access to the Subscriber Management System (SMS) to local cable operators (LCOs), launching local cable TV channels or the latest plan to launch a service on iOS and Android for consumers to view TV content on their Apple devices and smart phones.

An alumnus of Harvard Business School and a fellow member of the Institute of Company Secretaries of India, Wadhwa served as managing director and CEO for business operations in India and SAARC countries with the Timex Group before taking charge as the CEO of SitiCable Network in May 2013.

An avid squash player who dabbles in adventure sports, travelling and driving, Wadhwa took some time out from his busy schedule to speak to Seema Singh of indiantelevision.com on gross billing, setting up of cooperatives and the road ahead for SitiCable.

How has phase I and II of digitisation been for SitiCable? How much has been invested and what have been the returns?

We have approximately 10 million subscribers in the analogue universe. Of these, we have seeded 3.6 million Set Top Boxes (STB) in phase I and II of digitisation. The total investment so far has been to the tune of more than Rs 500 crore.

As far as the returns are concerned, the investment has been done with a payback period of four years. Expecting anything in the short term is not a realistic scenario. No one gets returns on investments immediately.

How many set top boxes will be needed for completing phase III and IV? What is the proposed investment for these phases? How are you looking at generating investment in the company?

Phases III and IV of digitisation has a total universe of about 90 million. Of these, we are targeting 6-7 million homes. At a gross level, we will require an investment of Rs 1200 crore. On a net basis, we are expecting an investment to the tune of Rs 600 crore.

The funding of Phase III will be largely done through warrants’ funding of Rs 243 crore, which is likely to be invested by promoters before March 2014. Balance funding requirement will be met through internal accruals and raising of further equity, as may be required.

By when do you think you will be able to reap the benefits of digitisation? By what percentage do you see the revenue going up?

The benefits of digitisation have already started trickling in and the full benefits will be visible from FY16.

Once we move to gross billing, the revenue will increase over threefold of what it is currently. Right now, whatever revenue is booked in the books of accounts is on net and not gross basis. Last year for the year ended March 2013, our top line was Rs 483 crore. In the last two quarters, we have achieved revenue of over Rs 300 crore and this growth trend in the current quarter continues. Once gross billing starts, the revenue will increase to over three-fold.

Have you come to any consensus on revenue share and billing with Last Mile Owners (LMOs) in Maharashtra? Are you going to allow LMOs to bill in Mumbai? By when do you see billing starting in Mumbai?

We have a 33 per cent revenue share with all our local cable operators (LCOs) and we do share 25 per cent of the carriage revenue with them, which is not the case with other Multi System Operators (MSOs). So, we are not facing any problem anywhere in the country. We have also given access to the Subscriber Management System to LCOs. Our approach is to consider the LCO as an integral part of the business and both the MSO and LCO have to co-exist. We, therefore, believe in empowering the LCOs by training them and providing them the backend support to enable them provide better customer services. This is the biggest advantage for SitiCable and this is helping us to significantly improve our subscription revenues as compared to other MSOs.

Now that billing has started in Phase I cities, how has the response been? Do you think billing has succeeded in bringing in greater transparency? How is it helping the MSOs?

It is too early to comment. The LCOs are not habituated to the system of gross billing. According to me, it will take at least two to three months for billing and collection to stabilise as per package. But there is gradual acceptance among the LCOs for the gross billing regime. .

Also, I would like to add that in Delhi, between Hathway Cable & Datacom, DEN Networks and SitiCable, we have engaged Mckinsey to help us stabilise the gross billing and gross collection. They will ensure that all MSOs follow the common policy of billing, collection and dunning. Since gross billing started in December, it is expected to stabilise in the current quarter.

The Telecom Regulatory Authority of India (TRAI) had given 27 January as the deadline to MSOs for collection of all Consumer Application Forms (CAFs) and feeding of details in the SMS for phase II cities. Are you switching off signals or is the process complete?

We received 94-95 per cent CAFs in phase I cities and for the remaining, the signals have been switched off. So in that way, we have completed 100 per cent CAF in phase I and submitted the compliance report to the TRAI. For phase II, 91 per cent of CAF has been completed. The regulator for all these months has been patient in giving us extensions. And, I personally believe if the deadline goes on getting postponed, the work will never be completed. The ultimate solution for these problems is to switch off signals for those who have not filled the forms and that is what we are doing, which is in complete compliance with TRAI’s order. In fact, in the last one week, we have switched off 50,000 subscribers nationally. This is to ensure that compliance as per TRAI regulation is achieved.

