ITV

Category: Specials

  • 2009 a dynamic year for Indian cable industry – By ACT Television MD Sunder Raju

    2009 a dynamic year for Indian cable industry – By ACT Television MD Sunder Raju

    The year 2009 has been a dynamic one for the Indian cable industry. Several developments and key decisions that took place hint towards a very promising 2010 for the industry as a whole and, of course, the consumer. Continuing its boom, the cable industry is all set to ensure that the TV is not an ‘idiot box‘ anymore!

    Problems faced by Southern operators

    Cable business is spreading its wings all over India. In urban Karnataka and Madhya Pradesh, it has also undergone a massive change in the last couple of years as the industry, from being extremely fragmented earlier, has now become more systematic and corporatised. With a growing market share in these states, digital cable is becoming a larger chunk of the pie and is on its way to give DTH a run for its money.

    However, there are still some pertinent challenges that lie in the path, especially for Southern operators. One of the challenges faced by them is that vis-?-vis digital, DTH has a larger geographical presence. Despite DTH being much more expensive than cable, it has higher penetration because digital runs through a cable network, and that limits any player‘s footprint to the area already cabled by them.

    Also, though the cable industry has changed massively, it is still fragmented. Hence, any operator going national needs to accommodate a number of industry-specific issues, such as adjusting to rapid technological change, working and accommodating with different workforce demographics, changing and restructuring the entire face of the organisation.

    Another challenge lies in the fact that since a large part of the cable industry is still unorganised, the corporate players within the industry at times face content related challenges. Large corporate players, as a policy, do not relay illegal films unlike the small players that telecast all kinds of content in order to get a higher viewership.

    Also there is an oversupply of service providers in the Indian market, with various small players present everywhere. This is also because starting an analogue business requires small investments. In addition to this, with growing inflation, there is less advertising to support the services. Domestic regulations limit advertising to just 10 minutes per hour.

    Last but not the least, with DTH penetrating in every corner of the country, analogue service providers are now facing a major roadblock where profitability is concerned. Consolidation is the way of the future and will bail them out.

    An eventful 2009

    Cable industry has seen a major shift in the last couple of years when more and more organised players have entered the market. This shift in the industry has not only improved customers‘ TV viewing experience with better picture quality, consistent network and improved content on local channels, but it has also drastically improved the quality of overall customer service. For example, ACT Television not only offers a call centre service but also offers instant personalized customer service through its professionally trained cable operators.

    In my opinion, a very important development of 2009 that will make 2010 a smooth year for corporate players is that legal action would be initiated against small cable television operators showing unauthorized and prohibited programmes including obscene films. Moreover, if the programmes televised by the channel create resentment among a particular community, the affected persons can also lodge their complaint with the district administration.

    Towards the end of 2009, HITS (Headend-in-the-Sky) was approved. HITS will allow use of satellites to distribute cable signals instead of the traditional cables that operators use. This is similar to the DTH system – the only difference being that in this case, cable operators will download signals for further distribution in homes.

    As far as the HITS policy is concerned, while the government has taken a major step in addressing the challenges of digitising the country‘s television homes, the work is only half done. They also have to set a timetable for the pay channels to go exclusively digital. Without this step all that has been done is a policy statement without teeth in the area of encouraging enforcement. Ideally both announcements should have come together but a quick decision soon on compulsory digitalisation for pay channels will ensure that the advantage of digital would be experienced by the customer.

    Parts of India have recently been exposed to the Internet Protocol Television (IPTV) services. Companies offering IPTV are mostly conducting pilots in bigger cities of India, such as Delhi, Mumbai, Bangalore.

    A promising 2010

    With 111 million Television Homes and 85 million C&S Homes, India is bound to see many changes in the coming year and years ahead. Indian cable TV industry has a huge potential and that is being recognized by people.

    More and more customers are demanding better picture quality, more channels and better customer service – all at affordable prices. Hence, digitalisation is inevitable and seems to be the only way forward for analog service Providers. Also the need of the hour is clearly training and a reminder that “the customer is King.”

    Also, cable TV offers many other benefits such as city specific channels, that provide complete city related information throughout the day to viewers. This gives viewers a pulse on the city and keeps them updated on events and happenings in their immediate surroundings. Often something that impacts life in the city is covered first by the local city channels and they are surely becoming indispensible.

    Not only this, cable TV has become a great platform for providing, entertainment, information and also education. This is rapidly changing the TV viewing habits in our country which has close to 51 million urban households and 60 million rural households.

    Strategic partnerships with various content houses will determine how any service provider progresses. This will also put an end in the near future to broadcast of pirated content.

    Building a robust subscription income, digitising rapidly and developing broadband as a revenue stream seems to be the business model all the leading multi-system operators (MSOs) are going to chase after having spread their tentacles across the country. Apart from this ‘Value Added Services‘ are a definite means to generating revenues. Services like education on TV, web browsing, gaming and ticket booking have a huge potential in the Indian market.
     

  • Happy News Year – By Times TV Group MD & CEO Sunil Lulla

    Happy News Year – By Times TV Group MD & CEO Sunil Lulla

    Good Morning and a Happy News Year. I am happy to report The News from the front lines of the news battleground. Returning after a sabbatical, it gives one a fresh perspective into what went by and what to, perhaps, expect next.

    2009 had begun on the back of the most alarming news event of the decade: the terror attacks of Mumbai.

    2009 also witnessed the biggest news event of 2009, the General Elections and an accidental death of a Chief Minister, which was widely covered.

    Not much changed in the stack up of the news channels – the #1s continued their reign respectively, Aaj Tak, Times Now and CNBC. New channels came into the offing. Some changed ownership. Regional News was the hero of the year, clocking most significant viewership…

    If I take this route ahead with this news bulletin, it would be so conventional. While I have been asked to comment on the year, which went by and what to expect in the coming year, I thought I would rather report what my candid conversation with folks connected with TV News broadcasting reveals. Turning this rewind-forward commentary, to views gathered from experts (names withheld on request) over a few candid conversations.

    1. Profitability
    Business leaders in the domain believe the big challenge is profitability. Of the listed news entities, only one network has stayed ahead, going by its public reports. Others have taken a hit! Perhaps due to the challenging financial conditions of the last two years and/or due to the increase in costs structures.

    See it any way, profitability of the TV news industry is under significant strain. This may be bad news for investment but it is also a big opportunity for businesses to spruce up their act. With over 200 news channels across all languages and genres, certainly a challenging act. A prominent investment banker believes the next two years provide opportunity for consolidation, projects some of the news networks may dither off the horizon and those focused around profitability are most likely to succeed.

    Profitability for news is not a bad term. It is essential, as firms which do not make the cut, eventually vanish and so does the editorial associated with it. Hence for the “freedom of the press” to exist, being profitable is even more essential.

    There are 4 underlying fundamentals to profitability

    Market Positioning: Each news Network has a position in the minds of its viewers. News is not vanilla. Most viewers have a choice and a repertoire and a set of channels they almost never visit. News networks need to invest in growing their position. With the wide range and choice that exists in the market place, positions can be adopted by way of brand offering and editorial experience. This is what leaders of news networks need to apply themselves to.

    Ad Revenues: The gap in revenues amongst the top 3 of top 5 is decreasing and growth of the leaders is not as significant in historical periods. Yet the category as such is not saturated. The leaders need to pick the pace. Set the standard. Up the price and ante and not crowd to the median price point.

    One of the challenges the industry faces is to learn to sell audiences and not just market shares. The quantity and quality of audiences. Not just Tam audiences, but the homes the news network reaches. This change in strategy and market-based positioning can be the sleigh on which the next Christmas fortune may be written.

    Subscription Revenues: Some of the news networks have been successful in turning “Pay”. For some the earning – learning has been lower than market potential. But strong brands can move ahead and begin to grow their revenue curve by focussing on subscription revenues.

    The worry of viewership shares is driving the channels to commit for larger ground paid connectivity. But true strong brands will find its loyal viewers ask for them. One cannot be indifferent and say news is news..that‘s why the pecking order has stayed largely stable. There are ” News Brands” and they have a demand, for which they can charge. Brands are language agnostic.

    Cost Structures: It‘s not about the quantum of costs but about the nature of the cost structure. Is this sustainable in the medium turn for businesses to be profitable? Is there potential to find cost arbitrage in the nature of news gathering and ground connectivity amongst news channels? Can local channels work co-share resources or reportage or news blocks, so prominent in the mature US markets, as an example. Each News Network has an astute understanding of what works for itself and what is rarely used, arbitrage that. Rationalize to build essential cost structures and not unsustainable ones. As an illustrative example, Is it really necessary to be in international markets, if say a channel is losing money? Is that sustainable?

