|
Venus Records & Tapes director Ratan Jain is a busy man, collecting box-office feedback from his new release De Dana Dan.
Built on Rs 670 million with Eros as an equal partner, the movie is crucial to Jain‘s expansion plans. He is readying a movie with Priyadarshan and another with Abbas-Mastan after having stayed away from film production for a brief while due to an unrealistic rise in prices.
Venus has one-third of its revenues coming from music. With a correction in prices, the company plans to swing back into acquisition of titles.
Venus is also considering an initial public offering (IPO) to fund its expansion plans.
The company expects to clock a revenue of Rs 1.20 billion this fiscal on the back of a big movie release and the music business.
Cutting across his busy schedule, Jain speaks to indiantelevision.com‘s Sibabrata Das and Ashish Mitra about the need to be cautious in an overheated movie market.
Excerpts:
The prices skyrocketed and we decided to stay outside the ring. Some companies wanted to scale up and actors and technicians jacked up their rates to an unrealistic level. The movie industry went haywire. The same thing happened to the music industry. For the films that we released, we, however, kept the music rights. But it did not make business sense for us to acquire music rights at such inflated prices.
They have definitely corrected to a large extent and things have come to some state of reality. But some actors and technicians are still looking at extremely high rates. Despite a fall in the cost structure, there is a scale down in the number of movies being produced this year. Venus has swung back into action with a big budget movie De Dana Dan. Has the co-production with Eros come at the right time for you? The movie is made on a budget of Rs 670 million and it is a 50:50 joint venture project with Eros. While Eros has kept the home video and international distribution rights, we have the India distribution and satellite TV rights. Baba Arts is handling the distribution for us. Early indications from the box office show that the movie is going to be a hit.
Priyadarshan makes out-and-out comedy films. De Dana Dan also marks the return of all three protagonists of Hera Pheri – Akshay Kumar, Suniel Shetty and Paresh Rawal.
Yes, Maan Gaye… released on 22 August 2008. And I rolled the shooting of De Dana Dan on 26 November last year, the day the terrorists struck in Mumbai. I remember when we were in a middle of a shoot, we got a call from a friend of mine that terrorists were firing at CST.
As far as my film goes, we do a research of at least six months and then go in for shooting. This film has taken exactly a year.
I don‘t see Venus doing more than two movies a year. We could also be doing smaller movies but it is difficult to market and release them. We have two projects in the pipeline – one with Priyadarshan in August and the other with Abbas Mastan.
We are in advanced negotiations to sell the rights. Syndicating the movie to multiple broadcasters is good for channels but not for us. It takes time to recover money. And it has worked when you have big hits like Jab We Met and Singh is Kinng which can have many runs across channels. Syndication also works when you have a basket of films. ‘We expect to clock Rs 1.20 billion in FY‘10. Venus is not just surviving on movie releases. We have a strong music business. We also trade in satellite TV and video rights‘ Have prices for satellite rights slumped this year? Prices have fallen compared to last year. Internal competition and entrants have spoilt the market. We had fictitious prices ruling the market.
There is no recession in the entertainment business. We clocked over Rs 1 billion last fiscal and are expecting to have a turnover of Rs 1.20 billion in FY‘10. Venus is not just surviving on movie releases. We have a strong music business. We also trade in satellite TV and video rights.
Music accounts for 30-40 per cent of our total turnover. Besides mainstream Bollywood, we bring out music CDs of all kinds including ghazals, regional languages and bhajans. We are exploiting the digital and mobile platforms. A major chunk of our revenue comes from downloading.
With the prices going berserk, we largely stayed out of it. But we have a vast library, holding over 3000 music titles. While 600 are film music titles, the remaining are non-film music titles.
On the movie front, we have negative rights of 50 movies.
There were commitment issues. While at that time we thought of that as an expansion route for us, now we are not looking at such alliances. Are you looking at other ways of raising capital to fund your expansion plans? We are considering an initial public offering (IPO). We were not ready for a public listing then. Now we have taken the necessary steps. We could also be looking at a pre-IPO placement. But we haven‘t frozen our plans yet. |
Category: Executive Dossier
-
‘We are considering an IPO’ : Venus Records & Tapes director Ratan Jain
-
‘We will be the No. 1 distribution company this fiscal’ : Zee Turner chief executive officer Dinesh Jain
Zee Turner Ltd, the joint venture distribution company between Zee and Turner, is eyeing a revenue of Rs 10 billion this fiscal on the back of a faster growth from DTH while pay-TV income from cable TV stays strong.
In the earlier fiscal, Zee Turner had clocked Rs 7.5 billion after adding Ten Sports into the bouquet.
Regionalisation will be a big growth driver for Zee Turner. With Zee Telugu and Zee Kannada turning around, the contribution from the southern region is also set to improve.
Adding channels in the bouquet, which has a strong mix of general entertainment, movies and kids content, would form a part of Zee Turner‘s growth strategy. The plan is to have 50 channels within two years.
In an interview with Indiantelevision.com‘s Sibabrata Das, Zee Turner Ltd. chief executive officer Dinesh Jain talks about the company‘s bouquet strength across 16 genres, the efforts to fill in the gaps and the next wave of pay-TV revenue growth in a digital environment.
Excerpts:
Zee Turner has set an ambitious revenue target of Rs 10 billion this fiscal. Has this growth momentum since the last fiscal been led by the addition of Ten Sports?Yes, Ten Sports has contributed but our organic growth has also been significant. I can‘t, though, comment on what our target is. But we expect to get a little under 20 per cent growth from cable TV while revenue from DTH will be at a faster pace. We, after all, have the widest bouquet with 35 channels.
But isn’t the weight of the bouquet a weakness in today’s environment where cable TV networks have no bandwidth and charge hefty carriage fees?Providing such a wide choice is, in fact, our biggest strength. We have presence across 16 genres and have the maximum number of movie and regional language channels. In the Hindi general entertainment channel space, Zee TV is very powerful. And we have the strongest kids content in Cartoon Network and Pogo. We are a top-of-the-mind bouquet.
Our plan, in fact, is to have 50 channels within the next two years. We may not release all the channels to all parts of the country. But they can be driver channels for the relevant market. We will increase the width and depth of our portfolio.
But Zee Turner is still not the largest broadcasting distribution company in terms of revenue?Yes, our revenues are not in line with the strength of the bouquet. But we are the fastest growing company today. We will be the No. 1 distribution company this fiscal.
Will the new wave of pay-TV revenue growth come from the regional markets?Regionalisation is a big thing for us. We have the largest bouquet of regional channels. We have, for instance, big drivers in Zee Marathi and Zee Bangla. News is also becoming regional and in local language. Zee has launched several regional news channels.
We have set up task forces to cater to these regional portfolios. We are connecting the interiors for the regional packages and doing local trade marketing. We see big growth coming from our regional channels.
Even in the South, which was a weak link, Zee Turner would be on a stronger wicket with the turnaround of Zee Telugu and Zee Kannada?The contribution from the South has increased as our Telugu (Zee Telugu) and Kannada (Zee Kannada) language channels started delivering. But we also had a strong base there due to our English content, led by HBO, Zee Studios and Zee Cafe. We have added WB, the English movie and entertainment channel, this year.
We expect the pay-TV revenues from regional channels to look up, including the South. Zee Marathi, Zee Telugu and Zee Kannada will give us faster growth. We will also be taking our Zee News Uttar Pradesh and Zee Tamil (which will transition increasingly to a news channel) channels pay in the next 6-12 months. This will mean that all the 35 channels in our bouquet will be pay.
Do you still miss the English news genre in the bouquet after CNBC TV18 moved out?
We do not have channels in genres such as infotainment, travel, English general news and English business news. There are some regional languages where we are also absent. For completing our portfolio, we would be looking at filling such gaps.
‘Regionalisation is a big thing for us. We have the largest bouquet of regional channels. We have big drivers in Zee Marathi and Zee Bangla. Zee has also launched several regional news channels‘
The government has recently come out with a Headend-In-The-Sky (HITS) policy. How do you see this impacting Zee Turner?
HITS offers another great opportunity for digitisation and addressability. We expect the Telecom Regulatory Authority of India (Trai) to come out with a pricing policy for HITS. As long as the delivery platforms and addressability are similar, the pricing policy should be same.
Do you strongly feel that Trai needs to lift the freeze on pricing?The freeze in pricing has led to anomalies. Different channels in the same genre are priced differently because they were launched in different dates. The price freeze will not, thus, impact the channels equally.
A case in point is Zee Sports. If Zee Sports is to acquire a cricketing property paying as much as Star Cricket does, it will be at a disadvantage because of the price freeze. Launched later, Star Cricket is priced higher.
Trai, in fact, is looking at revisiting the price freeze issue. Today there is enough competition in the market for channels not to start profiteering from high prices.
Is Zee Sports turning out to be a liability as it is devoid of cricket after failing to bag the BCCI rights?No, but then there is definitely an opportunity loss. However, it is overcome by the strength of the bouquet.