Where do you see entertainment tax headed? What led to taking the matter to court? Do you think the ruling will be passed in your favour? Do you believe that entertainment tax should be reduced?

As per the law, the MSO is responsible for entertainment tax. We approached the Delhi High Court, since we have always been collecting and depositing entertainment tax, and we did not want to face any coercive action being taken by the tax authorities. As per our information and inputs received from the market, other MSOs are also collecting tax from LCOs regularly. While the H’ble high court has asked SitiCable to keep submitting the entertainment tax, the high court has given the stay against any coercive action being taken by the Tax Department against other MSOs since they have taken the plea that they are not invoicing and collecting tax so far. No decision has been taken on who will be responsible for collecting and paying the entertainment tax as yet.

In SitiCable, we firmly believe that the payment of entertainment tax should be with the MSOs. Since the invoice is being raised by the MSO and the LCO is collecting the subscriber fee, I feel the power of collecting and depositing entertainment tax should be with the MSOs.

I have a very different view on entertainment tax. I do not understand why a consumer needs to pay both service tax and entertainment tax. When we provide them with cable TV, what is it? Is it a service or entertainment? Even for movies, consumers pay only entertainment tax, then why is it that the consumer has to pay entertainment tax and service tax for cable TV. We have raised this issue on several occasions to both the Information and Broadcasting Ministry and the TRAI, but without any heed.

The tax rate has to rationalise across the country. In UP, the monthly entertainment tax is 25 per cent of the subscription fee, while in Maharashtra, it is Rs 45; Delhi – Rs 20; Bengaluru – 6 per cent of the total subscription fee; and Kolkata, it is Rs 10. This differential tax structure will not allow the industry and gross billing to stabilise in these respective states.

I am hopeful that the tax will come down once the process of digitisation is complete. Currently, the tax department is unable to gain significantly due to digitisation. With complete digitisation, there will be transparency and hence, more tax collection. Then there will be rationalisation of tax.

By when do you think the process of digitisation will be complete?

There is no reason why digitisation will get delayed. The I&B Ministry is dedicated and so is the TRAI. Even the MSOs are gearing up for funding, getting STBs and seeding them. So I don’t see any delay in completion of digitisation.

Is the cable TV industry prepared to offer consumer service as available internationally?

I think there is a long way to go for that. We are taking one thing at a time. Currently, the Indian consumer is not even habituated to gross billing and taxation. The Indian cable TV market has not matured enough to be able to offer services like those internationally. Once gross billing is stabilised and every one becomes habituated with the system, only then we can move forward.

However, from the Value Added Services (VAS) point of view, we have started broadband service in the east and soon, we will be starting in the north. Also, we will be providing content on multiple screens to our subscribers.

Is broadband a key play in your revenues going forward? How will it be delivered?

Of course, broadband will play a key role. We will also soon introduce Docsis 3.0, which is the future. Besides broadband, by the end of this quarter, the content available on TV will also be available on iOS and Android platforms. The technical team is working on it and if there are no glitches, we will be launching the service on both the platforms together. We are the first cable TV operator to have thought of this service.

Do you believe building local cable TV channels is the way forward? How much will you invest in this? And what is the monetisation opportunity?

Local cable TV channels help in connecting with the consumers. We plan to launch four to five channels in each geography. While we have seven channels in central India, seven in Jaipur and four in Delhi, we plan to continue with this in other parts as well.

Launching local cable TV channels does not cost much since we already have a studio facility in areas where we have a presence. Such endeavours give a competitive edge over the Direct-to-home operator, since they cannot operate a local channel with local content and the MSO, as they do not have the facility for launching a local channel or have a rather small presence.

A local channel helps in giving out local news in local languages and most people prefer this. Then, advertisements help in generating revenue. So commercially launching such channels makes sense for the MSO.

How do we see the national landscape panning out: will there be a few key national MSOs? Who will these be?

Like in phase I and II of digitisation, the market will be dominated by four national MSOs: Hathway, DEN, SitiCable and InCable. It is only after complete digitisation that the country can expect foreign players to enter the market. These foreign players will bring better technology, transparency and competition. This will prove beneficial for the national players as well.

How do you see the MSOs coping with phase III and phase IV? Will DTH benefit? Or will we see new local players emerging?

While in phase III, the existing MSOs will play a major role and benefit, phase IV will witness DTH playing a major role. In phase IV, with towns having 5,000-10,000 households, it will not be commercially viable for cable TV operators unlike DTH players.