    2. Editorialisation, Not Sensationalism
    The editorial independence of TV news networks continues to grow with balanced strength, Aligned to its viewers needs and to provide objectivity in news reporting. The term sensationalism is sometimes used to describe the dramatic visualisation of a story. It is not a replacement for the quality of editorialisation which continues to grow. Who will determine what is what? The editorial flow of news is committed to providing the news in a simplistic, objective manner. It must use the metaphor to create the necessary visual drama for its viewers to understand.

    News is no more simple. There are multiple views, all of which are right. There are various hierarchies: the government, justice, social justice, the lobbyist, the consumers rights, the editorial right et al. All need to be balanced and put together in a manner which is cohesive and does not tempt the remote button to be pushed.

    We acknowledge there are temptations and those may exceed the boundaries. But then social networking, blogging, independent reports etc keep flexing these boundaries and new ones get created. India has been largely balanced, informative, educative and in many recent a time, bought to the table excesses, be it of state or individual. The very same which accuse of sensationalism are those which cause it. Strange isn‘t it? When it does not suit you, the media is no more your friend?

    The media, my dear was never your friend. It is as unbiased “as a potato”, what you do with it, will give you the taste you want. News is all pervasive and has bought to society a new spectrum of information.

    3. Corridor of Collaboration
    In recent times, with the advent of the News Broadcasters Association (NBA) and other cooperation measures introduced by many news networks, the industry is getting better equipped to collaborate and compete. Those who embrace this approach are likely to see better fortunes for themselves. Transparency in collaborations creates for better understanding, deters suspicion and makes for a stronger market place. Be this by way of sharing of local news with national channels or the other way around. Or news blocks on networks, co-branded or branded otherwise.

    The practice of sharing the local advertising time, via local avail, has already begun and seems to a market gainer for all. There is more to be done, as not all news networks are members of the NBA. The corridor of togetherness will drive new practices, forge collaborations and result in better profitability. As an illustrative example, connectivity costs, news gathering and sharing, best practices in terms of disciplines, new technical alliances, taxation and import policies.

    So what is the news forecast for 2010? All is well. Yet nothing much may change and there may be more bitter rather than sweet moments, unless the industry takes rapid and conscious charge of the above. I am very optimistic of the industry and so were the experts I spoke with – from editors to business leaders, to media experts, to consumers…

    The news is important and everyone wants to be in it. So hang in and make the TV news industry hang in too.

  • 2009: Television media can certainly say “Aal Izz Well”By Zeel chief revenue officer Joy Chakraborthy

    2009: Television media can certainly say “Aal Izz Well”By Zeel chief revenue officer Joy Chakraborthy

    In view of the global economic meltdown and its imminent impact on the advertising, 2009 was bound to be a challenging and tumultuous year. But, even as we entered into a rather gloomy 2009, there seemed to be a glimmer of hope that India would manage to insulate itself, at least in part, from the global downswing. And guess what?

    Our 1.1 billion-plus population, which until now has always been perceived as the hindering factor to growth, came to our rescue wherein the consumption of basic amenities of “ROTI, KAPADA & MAKAAN” ensured that organic growth across sectors is not stifled. Top this up with our undying quest for “KUSHI” (or constant up-gradation of our standard of living) which during the 2nd half of the year spurred the growth rates back onto the high single-digit figures.

    In the first half of the year, the fear of an impending downturn led to cost-rationalisation initiatives . . . especially in the sphere of marketing budgets. This resulted in marketers intensely re-evaluating their ad-spends. With focus on sustaining consumption of their products (which was coming from every nook & corner of India), marketers re-visited their basics of reach and frequency.

    Also, marketers adopted a stingy spending strategy. With splurging on high-value flashy media initiatives becoming a luxury that no one could indulge in, it was imperative to gain market shares in a declining market. The FMCG sector increased their ad investment by nearly 30 per cent, but on cost-effective options that yielded them better returns on media investments. This helped them grow their sales by six per cent.

    So, one of the most important positives to have emerged from 2009 is that marketers have realized the true potential of television in terms of reach and cost-efficiencies. With FMCG leading the way and viewing TV more optimistically than print, other sectors such as auto and telecom followed suit.

    So, let’s see how Television has evolved during last year:

    The emergence of Colors not only transformed the Hindi GEC space into a “3-player” genre but, more importantly, provided viewers with varied & diverse content and advertisers with multiple options to reach out to their consumers. This facilitated the genre to grow both in terms of viewership and ad revenue.

    Given the multiplicity of options and lower switching costs coupled with the marketers’ imperative of cost rationalization and reach maximization, “purple” GRPs became their key buying parameter. Broadcasters who quickly took advantage and managed to get their content propositions right reaped the highest benefits.

    Towards this end, while most networks busied themselves in attracting higher GRPs (to become No. 1) by initiating extravagant programmes with high-value celebrities and airing movies, Zee, on the other hand, focused on developing relevant and strong properties which helped us become leaders in “prime time”.

    So, the key to TV sales evolved around developing relevant, cost effective but plain vanilla sales propositions with high service quotient. As such, with our sales approach to optimally monetize these “purple” GRPs, we garnered highest revenue.

    Moreover, with marketers demanding “localization”, regional channels gained acceptance and emerged as key drivers of growth. Our host of regional channels capitalized on this through complementary media propositions to our advertisers.

    A key TV sales imperative emerging from the cost-conscious marketer was the need to leverage “network strength” across genres / markets as compared to offering a proposition based on merely one or two channels. The wider the range of the network’s bouquet, the better the ability to provide a comprehensive package to the marketer and thereby garner maximum share of client spends.

    Despite all the above sales approaches, the two factors which, to my mind, truly provided the only competitive advantage in this hyper-competitive environment are “people” and “relationships”. Broadcasters who stayed away from rampant “right-sizing” initiatives have benefited not only because of highly energized sales but also, more importantly, as it gave them more “feet on the street” whose relationships with clients and agencies could now be leveraged.

    In summation, Indian media (in general) and the television media (specifically) can certainly say “Aal Izz Well” and look forward for another enthralling year of high competitiveness.

  • Challenger channels are emerging in South India – By Star India president (South) Jagdish Kumar

    Challenger channels are emerging in South India – By Star India president (South) Jagdish Kumar

    2009 began ominously with dark clouds looming in the aftermath of the meltdown of financial markets in the US. In the midst of this turbulence, Star India was on the verge of concluding a very significant and strategic deal in its history – the acquisition of Asianet channels in South India.

    Having worked on the deal negotiations and complicated regulatory processes for over a year, it was frustrating to hear many doomsday prophets questioning the rationale for making large investments in an under developed media market when businesses across the world were experiencing a severe liquidity crunch. Conventional wisdom said corporate USA will conserve cash and any new investment proposal will either be deferred or cancelled.

    However defying conventional wisdom, we just got the deal done! Star India‘s long term commitment to the media market in India was reinforced when on 9 January 2009 Star network‘s footprint expanded to cover all of South India with the acquisition of channels in Malayalam, Kannada and Telugu. This step from Star truly represents the adage: when the going gets tough, the tough get going! There was never a doubt in any of our minds that the value we derived from acquiring Asianet far out-weighed the price we paid for it.

    Hence while most media companies in India started 2009 with either downscaling/terminating of operations or approaching the market with hesitation and extreme caution, Star started the year with renewed vigour and hope. With its expanded footprint over non-Hindi regional language markets, Star is currently the biggest television network in India with access to 130 million viewers.

    South India is home to 45 per cent of the cable & satellite homes in India. The region is witnessing tremendous economic progress with per capita incomes far higher than the national average. For various reasons, Star had been guilty of ignoring the South Indian market with the exception of Tamil Nadu where its Tamil language channel Vijay TV has been delighting Tamil viewers with innovative content. The network of channels in Star‘s current portfolio consists of a mix of businesses at varying positions in each of the markets:

    In Malayalam, Asianet is the leading channel

    In Tamil, Star Vijay is a challenger channel with its own distinctive brand

    In Kannada, Suvarna is fighting a close battle with the leading channels

    In Telugu, Sitara is still taking baby steps.

    What have we learnt from 2009?

    When one looks back at the year gone by, there are 5 themes which strike out:

    1. South India is not one market; it consists of numerous distinct markets:
    Each of the language markets in Kannada, Malayalam, Tamil and Telugu have distinctive characteristics which sets them apart from each other significantly. Even within the main language markets, there are internal differences which cannot be ignored by television broadcasters.