How is Zee Turner gearing up for the digital environment?We are building capabilities for the digital environment – be it IPTV, DTH, cable TV or 3G devices. India will have all models successful because it is such a huge market. We have created vertical heads separately for digital, analogue cable and commercial business 18 months back to bring more focus into these business segments.
Do broadcasters see faster growth coming from DTH?Cable TV currently accounts for 70 per cent of the broadcasters’ pay-TV revenues. We see the industry settling at an equal ratio between analogue cable and digital platforms within two years.
Broadcasting distribution companies have entered into joint ventures like Zee Turner, MSM Discovery and Star Den. Is there scope for further consolidation?
There are still many splinter groups such as Sahara and UTV. At some stage, they may decide to align. We are looking at such opportunities and alliances.
Cable networks have been consolidating over the last few years. How do you see this impact broadcasting companies?The market is getting matured and organised. Though we are seeing the emergence of bigger MSOs (multi system operators), this will mean that the business is getting more rationalised. Bigger cable companies will look at improving bandwidth. There will be huge upsides – much like the coming together of organised retail helping FMCG companies.
, Zee Studios and Zee Cafe. We have added WB, the English movie and entertainment channel, this year.
We expect the pay-TV revenues from regional channels to look up, including the South. Zee Marathi, Zee Telugu and Zee Kannada will give us faster growth. We will also be taking our Zee News Uttar Pradesh and Zee Tamil (which will transition increasingly to a news channel) channels pay in the next 6-12 months. This will mean that all the 35 channels in our bouquet will be pay.
Do you still miss the English news genre in the bouquet after CNBC TV18 moved out?
We do not have channels in genres such as infotainment, travel, English general news and English business news. There are some regional languages where we are also absent. For completing our portfolio, we would be looking at filling such gaps. -
‘AXN prides itself on always being a challenger brand’ : Sony Pictures Entertainment senior VP, GM Ricky Ow
These are challenging times for pan Asian broadcasters. The economic downturn has meant that ad revenue targets will not be easy to meet. And for the action-oriented broadcaster AXN, this is more so with its parent Japanese electronics major Sony scaling back as it posted its first loss in many years. Sony Pictures Entertainment (SPE), however, is looking at opportunities to snap up assets in the Asian region that would come at an attractive price.
AXN, which launched in 1998 as an Asian channel, has grown in stature and moved to the matured markets, attracting male audiences. Localisation has also worked as a strategy.
In an interview with Indiantelevision.com‘s Ashwin Pinto, Sony Pictures Entertainment (SPE) Networks Asia senior VP, GM Ricky Ow elaborates on the channel‘s brand positioning, growth, challenges and expansion plans.
Excerpts:
Parent company Sony is scaling back due to a downturn in the global economy. How is this affecting SPE Networks Asia in terms of investing more in content and channels?
SPE Networks – Asia will continue to invest in content and channels because opportunities are presenting themselves in Asia. Especially during such tough economic times, people realise the need for television as an affordable form of entertainment. With the wave of TV digitisation starting to sweep through the region, there will be opportunities for us to grab some real assets in the new digital world.
What are the challenges that pan Asian broadcasters like AXN face in these tough times?
Firstly, there remains substantial revenue leakage through piracy. Secondly, competition continues to increase with more channels and choices entering the market. As audiences become increasingly fragmented with growing competition for their attention, business plans have to remain relevant.In addition, new media offers opportunities for the brand to go beyond television – for content to be consumed anytime, anywhere, in many forms. At this time, however, all players in the industry are still in the race to find the perfect business model that will work for new media platforms.
Another challenge is that the English GEC genre is perceived to be used as a ‘snack‘ by viewers. How do you go beyond that and try to build stickiness?
It is a misconception that AXN offers ‘snack TV‘. Many of our shows are of an hour‘s length per episode and others are even two hours long. AXN programmes offer a destination to escape to. One of the reasons why we have remained as the dominant player in this genre is that we offer something different and viewers actually watch and follow, not just surf through our content.
When Sony launched AXN in India way back in 1998, it was to be an action and adventure channel for male audiences. To what extent have the objectives been achieved?
When Sony launched AXN in India back in 1998, it was the first action and adventure channel. We had set out to be the first to create such a genre, and to be the best. I think we have succeeded as we continue to offer the best today, even in the face of rising competition from channels trying to replicate AXN‘s successful model.We also wanted to offer high quality English entertainment to audiences in India as well as the rest of Asia that is growing in sophistication and affluence. We felt that a channel with unique content of distinguished quality will not only excite the top end of the market, but also markets that are as a whole more mature, with viewers that are sophisticated and well-travelled. I believe that these goals have also been achieved today.
How has AXN evolved as a brand over the years?
AXN began as a high-end proposition. It was one that targetted affluent adults as well as children from affluent households. Since then, action and adventure as a genre has in many ways extended itself to mass markets because it is a universal language. With the viewership numbers that the action and adventure genre is delivering today, AXN is definitely not a niche channel, but a unique content destination with far wider appeal than we originally thought.
‘Investments of the earlier days into on-ground events, then into original programming, and more recently into the Action Awards, have all worked out well for AXN‘
What were the challenges AXN faced in establishing the brand?
AXN was blessed to have started out when competition was not that great in the market. A brand is made up of a brand promise and product fulfilment to the consumer. For AXN, our brand promises and product fulfilment have always been very closely aligned since its early days. In a lot of cases AXN over-delivered on brand promises, and that has had a long term positive impact as the channel has won over audiences‘ loyalty and affection.The best evidence of that was seen during the ban on AXN in India some years back. Viewers missed AXN and wanted the channel back on TV. This was strong testimony that AXN has indeed done well as a brand.
Investments of the earlier days into on-ground events, then into original programming, and more recently into the Action Awards, have all worked out well for what AXN stands for.
AXN started as an Asian channel and then moved elsewhere. How far has it succeeded in this?
AXN was born in Asia and was then marketed around the world. This shows that quality channels need not always be created in the West or elsewhere and then parachuted into Asia. Sony had the belief and confidence we could launch a channel first in Asia, and then bring it around the world.We have created original content like AXN Asia‘s The Amazing Race Asia. The reality race has been one of the most difficult to produce, and yet we have done well at it. In doing so, we have achieved our goal of creating original Asian productions which are good enough to be watched around the world.
AXN Asia‘s sister channel Animax, Asia‘s anime and youth entertainment channel, has also made breakthroughs. In 2009, Animax offered content in shortened broadcast windows, via simulcast deals with Japanese studios and broadcasters. Shows like InuYasha – The Final Act and Fullmetal Alchemist Brotherhood have been broadcast within the same week as the Japanese broadcast, and Tears to Tiara in a same-time-as-Japan simulcast. This has been a big step to ensure fans and viewers catch the shows on the channel and nowhere else.
AXN and Animax were among the first channels in the region to provide mobile offerings. Animax Mobile 3G streaming service was launched about two years ago, while AXN also had mobile-based content for its top shows. A highlight of AXN‘s mobile venture include exclusive video footage which was unavailable on TV, for The Amazing Race Asia in ‘The Host‘s Diary‘ where show host Allan Wu shared his thoughts and added to the entire show viewing experience for AXN viewers.
And on the marketing front?
On the marketing front, AXN prides itself on always being a challenger brand. We continue to view AXN as a challenger and are prepared to pursue innovative and creative marketing strategies to grab attention, but without offending the cultures, sensitivities and sensibilities of each market.The ads that we have created over the years have always been outstanding, and can capture viewers‘ attention and excitement of the channel, but never offensive. We have been consistently doing so and AXN is one of the few TV networks in Asia that have pursued such aggressive marketing strategies.
In 2002-2003 AXN made a deliberate shift away from movies and focussed more on top line shows like Alias, 24. What factors prompted the move and how did this help in terms of ratings?
In 2002, AXN shifted in focus away from movies, but the channel continued to offer regular movie slots. The shift in focus was to ensure AXN had a richer variety in the programming mix that still offers action and adventure to our viewers.Back then, drama series such as 24 and Alias were not as well watched as movies, but seeing that the quality of production in such series were as good as some movies, we were confident viewers would take to the new drama series on AXN.
Indeed, movies widen the overall reach of channels. However, our reduction in movies has not affected AXN‘s reach in this case; movies continued to be part of the programming mix. The increase in drama series offerings enhanced AXN‘s connection with viewers at the top end of the market. This is difficult to measure by ratings, but there are considerable viewers that AXN reaches out to. They are opinion leaders and trend-setters, and they demand such content.
AXN‘s ability to successfully market such drama series has also contributed to greater viewer ‘stickiness‘ to the channel. While a movie is a one-off show, drama series average 13-15 episodes per season, and that has worked to keep audiences coming back to AXN.
How big a role have local shows played?