Local players may emerge in some markets, but as seen in phase I and II, the industry has been going through consolidation since digitisation requires huge Capex. The local players emerge since they can manage initial investments. But, they are not technology ready to serve consumers. Also, this is a highly regulated industry, which will be difficult for them to cope with. Considering they do not get placement fee from broadcasters, they can operate for a maximum of one to two years.

What challenges do you anticipate in Phase III and Phase IV?

Content is the biggest challenge. Currently, the ARPUs for phase I and II cities is not more than Rs 150. If it remains the same for phase III and IV, it will be difficult for us to operate in these towns. Broadcasters need to have differential pricing for these markets.

January 28, 2014
“My immediate focus is on turning around Sony Ent, our flagship channel”

He has been fairly low profile, mild-mannered and soft spoken. But underneath the soft exterior NP Singh is tough as nails and a fiesty fighter just like many from the Sikh community – to which he belongs – are known to be. Recently, Singh was hoicked to the CEO’s position at Multi Screen Media India – Sony Entertainment Television Network India – after running it as COO for nearly a decade. He replaced Man Jit Singh – who has moved on to a global position looking after its home entertainment business.

NP is a long time Sony loyalist as he joined it way back in 1999 as CFO.  He has been given charge at a challenging time when the network’s flagship channel Sony Entertainment is at  a lowly sixth position amongst Hindi GECs, just a tad above Sahara. That’s a far cry from the third or fourth spot it occupied until 2012.

Currently in his mid-50s, has seen the highs and lows of not only the Sony Entertainment Network, but the industry as well. His appointment has put his rivals on alert because it is he who pushed the transformation of Sab into a topnotch Hindi comedy offering, Pix into a channel showcasing Hollywood blockbusters, and successfully launched Mix in a crowded music channel market place.

In a conversation with Indiantelevision.com’s Seema Singh, NP speaks of his immediate plans and the road ahead.

Excerpts:

15 years in Sony and now becoming the CEO. What is the feeling?

I have enjoyed every day that I have been here. I joined the company in June 1999 as the CFO and then got elevated to the position of chief operating officer and now the chief executive officer. I have seen the entire journey. The company is 18 years old and I have been here for the past 15 years. I have been a part of a lot of success and have also faced multiple challenges. Overall, it has been a fantastic journey. I am happy that I have been given the role to head the company.

What are the challenges that lie ahead for the Network?

The number one priority for me is to turn on the power of the flagship channel, Sony. In the short time, this will be my focus. We have seen success on the flagship channel not too long ago. In 2012, the channel was doing extremely well. Since 2012 end, the channel started seeing a drop in viewership; my objective is to arrest that drop and put the channel on the path of growth.

Every CEO has a dream team. What is yours? Do we see any management changes in the future? Who do we see as the next COO for the Network?

We have a strong management team with very good talent across the company. And we have been proud of the team and I will continue to work with them to achieve the dream that we have collectively for the company.

Changes are a part of life and as we go forward, there may or may not be any changes, but it is too premature to comment on.

For now there will be no COO for the company. We have a strong management team and I will work directly with them to achieve the objectives set.

Will life change for you after becoming a CEO?

I have been here and have been partnering with Man Jit Singh who was here as CEO earlier. I have been part of all the successes and challenges and am acutely aware of what needs to be done. So it doesn’t have any major impact on my life going forward. Except that I will not have a COO right now and so I will interact with the management team directly. This means I will be spending more time in the office, of which I do not complain.

What are the opportunities you have as a CEO?

There are multiple opportunities. In the near term, my first priority is the turnaround of Sony and within that lies an opportunity for growth in revenue of the company. I see growth opportunities on the distribution side as well. That is something we have to stay focused on and we have to help grow the ARPUs at the subscriber level so that the benefit can flow right through the value chain upward to content owners like us.

I see huge opportunity in the exploitation of digital platforms through mobile phones and tablets. If we can get our content to the audience through this medium, we will see a huge rise in revenue.

I also see an opportunity in the regional market that we will evaluate over a period of time and then make our choices.

Sony launched ‘Sony Mahotsav’ in UP, Punjab and Haryana starting from November 2013. What was the reason for it and how has the response been?

We launched it with the objective to engage with our viewers in these markets. We want to take the brand to these markets and also our artistes from major shows to those cities to make the brand more accessible to them.

The response has been positive and we will continue to build on this initiative going forward as well because we want to engage audiences of smaller towns with the channel. This is one initiative. We are also trying to build that engagement through our content and communication.

Phase I and II of digitisation is complete. Do you see that helping the Network in getting better reach and viewership numbers?