    Karnataka is a good example to illustrate the multi-faceted features of the market. Besides Kannada language speakers, Karnataka is also home to people who speak Coorgi, Tulu and Konkani. Each of these languages is spoken by people who are proud of their own long history and culture. Furthermore parts of Karnataka in northern, eastern and southern borders of the state have a large populace who are influenced by Marathi, Telugu and Tamil respectively. The capital city Bengaluru has developed into a microcosm of India with people from all over the nation making it their home. Kannada language speakers are a minority in Bangalore.

    Television broadcasters have to factor in the diversity of the market in all their programming and marketing decisions. It is perilous to consider the market as homogenous.

    2. Content needs constant innovation with a blend of tradition and contemporariness:
    The significant earning and consuming populace of the region (25 years and above) are people who grew up in the traditional and conservative environment of the 1980s and 1990s. At the same time they are also modern and contemporary in their attitudes which come along with the economic prosperity the region is experiencing. Television viewers who are entertained by religious/mythological content are also equally captivated by a talk show which is anchored by a transgender host.

    Television broadcasters have to master the art of being a jack of all trades and master of none.

    3. It‘s distribution, distribution and distribution:
    South Indian states have always had the highest penetration of cable & satellite homes in India. With increasing importance of the tier 2 and tier 3 towns, distribution presents immense challenges.

    Each of the regional markets in the South have numerous competing local channels which are backed by political interest and local businessmen. This has created a huge demand and supply mis-match for analogue cable bandwidth. While the distribution market is trending towards consolidation, it is still characterized by territory wars between the major multi-system operators (MSOs). Local cable operators (LCOs) are offered television signals either free or with huge discounts. Such predatory pricing by competing MSOs results in blockage of subscription revenues at the LCO level. In order to compensate for lack of subscription revenues, MSOs are forced to charge exorbitant prices for carriage and placement.

    Television broadcasters face huge challenges in getting distribution. The pay TV market is fraught with risks associated with poor cash collections.

    4. Today’s leader could be tomorrow’s challenger:
    For a long period of time, each of the markets had a dominant leader and a there was a huge distance between the leader and second ranked channels. The Sun network channels dominate the markets in Tamil Nadu, Andhra Pradesh and Karnataka and the Kerala market is dominated by Asianet.

    With the proliferation of channels in each of the markets, the gap between the leader and the challengers is decreasing. With the exception of Tamil Nadu where Sun TV continues to maintain a massive lead over the next best channel, the other markets are witnessing healthy competition in the leadership stakes. Incumbent leading channels in non-Tamil markets are experiencing viewer fatigue with long running fiction serials and audiences are willing to experiment with fresh concepts.

    Television broadcasters have to plan “disruption” in programming and scheduling in order to make inroads into the market. The audience is ready for the next big idea.

    5. Movies can make or break channels:
    South India has a prolific movie industry. 70 per cent of the annual production of approximately 1000 movies in India is produced in South Indian languages. Movies constitute more than 50 per cent of the GRPs of most of the channels. All major networks in South India have created entry barriers by acquiring movie libraries on a long term basis.

    Movies are an essential weapon in a broadcaster’s armoury. Movies are extensively used to attract audiences; thwart competition; promote programming and boost ratings.

    Crystal gazing into 2010

    2010 promises to be an exciting year for the Star network in South India. We are looking forward to strengthening our presence in South India. The challenges in 2010 for television channels in South India will be the following:

    1. Diversified distribution due to the increased penetration of digital boxes (cable and DTH):
    Increasing penetration of digital boxes by DTH players led by Sun Direct will provide numerous opportunities for television channels to reach their audiences. This will open avenues for content providers to monetize niche content. Competition from DTH players is also driving cable networks to install digital boxes to cable subscribers. The surge in addressability by the penetration of cable and DTH digital boxes augurs well for television channels.

    2. Shorter lifecycle of programs and increasing churn of audiences:
    Television audiences are becoming increasingly impatient and the days of long running serials are coming to an end. The market is waiting to see freshness and innovation in content. Television channels have to constantly look to renew their offerings.

    3. MSOs will start consolidating and reduction of territory wars in cable:
    MSOs are entering a period where their equity masters (private and public) are pursuing positive cash flows. Hence the era of easy money availability for network acquisition/operations will come to an end. This implies that MSOs will have to consolidate and entrench themselves deeper into their own territories rather than encroach on other MSOs‘ territories.

    4. Talent wars:
    Good talent in all aspects of the television business will be scarce. Finding and retaining talent will make the difference between leaders and challengers.

  • 2010 will be known as the year of radio -By ENIL CEO Prashant Panday

    2010 will be known as the year of radio -By ENIL CEO Prashant Panday

    The way the world changed in the first decade of the 21st century can be gauged by the year-end covers of two prominent magazines. Time Magazine (Dec 7th issue) called this decade the “Decade from Hell”. In contrast, Business Today‘s cover (Dec 27th issue) called this decade “India‘s best decade.” Clearly, the center of gravity of the world of business has shifted towards the East!

    While Indian industry battled the slowdown of 2009 rather bravely, and the Indian economy still grew at over 7 per cent, the advertising industry wasn‘t that lucky. As the downturn hit the ad industry, the bean counters took over and the focus of CEOs shifted towards management of bottom lines.

    The first item to be cut was obviously the advertising line. Most media companies – who rely heavily on advertising for revenues – saw revenue drops of between 5 and 25 per cent in the first nine months of 2009. While the last quarter of the year looks better, the overall growth in 2009 is still expected to end negative.

    There were more companies recording revenue de-growths than those recording positive growths. For every one Colors coming in and grabbing new revenues, there was a Star Plus and Zee that lost revenues heavily. The sum total: negative growth. Borrowing the terminology of business news channels, the “market width” was negative!

    The few media companies that recorded positive growths in revenues did so on the back of inorganic growth (some parts of the business did not exist last year). Or they were in the early part of their growth cycle (hence last year‘s comparative revenue base was small). In other words, the quarters were incomparable.

    Different media sectors exhibit different growth rates to “maturity” (time taken to grow to a reasonable size). My observation is that radio companies typically take three years to hit maturity – i.e. to max out on ad volumes. After this, revenue growth happens only on the back of pricing increases.

    In the case of newspaper editions, I am told this can extend for up to 10 years. Many Hindi publications (Hindustan for eg) have grown aggressively in recent years on the back of an increase in editions, and these editions obviously represent “inorganic” growths.

    In the case of TV, it‘s more complicated. With unhindered competition, it is difficult to say how much time a channel takes to maturity. A successful channel like Colors appears to be hitting mature levels of GRPs, ad volumes and revenues in record quick time. Another channel like NDTV Imagine still appears some distance away from that. The revenue growth of Colors should be seen as inorganic growth.

    In 2009, almost all “mature” companies experienced air-pockets in their path, and saw revenues tank. The notable exception? Sun TV of course! This one behemoth – much like China – continues to grow with scant regard for the problems the rest are facing!

    How did media companies react to this slowdown? In the most obvious way. Cutting costs. Payroll, marketing, programming, G&A, travel….even electricity were all cut to barebones levels. Headcounts were cut. Incentives were cut. Product companies cut back drastically on R&D (Consumers should expect to see a deficit of innovative products in 2-3 years time). Most media companies also took salary cuts. In the end analysis, anything that could be cut was cut. Today, media companies are structured like they should have been in the first place. Fit and ready to run the marathon!

    So the key question is: Is the worst behind us? Most would respond by saying: Yes. But is the worst really behind us? My strong suspicion is that we have now recovered from last year‘s levels, but are still a few months away from a real recovery. Real turnaround could be delayed till August-September of 2010 (next season). Most media companies are recording growths on year-on-year basis post November 2009 (low base effect of 2008). But how many are recording growths compared to two years back? Very few. Reversing this 2-year decline will take time and I see that happening only by August-September 2010. The pain will continue longer!

    The key challenge for the media going forward in 2010 is managing ad pricing. Pricing has taken a huge hit in 2009. Average media pricing is down by about 25 per cent as advertisers asserted themselves on the back of negative sentiments. To be fair, most advertisers have had big savings in 2009. Media companies have co-operated wholeheartedly as the businesses of their clients got hit.

    As client businesses revive, our hope is that inventory pricing will climb back to at least 2008 levels, if not higher. Now the media companies are looking for an appropriate quid pro quo!

    The second challenge is managing the bottom line as the markets recover – and as costs start to surge. One of the key costs to be cut in 2009 was payroll cost. Now with the media markets opening up, there is a huge pent-up pressure on payrolls that needs to be released slowly. Companies will have to be careful in rewarding key people – while still keeping overall payroll budgets in check. Likewise, programming and marketing costs will tend to surge. Not to mention travel and the G&A.