We started off with local events and progressed to producing local shows, both of which added to the overall AXN experience. In recent years, AXN has focussed on regional or international shows that India is a part of. While such regional shows are not dedicated to India alone, these offer a totally different experience to Indian audiences. We will continue to produce more of such regional shows that will include India and the rest of Asia.Local events, local shows and regional shows with local elements have all brought different types of experiences and enjoyment to Indian audiences. With India becoming an increasingly important market for everyone including SPE Networks – Asia, we expect to offer more of the three different initiatives – local events, local shows and regional shows – in time to come to provide even more connectors with AXN.
Is the localisation strategy the same across Asia?
Localisation strategies are very similar across Asia, but with some markets having more localised shows and others able to participate in the regional shows that AXN creates. In that regard, we have been able to rope all markets in, and offer the same AXN touch and feel across the region.The economic downturn has helped SPE Networks – Asia as a whole to refine our plans. It has helped us re-set our priorities, re-evaluate our templates of success, and rethink if we can do things better. The economic downturn has definitely impacted us and everyone else, but we believe we can derive a positive outcome from it by re-examining what we assumed had worked in the past, and come up with new strategies to move forward.
How has AXN fine-tuned its localisation strategy this year?
We have invested in local productions such as the AXN Action Awards, and will be looking at opportunities that can bring a very different touch in original productions that are relevant to India.In addition, we have introduced English subtitling in India to enable viewers who may not be used to some of the accents to still enjoy the shows on AXN.
What is the programming focus this year?
AXN has embarked on three major changes in 2009. Firstly, we have made aggressive efforts to introduce magic-reality programming in a big way, in India. We have brought two of the biggest magicians in the world – Criss Angel and David Blaine – to AXN viewers. These two are now household names not just in the U.S., but in Asia too. Coming up, AXN will be introducing another world-class magician in our brand new original production, called Cyril: Simply Magic.All three have been some of the most sought-after street magicians. With Cyril, his exposure in India has been limited so far, but with the upcoming production, viewers can see for themselves his brand of magic.
In addition to the three magicians, we also premiered Breaking the Magician‘s Code. Unveiling the secrets behind the illusions and tricks, the show is able to really bring in both the high-end viewers as well as a wider audience base. I have high hopes that the series will do very well in India.
A second new initiative that AXN has embarked on is the expansion of AXN‘s reality block to three-hours. The key difference here is that a large number of channels are now offering reality programming that have been successful on AXN, but audiences still recognize that we brought them the original, and continue to do so, and hence viewers are still watching AXN. Anchoring this block are good shows such as So You Think You Can Dance? and the latest reality game show WipeOut, which is produced by the same team that brought on Fear Factor.
Thirdly, we have also increased our movie slots over the weekends to offer a wider appeal to audiences and broaden the viewership base.
To what extent have programming costs risen over the past couple of years with attempts to bring in the latest shows and seasons?
AXN has always been bringing first-run and latest seasons of shows to offer the newest and best programming from the US, Europe and around the world on our channel. This is not new as it is one of the key reasons why viewers continue to tune-in to AXN.Indeed, the cost of programming has gone up over the years. But since this has been what we have been doing all along, the increased cost continues to be within our expectations.
Is new media going to play an important role for AXN in the coming two years like what it does in countries like Korea?
There is no doubt that new media will play an important role in the future. The Internet has already proven its importance with governments having won elections using the medium cleverly. The growth of mobile usage, with ubiquitous ownership of mobile phones and lines among the masses, make the mobile platform very attractive to marketers. However, we, like everyone else, are still figuring out the business model for new media platforms at this point in time.New media adoption however, differs from market to market. Infrastructure, strategies, timelines, and market forces determine the rate of new media adoption in individual markets. Korea and Japan are leading at this point in time as early adopters of new media, while smaller markets like Singapore and Hong Kong are also ahead as these are smaller markets that offer ease of policy implementation and infrastructure establishment.
We believe that there will be a lot more experimentation with new media in the next few years as the world races to find solutions to tap into new media platforms. As for India, it continues to be a volume game due to the size of the market. We are optimistic that with the right pricing, consumers will be persuaded to use new media, and because of the size of the market, the returns can still be very attractive for firms. We believe that once the necessary infrastructure is in place, there could be an explosion in new media take-up in India.
In the US, CBS opened an upscale restaurant where fans can experience the brand. Would this concept work in India and Asia?
We certainly believe such a concept can work in India and Asia. In fact, we have been previously approached to set up AXN Cafés and Animax Cafés in the region.We believe that with the right partners who have the necessary expertise, coupled with the right level of commitment they put behind our brands, such a business opportunity will prove an interesting proposition. We have had some discussions so far, but we believe we have yet to find the right partners at this point in time.
-
‘Consolidation in the multiplex sector will happen when the real value of the business is captured’ : Cinemax India senior vice president business strategy Devang Sampat
Cinemax India Ltd entered into the multiplex business with a cluster approach, concentrating on Mumbai and the Maharashtra market. Running a cinema chain with 76 screens, it has a load of 40 screens in Mumbai and 18 across rest of Maharashtra.
The thrust now is to build a national footprint with focus on locations that would give it an advantage. The expansion plan is to have 300 screens over a period of three years.
Facing a slowdown, the immediate task is to add 60 screens in FY‘11 with an investment of Rs 1 billion. Cinemax will also push digital technology and expand its gaming zones.
Cinemax has plans to raise funds but is not in a hurry. Promoted by real estate developers, it has an asset bank and can leverage it to raise debt. The company has a debt of Rs 750 million and the debt to equity ratio is 1:2.
Cinemax is not keen on film distribution as it is a risky business. But it is readying to enter into film production and is waiting for the right script.
In an interview with Indiantelevision.com‘s Sibabrata Das and Ashish Mitra, Cinemax India senior vice president business strategy Devang Sampat says consolidation will take time as average occupancy needs to rise from 24 per cent to 32 per cent and profit margins improve.
Excerpts:
Cinemax had indicated earlier that it would expand its screens to 300 over a period of three years. Has the economic downturn affected the growth plans?
There is a slowdown for all multiplex operators as the mall developers are not pacing up. We will be taking our total number of screens to 100, from 74 in the year-ago period (earlier guidance was addition of 40 screens during the fiscal). We have closed down three screens in Faridabad as the mall wasn‘t taking off. But we are not revising our three-year target of 300 screens.
Are you scaling down your investments in the short run?
For the current fiscal, we are investing Rs 600 million. We will be adding 60 screens in FY‘10 and our investment requirement is Rs 1 billion.
Will you be raising funds for this?
We will take a call in December. We are not in a hurry and will raise money when we need it. With the promoters being real estate developers, we also have an asset bank which we can leverage.
Wouldn‘t you like to retire some of the high-cost debt?
We have a debt of Rs 750 million. The debt to equity ratio is 1:2. There is room to leverage and we are not facing any fund constraints.
Cinemax has concentrated its multiplexes in Mumbai and Maharashtra. Will the spread out now be more national?
Initially when we ventured into the business, we took a cluster approach in Mumbai. Now during the course of our expansion, the focus will be on going to good locations. In the multiplex business, location is king.
‘We will definitely get into film production. We are ready and are waiting for the right script. We feel this will complement our exhibition business‘
Will you look at acquisitions or you feel the industry is not ready yet for consolidation?
The industry has an average occupancy rate of 24 per cent. Unless this goes up to 32 per cent, the real numbers don‘t come up. The profit margins stay low. Consolidation will happen when the real value of the business is captured. Being real estate developers, the promoters decided to foray into multiplex as part of their retail business. The capital cost for Cinemax will, thus, be comparatively lower and the promoters have a better understanding of locations.
How could Cinemax achieve operational break-even during the quarter when film producers froze fresh Bollywood content to multiplexes?
This was primarily due to three reasons. Our presence is predominantly in Mumbai and Maharashtra. Secondly, there were some Marathi films that released during this period and they fared well at the box office. Thirdly, we own some properties, reducing the impact of the expenditure on lease rentals.We expect to clock Rs 2 billion this fiscal, up from Rs 1.54 billion a year ago.
But the first quarter turnover was weak?
We expect contributions to come from the new properties in the third and fourth quarters. The existing properties should give us a revenue of Rs 500 million in each quarter. Don‘t forget that the Khans (Salman, Shah Rukh and Aamir) will make their appearance from the third quarter onwards. As for profitability, we will maintain the same percentage as the last fiscal.
Do you see a change in the revenue mix in the near future?
We expect the Food & Beverage (F&B) segment to contribute 20-22 per cent in FY‘11, up from 18 per cent. Advertising income should go up from 8 per cent to 10 per cent. Currently, box-office collections account for 69 per cent of our total revenues and gaming zone and others six per cent.
Having entered into film distribution, is Cinemax also looking at venturing into production?
We will definitely get into film production. We are ready and are waiting for the right script. We feel this will complement our exhibition business.We distributed two films – Kismat Konnection and Singh Is Kinng. We managed to break even. But this is a risky business and we are not keen on it.
What are the digital steps Cinemax is taking?
Digital technology helps reduce piracy and enables 3D viewing. This will lead to an increase in the share of Hollywood movies released in India and, in turn, to higher ticket prices. We have introduced digital technology in 24 screens.We are also looking at augmenting our revenues from gaming. We have introduced gaming zones in six places and are planning to expand it to our other theatres.