Digitisation will not grow our overall viewership base. It will lead to more transparency from the broadcasters’ perspective. Because digitisation will bring about addressability, there will be more information/ transparency about the viewer or subscriber we have for the network. Having said that phase I and II have been completed, set top boxes (STBs) have been installed in the households, but the real addressability has still not happened.

There is still time for that. The MSOs do not have the database for those STBs. We are supporting them through campaigns running on our network. Hopefully in the next few months, they can get the data from the local cable operator and create a database and then start invoicing the subscribers directly. That will happen in the next few months and then over next two years complete addressability will come in and there will be benefits right from the viewer up to the broadcaster and content creator.

Sony has always believed in experimenting with the content. But the past few years have not done too well for the channel. Is it that the channel is too ahead of time? Why aren’t you able to connect with the audience?

It is a combination of multiple factors. Till 2012, we were clearly the number two ranking channel.  We were also at number one during the nine week period when the ratings did not get reported. But since then we have seen a decline in viewership and there are multiple factors behind it. One of the key factors was the universe update by TAM and the inclusion of LC1 markets in reporting viewership. The LC1 market has a 25 per cent share in the total viewership pie and that impacted our ratings. Secondly, some of our fiction shows also didn’t perform the way we expected them to.

But we are the pioneers in the many new concepts and ideas. Some of them have been way ahead of time, for example the YRF shows that we brought to our viewers. Those were top quality shows that were accepted and appreciated by one set of audience, while not taken well by the other set of audience. But that doesn’t mean we will stop coming up with path breaking ideas. We have not been successful in the recent past, but that will not stop us from continuing to follow that path.

The fiction shows have not done well for the channel. Also the non-fiction slate is developing fatigue. How do you plan to strengthen the programming slate?

We have to continue to innovate. We did that successfully with the last season of Indian Idol in which we introduced kids. Also in Kaun Banega Crorepati (KBC) we brought several innovations. Though it was well received in the beginning, eventually it settled down at a lower number. But that doesn’t mean there is fatigue with the format of the show. We will do something more when we bring KBC the next time.

We are looking at refreshing our weekend primetimes and that is why we got Boogie Woogie back on TV, which is doing well for the channel. We will be bringing back Entertainment Ke Liye Kuch Bhi Karega as well. The first and foremost task is to look at our fiction strategy and revamp that. Our plan is to bring in new shows to weekday primetime and strengthen it. We realise that it is there where we can build loyalties with the viewer. So that is the focus, followed by refreshing the weekend.

Though Sony India is doing well and contributes some 40-50 per cent  to the overall revenue of the Sony Pictures’ media networks business, there is pressure on Sony from investors such as Dan Loeb to make Sony’s entertainment business deliver. Is that putting any pressure on you? How do you plan to cope with that?

MSM is a very strong performer for the entire Sony Corporation. We have performed really well and India has a lot of growth opportunity and we are getting a lot of investment from the parent into the company. Whatever new initiative we come up with, till the time it makes strategic and economic sense we will get investment support from the parent.

You will be reporting into Andy Kaplan, what is it like to work with him? Are there more challenges now?

I have worked with Andy for the past several years and I don’t see any change in the dynamics of our relationship. I look forward to working with him even more closely now.

What do you think is missing in the Sony slate?

There will always be some unfinished agenda at any point in time. But right now we have everything to make the network more successful. There are some new initiatives that we are working on for the future growth of the network, which we will announce in due course of time, but first and foremost objective is the turnaround of our flagship channel.

The network bouquet looks weak without any strong regional offerings. Are you looking at strengthening it by moving south?

We have one channel in West Bengal. So we have one channel as far as the regional space is concerned, but it is a small channel, which has carved a niche for itself. We are looking at some other markets and currently we are evaluating all the options and will make our choice in due course of time.

Unbundling of bouquets is something which Dish TV has recently encouraged by offering IndiaCast channels on an a la carte basis. Then the TRAI may soon come up with its recommendation paper on aggregators. Do you see that affecting the distribution of channels?

We always follow very collaborative process in any negotiation that we do with our partners and like everyone else Dish TV is also a strong partner. We have had strong relations with them in the past and even now.

There has been a lot of conjecture about the TRAI consultation paper on aggregators, but no one knows what will happen. Will cross that bridge when the recommendation comes out.

Are you looking at launching any new channel?

We never do something because other networks are doing it. We always do things that are good for our Network. We will do what makes strategic and economic sense for us. And from that perspective, if we have to launch a new channel we will.

You can watch more of what the Sony Entertainmetnt CEO has to say by clicking here: Executive Dossier with MSM India CEO NP Singh

January 10, 2014