    Keeping a focus on costs will have to continue for at least another full year if not longer. A connected challenge is one of holding on to key people. As the market booms, there is always a willing “buyer” of managerial and creative talent!

    To be sure, 2010 will be a better year than 2009. There is no doubt about that. At least in terms of profitability. Hopefully, media companies will go back to putting some of that profitability back into what is required for long-term growth: Brand building, programming, training…I also expect that there will be a large number of M&A deals in 2010 and beyond.

    The crippling impact that 2009 had on the weaker players could put many of them on the block. With the stock markets willing to bet again on the more profitable media companies, there should be a large number of deals fructifying. In the TV space, hopefully, some of these acquisitions will lead to an extinguishing of the channel! There‘s just too much unworthy stuff still being broadcast!

    I am quite sure that 2010 will be known as the year of radio. Phase III policy of radio reforms is around the corner. Hat‘s off to the Ministry of I&B for betting big on radio! If they announce the policy quickly, the auctions of as many as 800 channels in 300 new towns could well be completed in 2010 itself.

    And by 2011, the radio industry could start offering a serious alternative to regional print publications. With much economic activity expected in the smaller markets in the next decade, the potential for radio to become a far bigger medium is very tangible.

    But before the government thinks of growth, it has to address the “survival” question first. It‘s a known fact that the radio industry is bleeding from multiple cuts – and this has been going on right from its inception in 2000. With more than Rs 20 billion invested in just Phase II in One Time Entry Fees and capex, and more than Rs 5 billion of accumulated losses incurred in the last three years, there is no way the industry can survive. Unless the government chips in with support yet again.

    The radio industry has requested for the licence period to be extended from 10 years to 15 (if not 20). This would give them some time to get some returns on their capital. The other bugbear, of course, is music royalties.

    In most of the Phase III towns, there is simply no viability till the time that music royalties can become reasonable. In most developed radio markets, radio broadcasters pay up to 4 per cent of their revenues as music royalties. This is when more than 90 per cent of the population listens to radio every week. In India, we are requesting for the same – but scaled down to reflect the percentage of listenership that radio has at present. When radio listenership becomes 90 per cent in India, we are willing to pay 4 per cent then. This is a good time for the music industry to aid in the growth policies of the government. Can they accept this global benchmark for at least the new Phase III stations?

    If the radio industry survives (government extends licence period) and if music royalties are sorted out, it‘s possible that in the next few years, radio will become 8 per cent of the ad industry. It‘s my view that as soon as the government completes Phase III, it has the opportunity to immediately announce Phase IV. It should draw its attention back to the bigger towns and increase the number of channels to at least 25.

    If Colombo and Singapore can have 25 channels, why can‘t Mumbai and Delhi? There are, of course, the usual spectrum problems. The government needs to clean out the current “squatters” on the FM band. And demand more accountability from AIR – either they launch more channels of their own, or they make it available to the private sector. After all, air waves are public property – let there be good use of the same.

    If this happens, and if a multitude of programming formats becomes available, radio listenership will grow fast. And with that the share of radio could rise to upwards of 10 per cent of the total ad industry. Of course, there will be a lot more investment needed to be made – but if there is viability and a semblance of profitability, then the radio industry will not be found lacking!

    All in all, I expect the tide to change soon. I expect a lot more radio to become available in 2010 and then, again, going forward. The next five years could well be the most glorious years for radio – a great future….if, of course, it survives the present!
     

  • 2009: Top 10 Executives

    2009: Top 10 Executives

    2009. A year when most of the television industry gasped as the Indian economy slowed down and advertising and distribution revenues dried up even as costs went up. Executives burnt the midnight oil grappling with the downturn. Most of them deserve a salute for coping with the tough times. But there were some who came out triumphant and did wonders for the companies they lead. Indiantelevision.com takes a look at those who made the cut in our 2009‘s Top 10 Executives listing.

    Our list is by no means comprehensive, but these gents and ladies clearly stood above the rest. The executives have not been listed in order of importance or achievement, and sure there are many more who made a difference. We raise a toast to them.

    In the meanwhile take a dekko at our Top 10 Executives of 2009.

    Rajesh Kamat & Ashvini Yardi

    Rajesh Kamat did what was considered nigh impossible in 2009. Under his leadership, Colors, one of the late entrants in the general entertainment television sweepstakes, toppled both the leader Star Plus and the second placed Zee TV from their perches. He did not stop at that. With the help of clever engaging and disruptive programming from his programming head Ashvini Yardi, he maintained that top slot for the rest of the year.

    And Kamat achieved that in just a matter of 13 months – a feat which could well enter the Guinness Book of World Records.

    For long, rivals Sony and Zee had taken a shot at the top spot, but Star Plus appeared to be unshakeable. Kamat and his band of merry programmers however made it look fairly easy with a mix of differentiated, disruptive programming and distribution (Kamat‘s 3 Ds) on the back of savvy marketing. As the year was ending, he had actually got his company close to profitability with revenues of close to Rs 6.5 billion.

    Kamat‘s success has to be juxtaposed against what happened to other players who dared to challenge the leader: new entrants 9X (launched by former Star CEO Peter Mukerjea) and Real took a beating and almost wound up. The other player NDTV Imagine ended up at the No 5 spot, and finally found a new owner in Turner.

    During his days at Star Kamat had seen the channel rise from obscurity to leader. And he had gained amazing consumer insights during his earlier stint at Coke. He brought all of that bear in his uphill battle against the leaders. He gambled with a young enthusiastic team and the gamble paid off.

    Today, he is the most sought after TV executive in the country. And he was rewarded with additionally responsibility just as the year ended: he was given additional charge of strategy, legal distribution and finance of the Viacom 18 group bringing the channels MTV and Nickelodeon under his charge.

    2009 also saw him take an extremely calculated risk. Nine months from launch, he took the channel pay putting it as part of the One Alliance bouquet, distributed by MSM Discovery. The timing would not have been better as IPL gave the channel a good mileage. Later he got Amitabh Bachchan to don the hat of Pop Philosopher for Bigg Boss and now Big B is taking the channel to US and UK as brand ambassador. Additionally, he got his son Abishekh to host Bingo, a popular international format. At the time of writing, Bingo has done it once again for Kamat: the show has generated higher ratings than other game shows.

    A large part of that credit goes to Yardi who has been the creative driving force behind Colors. A woman with a vision to create a channel so unique and distinguished from anything ever viewed by India, she has always given priority to innovation and creativity. Her focus on fresher concepts and disruptive programming is what elevated Colors to its leadership position so quickly.

    From the word go, Yardi stressed that the shows on her channels have to have “meaningful entertainment”. The characters are not in black or white but have different shades. Yardi strongly believes that Colors offers ‘something for everyone‘ and ‘everything for some‘.

    Known for incorporating audience insights in her search for the perfect television shows, be it fiction, reality, game show or any other format, Ashvini has been responsible for making entertainment bigger than ever and effectively changed the way Indians viewed television.

    2009 saw shows with hard hitting messages such as Na Aana Is Des Laado and Uttaran climbing to the top positions on the charts while the Colors flagship show, Balika Vadhu, continued to reign over peoples‘ hearts and minds. And as far as reality shows go, 2009 was the year for the biggest ever changes in the reality television scene. With Fear Factor getting a lot more exciting and the Big B Amitabh Bachchan himself hosting the third season of Bigg Boss, reality in India touched new heights in 2009.

    Genius clearly does not go unnoticed, and in Ashvini‘s case, her talent has been recognized from time to time by peers and various industry institutions. She has been the recipient of many an honour, amongst them being the Media Personality of the Year title at India Today Woman‘s Summit, apart from being hailed as one of the top 50 powerful people of 2009 in India by Business Week.

    Perhaps defining Ashvini in one word may not be easy, but trendsetter comes rather close. And now, she is at it again, conquering newer peaks, bringing in fresher ideas and ready to set some new trends in 2010.

    Uday Shankar

    While most media observers and trade writers in India tend to think that Star India CEO Uday Shankar missed the mark in 2009 because of the toppling of Star Plus from its leadership perch, the word overseas and in corporate circles is that he did an excellent job and continues to do so; that the Murdochs are pleased as punch with him.

    During the year, the former journalist continued the network‘s spread into regional language markets and even managed to get leadership status in one of them. He kept a sharp eye on profitability in difficult economic times, returning pleasing figures for the network.