Does Cinemax have plans to set up cinema theatres overseas?
We have no such plans.
-
‘Discovery identifies India as a growth market’ : Discovery Communications India SVP Rahul Johri
Discovery Communications India is readying for a major expansion to ride on India’s rapidly growing digital pay-TV environment. The roadmap includes the launch of three channels – Discovery Science, Discovery HD and Discovery Turbo.
The existing three channels – Discovery Channel, Animal Planet and Discovery Travel and Living – have built distinct brand propositions. And as the viewership pattern is shifting particularly in the non-fiction genre, Discovery hopes to capitalise.
In an interview with Indiantelevision.com’s Ashwin Pinto, Discovery Communications India senior vice president Rahul Johri talks about the company’s growth plans.
Excerpts:
Having got the government nod, when are you planning to launch the three new channels?
We are finalising the launch plans. Discovery Turbo will be India‘s first male lifestyle channel. Discovery Science will be dedicated to make science programming accessible, relevant and entertaining. Discovery HD, on the other hand, offers programming in 1080i with 5.1 surround sound, far superior to both NTSC and PAL. It lends itself perfectly to the type of rich and spectacular images that Discovery is renowned for.How are you going to tackle distribution?
We have planned to launch Discovery Science and Discovery Turbo on both analogue and digital platforms. Discovery HD will be launched on the digital platform.Do you see niche channels gain as the digital environment grows?
We currently have three distinct networks in India, each with immense brand equity. Digital platform, besides offering an enhanced viewing experience and an increased choice to viewers, demonstrates the real value of the brands and their unique propositions. Companies with strong bouquet of channels, be it mass or niche, will certainly stand to gain as the digital penetration goes up in India.Do you see the new channels broadening the audience base for infotainment?
Viewers today are looking for distinct and credible content. We are witnessing a dramatic shift in the viewing patterns in India, especially in the non-fiction genre where our channels dominate.Considering that 60 per cent of India‘s population is under 30 years of age, this trend should only get amplified in the coming years. Each of our channels, existing and planned, has a distinct brand proposition and will resonate with viewers, advertisers and affiliates alike.
There has been a lot of talk about how HD is changing the television viewing experience globally. But at the moment the infrastructure is not there to support this in India. How does this impact the launch plans for Discovery HD?
India is witnessing a substantial increase in the sale of HD-technology TV sets. With the growth of digital delivery platforms, HD would emerge as a premium offering.Besides, we like to be ahead of the curve, be it in our programme offerings or production technologies.
‘Viewers today are looking for distinct and credible content. We are witnessing a dramatic shift in the viewing patterns in India, especially in the non-fiction genre where our channels dominate‘In terms of revenue where does India stack up vis-a-vis other Asian markets like Singapore, Hong Kong and South Korea?
India has a considerable viewer and advertiser base and has been identified as a growth market for Discovery.Do you expect revenue growth this year given the economic downturn?
It is my belief that leaders in respective categories will be least affected. Going by the current environment, we would be able to achieve our targets.What are the challenges that Discovery and other players in the infotainment space face this year?
The challenge is to continuously refresh the programming to suit the viewers‘ changing demands. At the same time you have to maintain the brand‘s core propositions.Last year Animal Planet re-branded itself globally with a more adult-centric focus. How has this been reflected in India?
Animal Planet revealed its fresh brand identity last year. Its new show line-up reflects intense drama, rich humour, unexpected choices and wonders of the animal kingdom.In order to strengthen its prime time slots, the channel introduced two new programme bands. Masters Of The Jungle at 9 pm takes viewers to meet the most celebrated wildlife experts from around the world who have dedicated their lives to animals.
The Hunt at 8 pm presents nature‘s predators in their raw and merciless form every night. There has been a ratings increase.
Has the look and feel been changed to reflect the channel‘s aggression?
The new logo, communication and content allow viewers an immersive experience. Introducing new time bands, Masters of the Jungle, The Hunt and multiple new titles like Jockeys and Animal Gladiator; the channel today offers a close-up encounter with wildlife.What are the major programming properties coming up on the channel?
From this month, Animal Planet‘s new series, Stranger Among Bears, will reveal the isolated life of a teacher who has received national attention for his unique but controversial relationship with the black grizzly bears for last 20 years.We will launch a new series in the Master of the Jungle band – Into The Pride in which the host Dave Salmoni will land himself in the middle of a ride of lions with just a walking stick. In a remarkable story of the bond between man and animal, we will present a reunion between two young men and a 500 pound pet lion in A Lion called Christian.
Discovery Travel and Living has completed five years in India. What progress has it made in boosting lifestyle programming in the country and serving the SEC A+ demographic?
Discovery Travel and Living has emerged as the definitive lifestyle channel in India. Surpassing all lifestyle television benchmarks, it has continuously added new genres, bringing the finest experience to its discerning audience. Even this year, it added three new genres – music, dance and relationship.On the Indian programming front, it explored unique Indian lifestyle themes – wedding, travel, food, fashion and hotels. It recently premiered a new series with one of India‘s leading columnists and food writer Vir Sanghvi. And in the biggest of all shows, we will present a series on India‘s biggest superstar Shah Rukh Khan, where for the first time ever viewers will be taken into his private and exclusive world.
Has there been any change in strategy compared to previous years?
Our focus has been to expand the existing genres like food, travel, fashion and makeover while at the same time adding new genres like music, fitness and relationship. We strengthened our prime time offerings with two strong bands – What A Life at 9 pm and Turn It On at 10 pm. Our efforts to up the weekend offerings with Brunch on Sundays and day time properties like Chew at 1 pm presented good results.On the advertising front, are clients more cautious in terms of committing spends?
We value our advertisers and believe in long term associations. Just like in the past, we will continue to offer higher values to our advertisers.
On the advertising front, are clients more cautious in terms of committing spends?
We value our advertisers and believe in long term associations. Just like in the past, we will continue to offer higher values to our advertisers.Has there been any change in strategy compared to previous years?
Our focus has been to expand the existing genres like food, travel, fashion and makeover while at the same time adding new genres like music, fitness and relationship. We strengthened our prime time offerings with two strong bands – What A Life at 9 pm and Turn It On at 10 pm. Our efforts to up the weekend offerings with Brunch on Sundays and day time properties like Chew at 1 pm presented good results.On the advertising front, are clients more cautious in terms of committing spends?
We value our advertisers and believe in long term associations. Just like in the past, we will continue to offer higher values to our advertisers. -
Indiantelevision.com’s interview with You Telecom CEO EVS Chakravarthy
Citi Venture Capital International-owned You Telecom India has resized its investment plan amid the economic downturn.
The trimmed-down plan will mean a fresh investment of Rs 2.5 billion over two years, instead of Rs 4 billion as earmarked earlier.
Narrowing down the spread, the expansion plan will focus on depth and consolidation of the business in the cities where You Telecom runs operations.
The redrawn map will mean that You Telecom stays as a niche player in the market for at least two years, shunning away from a frenzy among many multi-system operators (MSOs) to land grab and build scale.
You Telecom is in talks to rope in Indian investors for Digital Outsourcing, its cable TV arm. Tulsi R Tanti and his family members, promoters of wind power company Suzlon Energy Ltd, hold 49 per cent stake in the company. You Telecom has 36 per cent stake while the balance is held by high net worth Indian individuals.
In an interview with Indiantelevision.com‘s Sibabrata Das, You Telecom CEO EVS Chakravarthy talks about how important it is for cable TV companies to work on their business models, stay away from reckless acquisitions, conserve capital and penetrate deeper into last mile services.
Excerpts:
Two MSOs are in the process of tapping the capital market. Do you think the cable TV sector has reached a stage of maturity for listing?
The two preliminary draft prospectus filings are the first in the cable TV sector of significance for raising money from the capital market. The outcome of these two IPOs will send strong signals for the future. Investors will watch carefully the pricing of the issues, the intrinsic value of the business it captures and the sustainability of it. Hathway Cable & Datacom and Den Networks need to do everything to make sure that the sector becomes attractive for current and future investors.How does this impact companies like yours?
We are not in a hurry to capitalise on the high valuations in the market today. We want to see if this is sustainable. We prefer to go to the market as a profitable company with a strong business model and management bandwidth. We want to time the IPO appropriately.Are you saying that Hathway and Den are in a hurry to raise money via the IPO route?
Both the MSOs expanded aggressively through acquisition of cable networks. They need further capital to fuel their growth.Will these two listings aid digitisation?
Consolidation will happen faster than digitisation. As a process of consolidation, I wouldn‘t be surprised if Hathway buys Den – or the other way round. Besides, more and more cable companies will get listed.Will the climate be favourable for foreign strategic investors like Comcast?