    Viewed from a different perspective he staved off an aggressive attempt from No 3 Zee TV to usurp his GEC flagship channel Star Plus from its No 2 spot, even though he conceded the leadership position to rival Colors. He gambled with risqué programming during the year, something which got him a rap on the knuckles from the government, but also got reams of media coverage and some praise for pushing the envelope with shows like Aap Ki Kacheri.

    And as the year ended, he was gearing up to do battle and regain Star Plus‘ numero uno status: he had restructured the Hindi GEC, bringing in whiz kid Gaurav Banerjee to look after the channel. Star Plus GM Keertan Adhyanthya was moved out to head Star Movies and Star World. He had also put wunderkinder Sameer Rao in charge of Star Utsav and Star Gold.

    With Rupert Murdoch‘s News Corp restructuring its broadcast business in Asia, Uday Shankar got his pat on the back when he was delegated with many more tasks during 2009. He was handed over the responsibilities of managing the sales and distribution offices of Star in West Asia, Britain and the US, besides growing the Indian market and being under the direct mentoring of James Murdoch, the group‘s head of Asian and European operations.

    Uday also gets to look at the movie business with Fox Star Studios India CEO Vijay Singh. The grandiose plans are to distribute 18 movies a year and be involved in production. Avatar has become the biggest Hollywood hit in India, grossing over Rs 1 billion.The biggest catch in the distribution net is Shah Rukh Khan‘s My Name is Khan, set for release in February.

    His big win for 2009 was the runaway success of Star Jalsha in just its first year of existence as a Bengali general entertainment channel. It created waves in east India with its programming which gelled with audiences. Then he drove his team to come up with new programming at Vijay TV and Star Pravah – initiatives which are bound to start bearing fruit over the next few months.

    If there was one area which looked a little worrisome for Uday Shankar during 2009 it was the loss of the leadership position of Star Plus, its flagship channel in the Hindi entertainment space. Star Plus conceded it near nine-year monopoly to newbie Colors mid way through 2009. But that did not deter him as he continued to focus on re-jigging the programming and on the bottomline. The network also courted controversy thanks to its dare bare all on TV show Sach Ka Samna adapted from The Moment of Truth.

    Meanwhile, keeping pace with rival MTV, Shankar also saw Channel [V] re-furbish its content with a host of new shows under his leadership as the channel shifted gears to 60 per cent music and 40 per cent reality show content.

    He has his work cut out for him in 2010, but knowing Shankar he well might deliver. Yet once again.

    Sameer Manchanda

    He could well be labeled the cable cowboy of India. He has aspirations – like his esteemed US counterpart John Malone who agglomerated cable systems all over the US into one national network – to transform the fragmented Indian cable industry and create a giant Indian cable TV network.

    And to that end he took his company DEN Networks public this year raising Rs 3.64 billion through an initial public offering. The market cap of DEN today is Rs 24.72 billion.

    It looked tough seeing it through, but he finally cobbled together investors who helped in the oversubscription of the issue.

    The man being referred to is Sameer Manchanda, chairman and promoter of DEN Networks Ltd and the joint managing director of IBN18 Broadcast Limited.

    Manchanda is a feisty fighter. He spent many years with NDTV when he broke away to set up IBN18 Broadcast, along with Rajdeep Sardesai and Raghav Bahl in 2005. Channels such as CNN-IBN, IBN7, and IBN Lokmat, followed. All three channels have become a news force to reckon with and Manchanda was appointed as the president of the News Broadcasters‘ Association.

    A fellow of the Institute of Chartered Accountants of India, he has always been credited with stitching lucrative deals for the company. He founded DEN in 2007 and he was quick to seize the opportunity in cable TV. He prepared the base for expansion by getting distrib veterans Anuj Gandhi and SN Sharma on board and then went about building the network in the North.

    He first expended DEN in Delhi and Uttar Pradesh, the two lucrative carriage revenue markets for cable networks from broadcasters. DEN also gobbled up Amogh Broadband Services, a leading MSO promoted by former Karnataka chief minister D Kumaraswamy‘s family. It is also a major force in Haryana and Rajasthan.

    In 2009 DEN paced up in Gujarat and made a breakthrough in Mumbai by entering into a joint venture with Ravi Singh‘s cable network in Ghatkopar, a suburb in central Mumbai.

    Manchanda can be credited with the success of DEN‘s IPO in 2009, but the challenges are lying ahead. The biggest of them all: to spread digitisation across the network, launch broadband services, and make market corrections.

    Punit Goenka
    “I would not like to be in his shoes as expectations of him are very high because he is my son, but he has shaped up well,” these are the words Subhash Chandra spoke about Punit Goenka recently. The son has now come of age and all indications are that he is likely to take over the reins of the entertainment conglomerate his father, the chairman of Zee TV, built.

    According to insiders, Punit‘s management initiatives and style have impressed Chandra greatly and he is looking at hanging up his corporate boots in a couple of years and focus on his social responsibilities.

    Punit was hoicked into the MD‘s role at Zee Entertainment Enterprises Ltd (Zeel), giving him total operational responsibility for the Zee Network which includes a Top 3 Hindi GEC, Zee TV, and a clutch of popular channels including Zee Cinema. And he did leave his stamp. First, he yanked the six regional general entertainment channels (R-GECs) from ZNL into the Zeel fold. Then he merged the ETC Networks channels (ETC Music and ETC Punjabi) into the company he heads. He hived off the education business, and started playing an active role in the news business by becoming a non-executive director of Zee News Ltd.

    The year also saw him buying out Ten Sports from Taj Television after some hard nosed negotiation, even as his father‘s loss making T-20 format – the Indian Cricket League – ran out of steam following a backlash from the Indian cricket board and IPL Commissioner Lalit Modi.

    His major successful play was on the Hindi GEC front. Zee TV was under attack from a hungry for leadership Colors and an extremely defensive leader Star Plus. Goenka took a decision not to splurge to buy GRPs. While the other two forked out top dollar on big movies and big ticket celebrity driven reality and formatted shows, he along with his team of Nitin Vaidya (COO -national channels and Zee TV business head) and programming head (Ajay Balwankar, now in Sony Entertainment television), focused on traditional soaps and low cost formats. Pavitra Rishta, Agle Janam Mohe Bitiya Hi Kijo, Chhotti Bahu, Dance India Dance (an adaptation of Bangla dance reality show Dance bangle Dance) were his ripostes which helped the channel generate GRPs. So much so that it took up the No 1 spot in week 34 with 281 GRPs. Zee TV began the year with 190 GRPs.

    Though No 2 or No 3 today in terms of GRPs, the channel today is No 1 in terms of monetizable GRPs, a statement with which even the top bosses at Star Plus and Colors will concur.

    His staff acknowledges the fact that Punit is very easily accessible and always encourages new ideas. With that kind of zeal, it is no wonder that his father thinks Zeel is in good hands.

    Kalanithi Maran
    Kalanithi Maran proved yet again how he could cruise along in a year of global economic storm while the other media barons were scaling back their expansion plans. Far from groaning under financial woes, he searched for new growth.

    And the architect of the Sun TV empire found them in the areas of DTH, TV broadcasting and FM radio.

    Sun Direct is the fastest growing DTH company with a subscriber base of 5 million. Built on mass pricing, the business model is to grab market share while waiting for opportunities to lift ARPUs (average revenue per user) that stayed below Rs 100 in 2009.

    Critics say Sun Direct is leaning heavily on subscribers from the four southern states and predatory pricing can‘t be sustainable. But certain facts stay formidable in Maran‘s favour. His DTH company has the lowest losses on a per subscriber ratio, possibly because of hard bargaining to stay away from minimum guarantee deals with broadcasters.

    Also, Sun Direct has 80 per cent of its customers from the south, a rock-solid base that would provide him economies of scale as he starts scratching into the other markets where he doesn‘t have a distinct advantage.

    In the TV broadcasting arena, as the industry reeled under an advertising slump, Maran posted a robust revenue growth of 35 per cent. He fortified his position and launched two kids and a comedy channel during the course of the year, blocking out possible gaps in the marketplace.

    A master strategist, Maran believes that viewer tastes change every 3-4 years. He introduced a big-ticket weekend non-fiction programming based on the international format show Deal or No Deal that not only gave him viewership but also revenue spikes. The show ran across Maran‘s flagship general entertainment channels: Sun TV (Tamil), Gemini (Telugu), Surya (Malayalam) and Udaya (Kannada).

    Sun has emerged as one of the leading FM radio broadcasters, setting up a pan India presence. In 2009, Sun brought its FM radio stations outside Tamil Nadu and Pondicherry under the Red FM umbrella, offering advertisers a wider listener base and an opportunity to capitalise on a unifying programme format across key cities.

    Since the summer of 2009, Maran also corrected a single deficiency in his rapidly-growing media empire: He widened the talent pool, making a series of senior appointments including Ajay Vidyasagar as CEO and Ravi Menon as programming head.

    So what does the roadmap look like for Sun in 2010? Maran is tapping subscription revenues more aggressively, has floated a UK subsidiary to accelerate international revenues, hiked advertising rates after a gap of two years, and is readying the release of the mega-budget movie Enthiran. Looks like another blockbuster year for the man who rules the southern media landscape.

    Man Jit Singh

    His is a radical turnaround story. When he took charge of Multi Screen Media Ltd (the company that runs Sony Entertainment Television), Man Jit Singh had several tasks to handle. CEO Kunal Dasgupta had left suddenly in the first quarter of 2009, his flagship channel Sony was doddering around in the doldrums with sinking ratings, morale was low and the organisation had few clues as to how they could deal with the rapidly changing dynamics of the GEC business. Newcomer NDTV Imagine had beaten it to the No 4 slot, a far cry from its heydays when Sony was scrapping for the No. 1 slot in the early part of this decade.

    As interim CEO, Singh took the bit in his teeth, lopped off 50 staff, letting go off channel head Albert Almeida. He initially focused on seeing through a successful IPL as the network had invested for its channel Max while acquiring the rights for the cricket extravaganza. In the reworked deal, BCCI sold the nine-year rights for Rs 82 billion, parceling out the India

    That out of the way, he began the hunt for someone who would take up the corner office as CEO, apart from launching a new prime time programming band along with COO NP Singh and programming head Gurdeep Bhangoo The search for a CEO proved futile as did the new lot of programmes. He aborted both – hoisting himself into the CEO‘s seat and started scouting for a channel head. He found one in Ajit Thakur

    The programming was rejigged and a low cost idea plumped for: telecast reruns of its long running award-winning and successful thriller and horror fictional shows, CID and Aahat. In the meantime, a new programming head was appointed: Ajay Bhalwankar was brought in from Zee TV.

    In no time at all, the ratings shot up and Sony had got back into the reckoning, toppling NDTV Imagine from the No 4 slot. From 70 gross rating points Sony was clocking 170-190 GRPs, ahead of Imagine and close enough to possibly play catch up with Zee TV and Star Plus which were generating between 240-270 GRPs. The channel garnered almost two and half times more ratings within six months of the revamp.

    Along with his team, Singh sewed an exclusive content agreement with leading film production house YRF for a programming block which would help differentiate it from the regular fare. While the initiative generated a lot of hype, it did not generate the mass TRPs that were expected.

    For Singh, 2010 will be a crucial year with IPL 3 on it way in the next two months. Also, a rejuvenated and cash loaded NDTV Imagine (following the Turner deal) is definitely going to make a serious and concerted effort to reclaim its fourth place in the Hind general entertainment space.

    Steve Marcopoto
    2009 was Turner‘s fifteenth anniversary of operating in India. And 2009 was the year when the network clearly signaled that it was no longer satisfied in having a minor league play in India. In the first part of the year, it announced that it was launching WB Channel expanding its presence in the English entertainment channel space. In the second half of the year, Turner announced that it was pitching its tent in the rough Hindi general entertainment channel space. And leading Turner‘s charge into the big stake game was Turner Broadcasting System APAC head Steve Marcopoto.

    Marcopoto winged his way into the country on several occasions before he signed on the dotted line of a deal which resulted in Turner acquiring a 92 per cent stake in NDTV Imagine for $117 million. It took months of negotiation between the NDTV management and him and his team before a deal was hammered into shape. And it surely was a moment of triumph for him, making him one of the key media executives in India.

    For years, Turner has operated in India through channels such as CNN, Cartoon Network, Pogo and through a distribution joint venture with Zee TV, labeled Zee Turner.

    It has maintained its leadership position in the kids‘ segment with Cartoon Network and Pogo, currently ranked No. 1 and 2 respectively on an all-India basis. Growth has been steady and India revenues account for 25 per cent of its regional operations, making it Turner‘s largest and fastest growing market.

    During the year, Marcopoto persisted with the Turner mission to further develop the Indian animation industry. Along with Pogo and Cartoon Network India head Monica Tata and creative director Vishnu Athreya, he made various acquisitions, co-creations and initiatives such as Snaptoons (Short New Asia Pacific Cartoons), bringing the pre-school series Sesame Street to India in a local avatar – Galli Galli Sim Sim and nurturing one of the most successful homegrown, animated heroes – Chhota Bheem, amongst others.

    2010 will come with its set of challenges: he has to ensure a smooth transition of Imagine into the Turner fold, and work closely with CEO Sameer Nair to draw up strategies to make the investment pay off in the medium-to-long term. Marcopoto will also have to create compelling content and build the Turner brands across every possible platform, including TV, online, merchandising and mobile.

    Lalit Modi
    To say that Lalit Modi had an eventful year is an understatement. This year he showed his ability to turn a challenge into an opportunity while taking steps to make the IPL a global brand. He shrewdly renegotiated the IPL TV deal with Multi Screen Media in a fresh deal valued at Rs 82 billion ($1.6 billion).

    The earlier ten-year contract, which Sony couldn‘t protect, was worth $918 million for telecast and $108 million for promotion of the tournament. Then the IPL was forced to relocate to South Africa due to the elections. Undaunted by the challenge, Modi and his team worked around the clock at short notice and pulled off a success, thus silencing naysayers. With this move, the IPL took its first steps towards becoming a global brand.

    Modi‘s clout lies in bringing in the money while expanding the reach of the IPL. A deal was done for theatrical rights with Dar Capital and is worth Rs 3.3 billion. It is a known fact that cinema receipts suffer when the IPL is on. The message from Modi is clear – If you cannot beat us, join us.
    In 2009 Modi also announced a base price of $225 million for the two new IPL franchises who will come in later this year. This is more than double what the highest franchise paid in 2008. This gives an idea of just how much the IPL has grown in value in a short space of time.

    It is this ability of Modi to run a steady ship while raking in the moolah no matter what obstacles there are which made BCCI president Sharad Pawar throw his weight behind him when the IMG contract was cancelled by N Srinivasan. The contract was eventually re-negotiated.

    While there is a faction within the BCCI that would like to see Modi out, the fact is that he will head the IPL till 2012. Even BCCI members who have issues with Modi admit that they need him. Modi is effecting changes that are rapidly changing the perception of the game by stakeholders.

    Apart from the IPL, Modi also managed to get the Champions Twenty20 League off the ground. He formed a partnership with Cricket Australia and Cricket South Africa for this. The TV deals done by ESPN Star Sports saw cricket reach more countries than ever before in Europe and other territories. While the ratings in India were not great, one can expect Modi to come up with more innovations.

    In 2009 Modi also took up the issue of piracy on a war footing. Under his guidance an association in conjunction with the cricket boards of England, South Africa and Australia was formed. This move has the backing of the ICC and is the first time that sports broadcasters and stakeholders are making a concerted effort to fight this problem.

    In 2010 Modi is showing no signs of slowing down. The deal with YouTube this year could change the face of sports broadcasting in the years to come. And with the commercial success of the IPL, Modi is thinking in terms of spreading the global reach of the game. He has already hinted that the US may be the next frontier and is in that country at the moment. The aim is to possibly do an event within the next 18 months.

    Dr Prannoy Roy

    At the beginning of 2009, Prannoy Roy looked an extremely worried man. The psephologist turned hardcore newsman had got himself into a corner. Two of his diversifications were burning up cash and how, scorching the main mother news network.

    The first was a general entertainment joint venture channel NDTV Imagine with US major studio NBC Universal. The second was his lifestyle programming forays into NDTV Lifestyle. Roy had launched these services earlier when the times were good, and revenues were in full flow, but with the economic downturn he was being battered. It was imperative that something be done.

    The economics doctorate from the Delhi School of Economics decided to take the battle to the frontlines along with his senior management team spearheaded by KVL Narayan Rao. Get rid of the diversifications and focus on your core competence – news – became the mantra. Along with the senior team and investment bankers, he spent a large part of the first part of the year scouting for buyers for his non-news verticals.

    The other focus of the team was: reduce the group‘s high interest burden which had come its way courtesy its need for cash for its diversifications. He bought back NBC Universal‘s 26 per cent indirect stake in NDTV Networks Plc. The company‘s $100 million step up coupon bonds due 2012 were bought for $72.4 million. This drastically lowered its borrowings and concomitant high interest bill. NDTV was also freed from the undertaking to provide a $40 million guarantee to the bond-holders.