Foreign strategic players will still stay away because no single Indian cable TV company has built that scale. Post consolidations, they will show interest. For Comcast and others to come, it is 3-5 years away.‘Post listing of the two MSOs, consolidation will happen faster than digitisation. As a process of consolidation, I wouldn‘t be surprised if Hathway buys Den – or the other way round‘
Since the IPO is throwing open early exit options for private equity firms, won‘t they find the cable TV sector attractive?
Some of them came into the sector with the hope that the government-mandated Cas (conditional access system) will spread to other cities. That has not happened. Still the sector attracted further private equity investments as everybody saw an opportunity in the distribution business. New PE players will wait to see if the market price of the listed companies is sustainable. The calls that they will take now will be more informed due to the last two years of collective experience of the industry.You Telecom had plans to expand in the bull phase and had decided to invest Rs 4 billion over two years. What made you scale back your investment plans?
We have decided to pump in Rs 2.5 billion over the next two years to boost our cable TV and broadband business (the investments for cable TV are made through a subsidiary company, Digital Outsourcing). Our focus will be on depth and consolidation of the business in the cities where we run operations. We had earlier planned to expand into 15 new cities, including 10 for cable TV services. But in a capital scarce scenario, we will go to six more cities in the first phase. For cable service, we will be adding 2-3 cities to our existing operations in Mumbai, Bangalore and Vizag. After that, we will rework on our fund requirement.So you plan to stay as a niche player in the market for at least two years?
We have seen how some MSOs have been pursuing a high-growth subscriber universe by recklessly acquiring cable networks. Having a large universe can become a liability. The capital has dried up for them and there is no change in their business models. It is important to be consistent, strong, stable and profitable.We are looking at an optimum size of 4-5 million in the first phase, up from our current reach of two million. You can‘t just focus on the reach universe when there is just a 20 per cent revenue share (due to under-reporting). Our focus will be to penetrate deeper into last mile services.
But if government announces a policy for HITS (Headend-In-The-Sky), will you scale up?
When the regulation comes, we will be one of the applicants. We are ready as far as the rest of the infrastructure is concerned. We will partner with Cisco on technology; we already have an existing head-end infrastructure with them. We have also signed an MoU for the transponder. We plan to invest an additional amount of Rs 1.5 billion for HITS.Will Tulsi R Tanti and his family members (Suzlon promoters) commit investments for such expansions?
They currently hold 49 per cent stake in Digital Outsourcing and stand committed. We might also bring in other Indian investors.You Telecom acquired a majority stake in Scod18 Networking to have a cable TV presence in Mumbai. What are the expansion plans under this entity?
Scod18 has been a Mumbai-centric MSO. We will continue to be a significant player with a significant market share in Mumbai. We will expand in areas around Mumbai and in parts of Maharashtra along with them, if and when we get the right opportunities. Our focus will be on digitisation and other value-added services like on-demand and TV-commerce.And for Bangalore?
We acquired a 50 per cent stake in Digital Infotainment, a small-sized local cable network, and our investments in this venture so far has been Rs 500 million (out of a total investment of Rs 5.5 billion). We will expand in Bangalore and other areas in Karnataka through this joint venture.Will acquisition be the only growth route for you?
Yes, that is how we will grow. We are planning to offer stock in lieu of last mile acquisition. This is how Cisco grew from a $2 billion to a $22 billion company – by offering stock. Pragmatic cable companies, after all, have to start a trend. But for this listing is important.Having taken the position of a niche player, how important is it for you to launch premium products to drive in higher ARPUs (average revenue per user) as a strategy?
The market today is not matured for premium products. The content cost is exorbitant and pricing is a big issue. The MSO that could have monetised on value-added services is Hathway Cable & Datacom as it has a million digital subscribers. But as this has not been a focus area for them, there must be compelling reasons for this.What will the focus area for MSOs this year?
MSOs will have to make sure that they have enough capital with them. -
‘We plan to raise Rs 5 billion’ : Ravi Mansukhani – Indusind Media & Communications CEO and MD
Hinduja-owned IndusInd Media & Communications Ltd (IMCL) has survived the scare from a wave of new multi-system operators (MSOs) that threatened to land grab even in the lucrative market of Mumbai.
IMCL has expanded its footprint to 27 cities and thrived on a hefty carriage revenue that helped the MSO turn profitable. In FY‘09, carriage made up for almost 50 per cent of IMCL‘s turnover as broadcasters coughed out Rs 1.4 billion to place their channels on the network.
The media subsidiary company of Hinduja Ventures Ltd plans to list through an initial public offering (IPO). Ahead of that, it is in talks to rope in an investor. The total fund-raising agenda: Rs 5 billion.
Operating its cable TV distribution business under the Incablenet brand, IMCL has agreed to dilute one per cent stake to Ashley Investments at a valuation of $644 million. As part of this exercise, 0.22 per cent has been diluted.
The MSO has aggressive plans to grow in the digital environment. IMCL is also gearing up to grow its fledgling broadband business, after upping its primary connections to 200,000 that would give it access to the last mile.
In an interview with Indiantelevision.com‘s Sibabrata Das, Indusind Media & Communications CEO and MD Ravi Mansukhani talks about the MSO‘s growth plans.
Excerpts:
IMCL is planning to take the IPO route. How much are you going to raise?
We are out in the market, looking to raise money. We may get an investor before we possibly do the IPO. We feel this is the best route to take. But if there is no match on our valuations, we will go on our own. We plan to raise Rs 5 billion to fund acquisitions and our digital cable TV expansion. But we are not in a hurry. We want to list with the right fundamentals and the future for digitisation.Why are cable TV companies suddenly rushing to list?
DEN (Digital Entertainment Networks)a late entrant, is planning an IPO this year. There are media reports also about Hathway Cable & Datacom readying to tap the market. Wire & Wireless India Ltd (WWIL) is in the process of raising money through a rights issue. The fact is that cable TV companies are looking at expansion as they feel there is a huge potential left open. Unfortunately, DTH has not been able to fight analogue cable because of the pricing. And with digital cable growing slowly, DTH has not grown to everybody‘s expectations.But is it not true that all the DTH operators are mopping up subscribers very aggressively?
DTH is growing either in cable dark or bad cable areas. In urban India, they have made penetration in mostly multiple TV homes and, thus, co-existed with cable. A very small percentage has come at the expense of the cable TV operators, perhaps because the ARPUs (average revenue per user) are low.A wave of new MSOs have entered the market. How has this affected Incablenet?
In the urban areas, this led to ground warfare as the entrants wanted to grab territory. Subscription rates, undoubtedly, got affected as we had to retain our base. This was particularly felt in case of franchisee fees. But we held on – and are slowly getting back the old rates.We have actually grown in revenues as we expanded through acquisitions. We are present in 27 cities, up from 12 a couple of years back. We have laid more infrastructure and have over 6000 km of hybrid fibre network. We have posted a 45 per cent growth year-on-year over the last two years. We have also turned around and become profitable.
Wasn‘t this largely because of the steep growth in carriage fee which accounted for almost 50 per cent of IMCL‘s FY‘09 revenues?
Yes, the placement charges helped to a large extent for IMCL turning profitable. But we are no more stuck as just a cable MSO. Though video is the mainstay of our business, we have laid infrastructure and will now aggressively push for broadband.
‘This is a good time to make acquisitions as the cost per point has come down. In prime locations, valuations have fallen by a quarter and in other areas by almost 50%‘The company has been talking about broadband for the last few years but very little has happened. The revenue from broadband for FY‘09, in fact, was under Rs 50 million. So what changes this time?
The three bottlenecks that hindered our broadband growth are now behind us. Bandwidth costs have fallen. Secondly, we have merged the broadband company with the cable outfit, so that saves us from paying out any network charges. The third and the most important fact is that we have grown our primary points from 50,000 to 200,000 and, as we own the last mile here, we don‘t have to pay commissions to franchisee operators. We are targeting to double our revenues from broadband this year. We will also get into commercial clients as it will give us higher ARPUs. In the retail segment, our ARPU stands at Rs 400
Was there a conscious decision to acquire more of primary points?
When we went in for acquisitions, we ensured that we got into good ARPU areas. We also took care that we acquired 30 per cent of primary connections from the cable networks that we snapped up.
Were you driven to new geographies because of the carriage market and also because of a land grab situation from new competition?
The older MSOs like us expanded into new cities because of the promise of digitisation which would lead to transparency and ensure that we carve out a commission system for ourselves. The new MSOs came under the plank of carriage fees. Undoubtedly, placement charges helped all MSOs to survive and grow – including the digital business.
The economic slowdown is hurting broadcasters and they are pulling down their carriage costs. How is this going to affect IMCL‘s growth this year?
Carriage revenue will not dip but flatten for us this year. There are new channel launches but they are not of that scale as last year‘s. This will be a consolidation year for us.
How much is IMCL investing this year?
We had invested Rs 1 billion in FY‘09, equally split between acquisition, digitisation and laying of infrastructure. For this fiscal, we plan to invest a similar amount. We will add two digital headends to our existing eight. We will also supply digital feed to four more cities during the fiscal, in addition to the four that we have currently linked up.
We have so far seeded 350,000 digital set-top boxes (STBs) across eight cities. We haven‘t got fresh STBs this fiscal as the government has imposed duty on the import of boxes. But we have placed orders and expect supplies to arrive in November. Our target is to add 150,000-200,000 boxes during the fiscal. The Commonwealth Games in Delhi also could act as a big boost if the government comes out with a digitisation policy to coincide with that event.
Will you be aggressive on acquisitions this year?
We will continue to make acquisitions where we see an opportunity being thrown on us at the right value. This is a good time to buy as the cost per point has come down. In prime locations, valuations have fallen by a quarter and in other areas by almost 50 per cent. Operators need the support of bigger MSOs because of the huge subsidy in digital boxes. We will consolidate in states where we are already present.
And there will be more disturbance on the ground?
Warfare for territory will reduce as the new MSOs will not be that aggressive. Money is drying up and they are back in the market trying to raise funds.
Is there a drive to restructure the content business under associate company Planet E-Shop Holdings India Ltd?
The movie business is moving into Planet E-Shop. This is also housing the distribution of channels for retail and commercial. We are distributing ESPN in Mumbai and are in talks with two other major broadcasters. We have also taken up marketing and distribution of foreign channels like Arirang and Miracle Channel that seek downlinking in India. We are looking at signing up three more foreign channels this year.
Will the cable movie channel, CVO, move into this company?
The channel is part of IMCL and there are no plans as of now to shift this out. We may make it a pay channel down the road as the digital environment grows. We have bought 100 movies this year and are planning to add 300-400 more as prices have fallen. The revenues are getting squeezed for cable movie channels. But we have a library of 700 movies and later may create thematic channels for digital subscribers.
What plans do you have to grow the content side of the business?
We will create server-based local channels when the time is ripe. Cable news channels in metros may not be viable as it makes more sense to get placement fees than run your own channel in a choked analogue environment. The situation can be different in smaller towns. Our interest is to create these server-based local channels that do not depend on advertising but pay revenues.
Will the cable movie channel, CVO, move into this company?
The channel is part of IMCL and there are no plans as of now to shift this out. We may make it a pay channel down the road as the digital environment grows. We have bought 100 movies this year and are planning to add 300-400 more as prices have fallen. The revenues are getting squeezed for cable movie channels. But we have a library of 700 movies and later may create thematic channels for digital subscribers.What plans do you have to grow the content side of the business?
We will create server-based local channels when the time is ripe. Cable news channels in metros may not be viable as it makes more sense to get placement fees than run your own channel in a choked analogue environment. The situation can be different in smaller towns. Our interest is to create these server-based local channels that do not depend on advertising but pay revenues. -
‘Our top three international markets are the UK, Australia and India’ : Dixie Carter – TNA Entertainment president
In 2002, TNA Entertainment found a gap in the marketplace to compete with WWE. TNA Wrestling was born and is now seen in 120 countries globally.
TNA has carved out a separate positioning for itself. While WWE is entertainment, TNA is professional wrestling.
Spending the first five years of its existence on establishing the brand in the US, the focus has been to expand TNA‘s global reach. And India is TNA‘s one of the top three markets outside the US.
In order to complement its roster of events, ESPN Star Sports (ESS) signed a deal with TNA Wrestling a few years back to broadcast their programming. The sports broadcaster renewed its deal for TNA content last year.
In an interview with Indiantelevision.com‘s Ashwin Pinto, TNA Entertainment president Dixie Carter elaborates on the company‘s plans to up its game in India.
Excerpts:
When TNA Wrestling started out in 2002, what were the key goals?
In the late 1990s, World Championship Wrestling (WCW) and World Wrestling Federation (WWF) combined for approximate gross revenues of $800-$900 million per year. By the time TNA started in 2002, WWF had the only major international professional wrestling company in the world.So there was not only room, but a need for competition in the marketplace. Thus, our goal was to establish TNA as a premiere professional wrestling company worldwide.
To what extent have these goals been accomplished?
TNA just celebrated its seventh anniversary and we are now seen in more than 120 countries globally. For the last four years, we have had a tremendous relationship with our US cable TV partner Spike TV and we just signed a new three-year deal with them.During the second quarter of this year, more than 1.8 million viewers on an average tuned in to TNA: iMPACT! on Spike TV each week. Overall, TNA: iMPACT! saw a 31 per cent overall growth with double digit increases in the key demographics of M18-49 (+33 per cent) and P18-49 (+40 per cent). TNA now routinely exceeds those ratings of WWE‘s ECW brand and we are closing the gap with their Smackdown brand.
Additionally, we have grown our international business exponentially in the last two years. By developing relationships with broadcasters in the UK, Australia and with ESPN Star Sports (ESS), TNA has become a global entity.
We have also assembled a talent roster that can compete with any promotion out there. As far as challenges are concerned, I think that adequate capitalisation is the biggest challenge for any start up. We have had to be smart with our resources and prioritise them. The other main challenge was to convince people that we were going to be around for the long-term, and I think we‘ve done that.
At the time of launch on one hand you had the success of the WWE. On the other hand, you had the failure of Turner‘s WCW. What were the learnings from this?
We learned that the fan base will support two professional wrestling companies. Obviously, it is a sobering lesson when a company that generated the revenue and had the success that WCW had, could and would go out of business just a couple of years later. You have to learn from those mistakes made.How is TNA positioned vis-a-vis the WWE?
A couple of years ago, I read a transcript of a Vince McMahon (WWE chairman) interview where he said that WWE is entertainment and TNA is professional wrestling, and I couldn‘t agree more. We want to emphasise our athletes and their athletic ability, and we don‘t run from what we are.Could you talk about the strategy TNA is following to grow its reach globally?
TNA spent the first five years of its existence focussing on establishing the brand in the US. Once we felt that that we were on firm footing, we began to expand our reach. I think that the United Kingdom is a good case study for what we are trying to accomplish globally.First, we established a successful relationship with a top TV partner, and then built the brand through promotional appearances and then eventually live events and consumer products.
‘TNA needs to provide ESS with more content such as TNA Epics and regularly scheduled promotional appearances with TNA superstars in India‘How much of a challenge is it to grow fan loyalty for the brand given the competition from the WWE and an increasingly fragmented media environment?
In four years, we have doubled our average audience on Spike TV in the US and are beating our competitors programming in key countries worldwide. By that alone, we are the fastest growing wrestling company in the world.WWE is the gold standard in the professional wrestling business, but a lot of people have stopped watching wrestling. And as the upstart company, we have the opportunity to offer something different.
In how many homes is TNA seen globally and what new television deals were signed recently?
TNA is seen in over 120 countries around the world with many millions of viewers tuning in each week. We recently signed new deals with Foxtel in Australia, Canal 9 in Denmark and W9 in France.Where does India fit in the scheme of things for TNA?
India offers a tremendous opportunity for TNA. From a consumer index standpoint, if India continues its recent financial growth it will become the fifth largest consumer economy by 2025 and we want to be a part of that.Aside from television licensing revenues, we have to activate our strategy for live events and other commercial opportunities.
What are the different shows that TNA offers and has this been increased over the past year?
TNA‘s flagship show is the weekly two hour series TNA iMPACT! In addition, we produce 12 monthly three hour pay-per-views per year. TNA Xplosion is a one-hour edited version of iMPACT! airing outside the United States with some exclusive content added. We also recently launched a one-hour show in a ‘best of‘ format called TNA Epics. This show highlights the best matches, moments and superstars in TNA history.In the ratings sweepstakes TNA is behind the WWE in India. What is the game plan to close this gap?
TNA needs to provide ESS with more content such as TNA Epics and regularly scheduled promotional appearances with TNA superstars in India. We currently are on a one week delay in terms of the content broadcasted in India versus the United States.We hope to close that gap and have our programmes airing within the same week. And obviously, planning live events in India is a major piece of our strategy.
We are planning a promotional tour in India in conjunction with ESS. TNA superstars haven‘t visited since 2005, so we are long overdue to return. We are also creating customised station IDs and bumper breaks.
In terms of revenues what growth do you see this year? How much of it comes from outside the US?
We are looking for a 10 per cent growth this year. This year, approximately 15 per cent of our revenue will come from international markets. Our top three markets are the UK, Australia and India.Is new media playing a more important role in TNA‘s brand building strategy?
TNA was an early adopter of YouTube, and subsequently we are now one of their most all-time viewed channels with close to 200 million views. We continue to strive to stay on the cutting edge of new media and social networking technologies such as Twitter, Facebook, MySpace and whatever forms of communication can best help TNA reach out to its fans.We also reward our die-hard fans with opportunities available exclusively online and not to the general public. For instance, if you follow TNA on Twitter, at live events we hide a backstage pass in the venue and then reveal its location exclusively on our Twitter account. The fan who finds it gets to go backstage during the show.
What plans does TNA have in the licensing and merchandising space?