    He also shut down a local news channel he had started in Metro Nation Delhi, cutting down costs.

    NDTV Lifestyle was put on the auction block and around Diwali, he managed to find a buyer for it. The US-based Scripps Networks Interactive bought up 69 per cent of the company on a fully diluted basis for $55 million, in what was seen as an extremely profitable sale.

    Then just as the year was ending he unveiled his final coup de grace: he found a buyer for the hungry for cash NDTV Imagine. Turner Asia Pacific Ventures bought out 92 per cent of NDTV‘s stake in Imagine for $67 million, while investing in fresh equity in the company to the tune of $50 million, bringing up the value of the transaction to $117 million.

    The moves were lauded by all media watchers and the company‘s bottomline started showing improvement.

    And Prannoy ended the year with a beaming smile on his face. Yes, the network still has its work cut out for it. But the comeback has begun.

    Harish Thawani
    This year this street smart maverick renewed the deal with the BCCI with his company Nimbus for another four years till 2014 in a deal worth Rs 20 billion, thus ensuring stability. Thawani has asserted in interviews that the payout per match is similar. Of course, the deal does not include new media.

    Thawani also maintains that rationalisation was bound to happen with the economic environment. He insists that everybody in a deal has to benefit and that the days of bids reaching stratospheric levels are gone. The fact that the BCCI did not bother to go through a tender for the rights, as Nimbus had the first right of negotiation, shows that Thawani got his calculations right in terms of what these rights are worth. After all, the BCCI would have conducted some talks with other sports broadcasters to find out if they were willing to pay more.

    Thawani is known for being proactive in terms of deals being done. He asserts that the company got a 10 per cent discount on the earlier deal on account of the mandatory feed sharing act being passed. Even not going for the new media rights this time around was a deliberate strategy. Highlights and clips got more traffic than live streaming under the old deal. Therefore for him it was not a cost effective proposition.

    Last year Nimbus had complained to the BCCI in a letter about the quality of facilities for broadcasting which forced cricket‘s richest body to take action. Thawani is also said to have been a strong force behind the BCCI instituting the Corporate Trophy.

    On the distribution front, it is expected that Neo would have doubled its revenue for 2009. This is creditable given that Neo had to do the distribution on its own after the deal with Star went sour a couple of years back.

    Moreover the channel‘s audience deliveries have been better than the competition‘s at times as was seen with the India versus Sri Lanka series. Neo Cricket now claims to have finished as the top sports channel for two years in a row. Overseas, Neo Cricket bolstered its presence with several deals last year and is now present in 25 countries including Japan, Korea, Singapore.

    Thawani, though, is looking beyond just cricket. He has plans for two new channels in the lifestyle and film genres. And, yes, the IPO could be round the corner.

     

  • 2009: Bollywood’s Bad Year

    2009: Bollywood’s Bad Year

    For most observers, 2009 was year of mixed fortunes for Bollywood. While the industry took efforts to globalize and some of its talent got global recognition in the form of awards, it had a lean year on the domestic front.

    A multiplex strike and a drought of hits got the industry into a tizzy. The saving grace was the end of the year Xmas release, the Raj Kumar Hirani-directed Aamir Khan starrer 3 Idiots that went on to become the highest grossing Hindi film ever with a gross collection of Rs 3.15 billion and counting.

    The year‘s highlight was the aggressive moves by the Anil Ambani-owned Reliance Big Pictures into Hollywood. Reliance Big and American filmmaking icon Steven Spielberg locked the first phase of financing, sealing an amount of $825 million that would allow the joint venture to make six films annually for global audiences.

    Reliance Big Pictures also signed script development agreements with Nicolas Cage‘s Saturn Films, Jim Carrey‘s JC 23 Entertainment, George Clooney‘s Smokehouse Productions, Chris Columbus‘ 1492 Pictures, Tom Hanks‘ Playtone Productions, Brad Pitt‘s Plan B Entertainment, Jay Roach‘s Everyman Pictures, Brett Ratner‘s Rat Entertainment, Julia Roberts‘ Red Om Films and Ron Howard‘s Imagine Entertainment.

    Karan Johar‘s Dharma Productions and Shah Rukh Khan‘s Red Chillies Entertainment finalised an arrangement with the Murdoch owned Fox studios in the middle of the year for the then under-production My Name Is Khan.

    Under this, Fox Star Studios would be marketing and distributing the film in India, while Fox Searchlight Pictures (which was responsible for the marketing of Slumdog Millionaire and Avatar) would handle the American release. US major studio Twentieth Century Fox would coordinate the release outside the US and India.

    The real biggie was the winning of globally renowned awards by Indian talent – namely AR Rahman, lyricist Gulzar and Resul Pookutty. Rahman pocketed so many awards for his music and songs for Slumdog Millionaire that he probably has lost count of them.

    Two Oscars (one jointly with Gulzar for the song Jai Ho), a BAFTA, a Critics Choice Award, a Golden Globe, and three Grammy nominations, among several others. Pookutty, on the other hand, walked away with a Golden Globe and a BAFTA award for his involvement in the film as a sound engineer.

    2009 was the year when the global financial turmoil took its toll on Bollywood, forcing production houses to scale back. Adding to its woes were the general elections, cricket bonanza IPL which forced audiences to stay glued to their TV sets, and the multiplex faceoff between exhibitors and distributors.

    The second quarter between April and June was rocky. First, were the general elections which were held in five phases between 16 April and 13 May when people were busy with electing a new government. Naturally, people avoided going to the movies.

    Then there was a two-month multiplex strike from 4 April to 5 June that witnessed a virtual drought of movies. Though single-screen theatres remained open, films released in that period were hardly worth a mention.

    IPL season 2 played between 10 April and 29 May was shifted to South Africa because of the elections but that did not deter cricket buffs who watched the matches late in the evenings and into the nights. Result: footfalls in theatres for the evening and night shows dipped drastically. The swine flu scare also added its bit to keep moviegoers away.

    “Last year has been a tough one because of a couple of reasons. First, for three months there were no releases which caused a dent and a lot of movies bunched up that further ate into one another‘s revenues. Then, because of the abundance of movies, audiences declined,” observed UTV Motion Pictures CEO Siddharth Roy Kapur.

    Estimates are that about 140 films were released during the year. Attempts at releasing differentiated cinema were made with titles such as Delhi 6, Luck By Chance, DevD, Quick Gun Murugun, Rocket Singh, Wake Up Sid among many others. But they failed to strike moviegoers‘ fancy and did average to poor business at the box-office.

    Even star power did not help: the Akshay Kumar starring Chandni Chowk to China, Blue, Kambakt Ishq, Tasveer left the cash coffers relatively empty. As did Dil Bole Haddipa (Rani Mukerji, Shahid Kapoor), Luck, All The Best (Sanjay Dutt), Kaminey (Shahid Kapur), What‘s Your Raashee (Ashutosh Goawariker director), Aladdin (Amitabh Bachchan) and Main Aur Mrs Khanna (Salman Khan) and London Dreams (Salman Khan). No amount of fancy cinematography, visual effects or involvement of international artistes such as Kylie Minogue could save the much hyped and big budget Blue.

    Says trade analyst Amod Mehra, “For some years now, the concept of a ‘media hit‘ has come in, and so Dev D, Wake Up Sid and Kaminey were termed as hits, though the numbers just did not add up.”

    According to Indiantelevision.com only four films – apart from the biggy 3 Idiots– could be termed successes: New York, Ajab Prem Ki Ghazab Kahani, Wanted and De Dana Dan.

    In trade parlance, a super-hit must gross at least thrice the money for which it has been sold. This year, only 3 Idiots, besides two Hollywood films 2012 and Avatar could be termed super hits.

    It may be noted that the year 2008 had seven blockbusters while 2007 and 2006 tied with six grossers each.

    On a cost-to-profit ratio, 3 Idiots and and Yash Raj Films‘ New York did well. On the footfalls front, Wanted, the Hindi remake of the Telugu blockbuster Pokkiri, took the lead, especially at single-screen theatres.

    Other films like Paa, All The Best, Raaz- The Mystery Continues and Wake Up Sid did average business. The Hindi version of Oscar winner Slumdog Millionaire managed to make a small profit while the English one fell flat.

    Yash Raj Films and Eros Entertainment came out with four films each in Hindi of which all bombed or did average business at the box-office.

    On the film production front, film making companies like Studio18 desisted from releasing any films, focusing instead on cleaning up their acts while others slowed down their production schedules.

    Eros reached a milestone when its Marathi film Mee Shivaji Raje Bhosle Boltoy set the cash registers ringing. It was the overseas distributor for De Dana Dan that dished out commendable business.