We have learned to be patient and selective in choosing our licensing partners. Aligning with great companies is what will create successful licensing programmes, create great products for our fans and bring TNA the most revenue.Jakks Pacific is our new worldwide master toy licensee and we will launch our first action figures and play sets together starting in summer 2010. We are very excited about adding this to our licensing and merchandising mix. TNA has been out of the toy category for two years and our fans have been asking for these products. For this reason, we expect great success when we launch our toys next year.
We released our first video game in September 2008 with Midway Games which to-date has sold close to 1.5 million units. We are currently evaluating our options for our next video game partner due to the Warner acquisition of Midway and expect to make an announcement soon.
For our trading cards and sports memorabilia our partner is Tristar. In particular our trading cards have been a great success. We‘ve just launched our third series to retail this month.
Internally, we create our own merchandise across several categories and sell it directly to our fans at live events and via shoptna.com. We specifically focus on designing and creating our own apparel. We also handle the creation of our replica belts, and specialty collectible merchandise like the Sting bats, Superstar programs and collectible TNA books.
TNA has stars like Kevin Nash, Jeff Jarett who have wrestled for years in other organisations. Does this familiarity make it easier for fans to connect with the TNA brand?
TNA tries to strike a balance between recognisable names from other companies and our own homegrown talent. We‘ve found that the combination of both seasoned veterans and the next great superstars of tomorrow elevates our entire brand.
Have fans‘ attitudes towards sports entertainment changed over this decade as per research?
There is an old saying — “for those who believe, no explanation is necessary; and for those who don‘t believe, no explanation is possible.” The mission for TNA in 2009 and beyond is to attract more people who believe that professional wrestling is a great form of entertainment, and that TNA is their preferred brand of professional wrestling.When WCW closed down, there was worry that wrestlers and fans would not have an alternative apart from the WWE. To what extent has TNA managed to emerge as a healthy option?
After seven years we have emerged as the only healthy option for both talent and fans alike. Since TNA started, several people have tried and failed to develop an alternative or competition to WWE and TNA.One challenge is to cultivate new talent. What is TNA‘s strategy in this regard?
Since we don‘t currently have a developmental territory, we have to keep a close eye on the best unsigned talent around the world.Recently, we signed Ayako Hamada from Japan and Sarah Stock from Mexico, both female talents who are going to do great things for our Knockouts division. We are actively looking for Indian talent as well.
Hamada from Japan and Sarah Stock from Mexico, both female talents who are going to do great things for our Knockouts division. We are actively looking for Indian talent as well.
When WCW closed down, there was worry that wrestlers and fans would not have an alternative apart from the WWE. To what extent has TNA managed to emerge as a healthy option?
After seven years we have emerged as the only healthy option for both talent and fans alike. Since TNA started, several people have tried and failed to develop an alternative or competition to WWE and TNA.One challenge is to cultivate new talent. What is TNA‘s strategy in this regard?
Since we don‘t currently have a developmental territory, we have to keep a close eye on the best unsigned talent around the world.Recently, we signed Ayako Hamada from Japan and Sarah Stock from Mexico, both female talents who are going to do great things for our Knockouts division. We are actively looking for Indian talent as well.
-
‘Global animation studios will set up shop in India for captive backend facilities’ : Ronald D’Mello – Maya MD and CEO
Two years back, Maya Entertainment Ltd. was in trouble with two of its business verticals in the red. What followed was a restructuring and the education vertical since then has seen exponential growth to post over Rs 1 billion in FY‘09.
The studio business has also grown and Maya is in the midst of releasing its first animated movie, Ramayana The Epic.
Promoted by Bollywood filmmaker Ketan Mehta, the company went through an ownership change. Enam Securities holds 45 per cent stake, Bhukhanwala Holdings 20 per cent and Intel Capital, with three rounds of funding, around 12 per cent.
The company faces new challenges as it scales up and plans to raise funds.
In an interview with Indiantelevision.com, Maya MD and CEO Ronald D‘Mello, who is preparing for a new innings, reflects on how the company managed to turn around in the last two years.
Excerpts:
When you took over as CEO of Maya Entertainment Ltd, there was a need to restructure the company. What are the measures you took?
There were substantial corporate hygiene issues which threatened the very structural stability of Maya as a company. In November 2007, we engineered a major restructuring exercise in our education vertical, risking almost half of our business, to eliminate conflict of interest positions of some of the key executives and employees of Maya, the group which went on to form a competing business. Thankfully, the exercise not only resulted in a clean and transparent Maya but also laid a strong foundation for substantial growth.On the studio side, the challenge was both on business development and internal operational disciplines which we were able to overcome.
Did this mean that the key management of the education business changed?
We terminated 13 educational franchise centres in north India which collectively contributed to 50 per cent of our turnover. The result was extremely satisfying. We were able to grow the education vertical billings by over 300 per cent over the last two years to make it an over Rs 1 billion activity in billing in FY‘09. In terms of number of franchise centres, we grew from 38 ( at the end of the restructuring exercise in 2007 ) to 70 by June 2009.We consolidated our position in animation education to become the largest player in career-oriented animation education. We created an Advisory Board comprising the stalwarts of animation industry to build a constant interaction between industry and academia so that the courses we offer are suited to industry needs. We converted the outlook of our courses from software to creativity- focussed. We also created a product ( MAAC Junior Toon Club ) for young students in the age group 7 to 14 as a creative enrichment platform to integrate with art and craft curriculum of schools across India. Association with IGNOU for degree program in animation and VFX was also a feather in our cap during this period.
And on the studio front?
We went on to have the most productive year in FY‘09 where the total output between international service work, own IP and domestic service work was amongst the largest in Indian animation studios.When you joined two years back, animation was on a high-growth curve. Did that help Maya ride the tide in any way?
All industries go through highs and lows. Challenge is to get the best out of it when the industry is on a growth curve and to pro-actively future proof your business for industry lows. We did have the benefit of industry highs as much as everyone else in the segment did. But our growth probably outperformed industry and competition.are the challenges the Indian animation industry faces today as the global economy is in the midst of a downturn?
I would rather not get too influenced by the downturn in global economy as it is the ‘uncontrollable” factor all are faced with. In isolation, I see Indian animation industry far slower than the hype it has created for itself. If we believe the global animation and VFX consumption numbers at over $60 billion, what India has managed to get in terms of service outsourcing is abysmally low even if you assume content production constitutes 10 per cent of the global animation consumption pie. Also, the demographics of India population indicate a good future for more youth friendly animation, gaming and VFX content.Unfortunately, most of the early entrants in Indian animation production space lack a long term strategy to sustain market penetration and growth over a longer period of time. Even the development of talent has suffered due to this short term approach. If you see the IT sector and how it grew over the years, you will find sustained long term stay over decades by some of the dominant players to make India the hub of IT services and create a large industry today.
‘Indian animation studios may not be in the position of strength, both creatively or in market reach, to be up on the value and risk chain on co-productions‘Several companies have ventured into animated movies for the domestic market as a scale up strategy. But most of them have flopped at the box office. How do you think this is going to impact the business?
This is what I meant by short term approach. If anyone thought of producing an animation movie thinking it would be a huge success, it is a wrong base to start with. Animation movies, like any other movies, are not free from the risks familiar to film producers. Moreover, you have the task of playing in an unestablished segment of viewership. I am afraid it would take few more movies to fail and learnings from those taken, before we see the domestic industry evolving in animation. Till someone takes that risk and has a sustained agenda to create this segment, it would be hard to imagine the domestic industry to mature.In a period of hype, even Disney entered into a joint venture with Yash Raj Films for an animated movie Roadside Romeo when one thought they didn‘t require a local partner to aid them in what they are best at. Since the movie bombed, this may discourage international companies making animated movies for the Indian market. Are we entering a different phase of the business cycle?
I don‘t think any international studio considers failures as end of the road. I am sure Disney and Yash Raj Films have drawn considerable learnings from their first attempt which will only help them to make it better next time, both in terms of content creation and market exploration.Is getting into co-production arrangements for international movies and TV series a more viable business model?
It all depends where you place yourself in the value and risk chain. If you are the last man standing in the chain, no international co-production can change the game for you. I am afraid, Indian studios may not be in the position of strength, both creatively or in market reach, as of now to be up on the value and risk chain on co-productions. Hence, it may be a while before it happens to its spoken potential.What are the steps you took at Maya to prepare the company for producing an animated movie?
Ramayana The Epic, Maya‘s first animated film, was already in its baby steps when I joined. We decided to provide a development budget to the director and team so that the idea can be taken to a script, few key character designed and a three-minute sample fully animated and composed sequence developed. At the end of this exercise, we were fully convinced that the team can deliver an astounding product and decided to move on.What is the budget for Ramayana and how have you de-risked the project?
We would have loved to have some co-producer coming in through its production phase. But the overall economic slowdown and Indian film ( specifically animation films ) sector dampness did not help us. The film is now complete and being shown to potential distributors.How much does Maya depend on outsourced projects? How does it scale up its studio business?
Maya is predominantly a service studio, barring the first IP we produced over the last year. I cannot really comment on the future strategy for the studio scale up as it would be now left for Maya board to drive the company.Are there too many animation companies fighting for too small a pie?
The pie is big, but someone needs to take a really long term view of the potential and have sustained existence to bear the desired fruit. Meanwhile, I see international animation producers and studios setting shops in India for captive backend facilities which will open new avenues for talent.How tough is it for the small-sized animation companies to raise capital and survive?
Raising capital is dependent on the industry perception, company fundamentals and overall investment market climate. I presume in the present scenario it would be difficult for an animation production player to raise funds as none of the above three are in favour. Education industry will attract investor interest for businesses which have good fundamentals and clear future focus.Is Maya planning to raise funds? How much, how and for what?
Yes, we have been on it since last year. But I can‘t give you more details.You are quitting Maya at a time when it has still to grow. What do You think is the future of such companies?
I suppose I cannot comment on this. I am sure Maya will be able to attract the next anchor and drive the business forward.You are quitting Maya at a time when it has still to grow. What do You think is the future of such companies?
I suppose I cannot comment on this. I am sure Maya will be able to attract the next anchor and drive the business forward.How tough is it for the small-sized animation companies to raise capital and survive?
Raising capital is dependent on the industry perception, company fundamentals and overall investment market climate. I presume in the present scenario it would be difficult for an animation production player to raise funds as none of the above three are in favour. Education industry will attract investor interest for businesses which have good fundamentals and clear future focus.Is Maya planning to raise funds? How much, how and for what?
Yes, we have been on it since last year. But I can‘t give you more details.You are quitting Maya at a time when it has still to grow. What do You think is the future of such companies?
I suppose I cannot comment on this. I am sure Maya will be able to attract the next anchor and drive the business forward. -
‘We have been profitable for the second year in succession’ Manoj Badale – Rajasthan Royals chairman and co-owner
It has been a mixed bag for the Indian Premier League (IPL) franchise Rajasthan Royals over the last couple of years. Having come out on top in the first year, the franchise failed to reach the semi-finals after the venue for the second edition shifted to South Africa.
However, Rajasthan Royals made a profit for the second year in a row. It also got Shilpa Shetty and UK-based Raj Kundra to take 12 per cent stake in it for $16.8 million (Rs 820 million), valuing the franchise at around $140 million (Rs 6.83 billion), more than double the $67 million that the owners, Emerging Media, paid for it a little over a year ago.
Rajasthan Royals has been aiming to create a differentiated brand with focus on innovation, youth, the team ethos and the ‘win from anywhere’ mantra.
While priority is to play better cricket, the off-field focus is to reach out to its local and international fan base. Building a sustainable merchandising programme is also on the agenda.
In an interview with Indiantelevision.com’s Ashwin Pinto, Rajasthan Royals chairman and co-owner Manoj Badale denies that he has picked up a majority in the franchise and talks about its growth plans.
Excerpts:
There have been reports that you have picked up a majority stake in Rajasthan Royals. Is this true?
All these reports are inaccurate. There has been no change in the shareholding structure. We are fortunate to have investors based in the UK, India and Australia. This gives us a global perspective on the decisions we take as a company.
Do you think the IPL in South Africa helped in exposing the brand globally?
The move was a great opportunity for us as well as the IPL to expand the global audience and win a lot of new fans outside of India. We learnt a great deal about the international potential of ‘Brand Rajasthan Royals’. We successfully experimented with our merchandise and the ‘Royal Turban’ and the ‘Royal Mooch’ (moustache) became synonymous with Rajasthan Royals and its fans at all the games.
Was it a logistic nightmare to shift base to a foreign land?
The move to South Africa gave us as well as the organisers only about three weeks to put together everything from scratch. But the vast majority of the work was undertaken by the IPL and IMG teams. Our work for the Rajasthan Royals was far less than theirs, although our initiatives in creating practice matches against the 2008 South African champions added to a busy workload.
The main challenges related to travel, merchandise and local marketing. We overcame these by working with local partners, and leveraging our sponsors wherever possible.
Is it true that Rajasthan Royals made a Rs 250 million profit?
We do not like to provide specific comments on our financials. However, we are happy to have been profitable for the second year in succession.
Rajasthan Royals had earlier stated that its goal was to breakeven in three years. Are you on track to better this?
Yes, we are! But we can’t rest on past performance.
‘I am not sure that any country can replicate the IPL. Matching the IPL is not a realistic one. There are too many things that are unique to India that make the IPL the success that it has become‘What activities are you planning to keep the brand alive?
We have already reached out to the UK. We played in front of 22,000 fans at Lord’s against the 2008 English 20:20 champions Middlesex. We are exploring other alliances and strategic partnerships in different geographies across the world.
In India we do fan ‘meets’ and ‘greets’ as a regular exercise throughout the year. We also sponsor the Jaipur based T20 local league called the Royals Cup. The plan is to scale these into bigger events with more participation from sponsors and fans.
Do you have any licensing and merchandising plans for this year or are you waiting for next year?
Yes, we have many. We believe that licensing and merchandising is the most unexploited area for the team, and our focus is to continue to explore strong partnerships in this regard. We hope to create a long term and sustainable merchandising programme around the team.
Our licensing and merchandising programme continues to grow and Shilpa’s presence is a huge benefit – with lots of great new ideas.
What are the key elements one needs to keep in mind when designing this?
It is important to pick a few categories that have potential in a developing market such as India. The temptation is always to do multiple deals. But we need to look for strategic partnerships with products and brands that share our brand values.
It is also important to execute well, once we have identified our focus areas. My hope is that we will see exciting partnerships in the areas of retail, apparel and gaming this year.
Shilpa Shetty and Raj Kundra have taken a 12 per cent equity stake in Rajasthan Royals. Will this help?
Through this investment, we feel that we got dual benefits at the price of one. Raj contributes business acumen and is a great addition to our board. With Shilpa’s international status and media experience, we are gaining a real advocate for our team and enhancing RR’s global brand.
It clearly expands the off-field options available to us. Overall our strategy will always be to prioritise the cricket. But off the field, we will expand our activities to reach out to our local and international fan base.
Is it true that deals can’t solely rest on the on-field performance but also on the brand attributes?
We think that our brand values are extremely differentiated. We focus on innovation, youth, the team ethos, and the ‘win from anywhere’ mantra.
This is ‘Brand Rajasthan Royals’. Our sponsors and merchandising partners have a lot to gain with that type of association. The brand needs to be built holistically and not just around on-field; it should also represent what its stands for, off-field.
How is Rajasthan Royals perceived as a brand?
What people tell me is that we are the IPL’s most loved team. This is due to our brand of cricket, our team ethos, and our emphasis on youth. People like the underdogs, which seems to be a label that we are yet to shake. I think that we are also seen as a very internationally mobile franchise.
In-stadium hospitality will be an important revenue source going forward. Has Rajasthan Royals firmed up plans in this area?
We are constantly testing, and iterating our plans. There is lots of ‘best practice’ across the world from events across all sports.
However, the right in-stadium experience has to be customised for the IPL, which has its own unique characteristics – the brevity of the match, the relatively short period of time that fans are in-stadia (but not watching the game); and the mix of demographics in different parts of the stadia. As is the case for much of our business, there is no single ‘silver bullet.’
How successful has the Rajasthan Royals been thus far in exploiting new media?It is too early to talk about success, but we are pleased with our innovation and activity levels – the e-commerce platform works well. Our work on Facebook and Twitter has yielded positive results. Our mobile communities are also excellent.What are the plans to take the reality show Cricket Star to another level this year?We’re talking to Indian and international production houses. Our ambitions with Cricket Star remain big and we are enthusiastically pursuing various broadcasting platforms.While the objective of this show is to harness the power of raw talent concerns, have been expressed that budding cricketers will focus more on T20 as it is more lucrative and give short shrift to the other two formats. What is your take on this?The objective is simply to unearth new cricketers. The economic reality of focussing on T20 is a choice that individuals need to make. Personally, I think that Test cricket still has a healthy future, if managed properly by the administrators.What other entertainment-based sports formats is Emerging Media looking at?Currently we are focussing on popular sports like cricket and soccer as we believe the market is still some time away from justifying early stage investment in other sports. We are looking at a soccer-based TV show. We will be able to share more details on this later. However, prospects for golf and tennis are promising.The English Cricket board scrapped plans for P20. How difficult will it be for the other countries to do a league that is as financially successful as the IPL?
I am not sure that any country can replicate the IPL – nor do I think they should be trying to. Each country has to look at what is best for its fan base, what parts can be exported to India, and what parts can be borrowed from other tournaments.
Moreover, it is important to have realistic objectives – and matching the IPL is not a realistic one. There are too many things that are unique to India that make the IPL the success that it has become.
Emerging Media and the other IPL franchisee owners are looking to register their trademark in different countries to protect their IPR. What is your strategy in this regard?
This is part of the framework for our IP protection. If we, as part of the IPL, have global ambitions, then we need to protect our identity, even before we reach out to foreign markets.
All teams and the IPL are globally recognised brands. We are just ensuring that we’re legally protected as well.