    In the period of financial woes, satellite movie channels and filmed entertainment owners found a business model in syndication. The big deals swung during this period were movies from UTV and Eros. A few outright purchases were also made by Sony, Star and Zee Group.

    Multiplexes, who will have to dish out more towards content cost in relation to their revenue share after their new pact with the producers, have been bruised for two straight quarters in the fiscal. But with Bollywood churning out a few hits towards the end of the year, the plexes are sitting happy and expect revenue buoyancy in the last two quarters of the fiscal.

    The industry will have to face challenging times in 2010. Single-screen theatres have not done enough to attract audiences. As far as multiplexes are concerned, rising ticket and food prices have meant that moviegoers are becoming choosy about the film they would like to spend to watch.

    Hence, it is quite likely that the era of many blockbusters in a year might well be a thing of the past. The industry is likely to see fewer big hits, some releases with minor profits, some breakeven and most that will possibly bomb.

    Additionally, film makers will also have to take a hard look at costs. The trend towards multi-star films, rising star (whether in front of the camera or behind) fees, high marketing investments have made recoveries from ticket sales extremely difficult. Of course, they will also have to take care not to bunch releases close to each other; something which could prove difficult, though not impossible.

    Observers believe 2010 could prove to be a landmark year for Bollywood internationally. A lot will depend on how My Name is Khan does at the box-office globally. If the international distribution experiment by Fox delivers for the US studio, it could well pave the way for Bollywood to break into Hollywood film audiences.

  • HITS a gain but government mum on FDI hike in 2009

    HITS a gain but government mum on FDI hike in 2009

    With India having touched the monumental figure of 512 in terms of television channels including 249 news channels, the Information and Broadcasting Ministry pushed the panic button towards the end of 2009, asking the Telecom Regulatory Authority of India (Trai) to study how many channels can be permitted in the country.

    As a follow-up, the Government has with immediate effect suspended receipt of new applications for permission to uplink television channels from India and downlink channels to India until the regulator submits its report on spectrum availability.

    In an order of 18 January, the Ministry said “it has been observed that although improved technologies have resulted in better utilization of the available spectrum and transponder capacities, the spectrum and transponder capacities for satellite TV channels are not unlimited. A need is felt to revisit the present policy for uplinking and downlinking with respect to the approach towards grant of permission including the eligibility criteria and the terms and conditions of the permission.”

    Early in October 2009, I&B Minister Ambika Soni had written to Trai Chairman J S Sarma to examine issues relating to expansion of private television channels in the country. The Minister asked the Authority to examine ways of checking the financial viability of parties that apply for setting up news channels in the country.

    However, Soni on 7 December denied in Parliament that the directive to Trai to examine the status of television channels in the country implied any plans to curb the growth of the sector. She said the study to examine the maximum number of channels that could be telecast was being carried out in view of spectrum constraints.

    “The government is surely not going to shut the door on the growth of TV channels in India. But there is a logistic problem and the government has to sort it out. Some of our growth plans may be temporarily upset,” says the head of a broadcasting company on request of anonymity.

    Meanwhile, the I&B Ministry is also keen that the Broadcast Services Regulation Bill that is pending finalization for about three years should sail through and provide for an independent regulator and a Content Code.

    A senior Ministry official told indiantelevision.com that a task force had been set up under the chairmanship of the Secretary in the Ministry, Mr Raghu Menon, and had already held a few internal meetings, The task force – which comprises representatives from the Indian Broadcasting Foundation, the Broadcast Editors Association, and the News Broadcasters Association among others – would now meet stakeholders including consumers, representatives of the print media, civil societies, and editors “to understand their concerns.”

    “Self-regulation has some limitations,” the official added without elaborating, while referring to the Content Code and the Regulatory Body formed by the News Broadcasters Association.

    It was expected that this task force would complete its work by March this year. The official said the issues under discussion were not merely content, but also quality of service, carriage fee, service charges and so on. Thus, the entire responsibilities that the independent regulator would have to bear would be finalised.

    However, the Cable Operators Federation of India has challenged the constitution of the Task Force on the ground that those sought to be regulated cannot adjudicate on the kind of regulation the government can impose.

    Meanwhile, six State Monitoring Committees and 67 District level Committees have been constituted to review and deliberate on the litany of complaints received by authorized officer or take suo motu cognizance of violations transmitted and re-transmitted in the local channels.

    Over 130 Advisories/Warnings/Orders were issued to various TV channels for violation of the Programme and Advertising Codes prescribed under the Cable Television Networks (Regulation) Act, 1995 and rules framed thereunder.

    Interestingly, many of the notices issued during 2009 related to reality shows like Big Boss on Colors, Pati Patni aur woh on NDTV Imagine, and Sach ka Saamna on Star Plus, apart from some for popular series like Bandini on NDTV Imagine and Balika Vadhu and Na aana is des Laado on Colors, and most of the others for the content of commercial advertisements.

    A total of 77 private satellite TV channels were permitted to uplink/downlink under the uplinking and downlinking guidelines, taking the number of general entertainment channels to 263. Permission has been given to set up nearly 75 teleports.

    In comparison, there were 417 private channels (357 uplinked from India including 197 news channels) and 33 Doordarshan and Parliamentary channels in 2008.

    Trai had earlier issued a consultation paper on restructuring of the cable sector, and is understood to be working on a deadline since cable operators have not been responding to the questionnaire placed by it on its website.

    After obtaining the Union Cabinet‘s approval to issue policy guidelines for Headend-In-The-Sky (HITS) operators, the guidelines were announced on 26 November 2009. Being a digital delivery mode of distribution, HITS would speed up the process of digitalization of cable services located in non-Cas (conditional access system) areas of the country.

    Though the country failed to make much headway in the area of IPTV despite the Ministry having rushed through amendments in the downlinking guidelines for this segment in September 2008, this was attributed to the slow pace of broadband growth and to the strong penetration of cable TV and growth of DTH. IPTV operators also complained that there was very little clarity provided by the government on content issues.

    Media companies are hoping that the government will hike FDI (foreign direct investment) limit and come out with more liberal policies in 2010 to fuel the sector‘s growth.

  • Avatar bags two prestigious Golden Globe awards

    MUMBAI: James Cameron‘s 3-D spectacle Avatar has won two prestigious Golden Globe awards. The film was chosen the best movie (drama) while Cameron won for the best director award.


    Crazy Heart star Jeff Bridges won the best actor in a movie drama award — the first Golden Globe of his career. Robert Downey Jr. won the Globe for best actor in a movie comedy or musical for his role in Sherlock Holmes.


    The best actress in a movie drama went to Sandra Bullock for her work in The Blind Side. Meryl Streep took home her seventh Golden Globe, one for best actress in a comedy or musical movie, for Julie & Julia.


    While The Hangover won the Golden Globe for best comedy or musical film, Austrian actor Christoph Waltz won the Golden Globe for best supporting actor in a movie for Inglourious Basterds.


    The Golden Globe for best TV drama was awarded to AMC‘s Mad Men for the third year in running and Alec Baldwin repeated his Emmy success at the Globes, winning the best actor in a TV comedy or musical series award.


    Kevin Bacon won the Golden Globe for best actor in a made-for-TV miniseries or movie for his acting in HBO‘s Taking Chance.


    The Globe for best actress in a made-for-TV miniseries or movie was bagged by Drew Barrymore for HBO‘s Gray Gardens. Chloe Sevigny, who plays the second wife in HBO‘s Big Love took the best supporting actress Globe for a made-for-TV miniseries or movie.


    Up in the Air, that was nominated in six categories, won the best screenplay award. Up was also honored for best original movie score that was composed by Michael Giacchino.


    The award for best original song for a movie went to T Bone Burnett‘s The Weary Kind- the theme of Crazy Heart.


    The Golden Globe for best foreign language film was given to Germany‘s The White Ribbon.

  • A blank in 2009, wait for FM radio policies this year

    A blank in 2009, wait for FM radio policies this year

    Promises, more promises, and no action. That is what the private FM radio operators felt as the government blanked out any reforms in 2009 that would have fuelled growth in the sector.

    Want Phase III expansion? Wait for 2009. Want a hike in foreign direct investment (FDI)? Will take time to study the Trai recommendations. Want to broadcast news? Can‘t tell now.

    Private FM radio operators, though, go into 2010 with a lot of hope that the door will open for more liberal policies. They don‘t forget the words of Information and Broadcasting Minister Ambika Soni at the World Economic Forum‘s India Economic Summit in November 2009: that a note is being finalised for the Cabinet to recommend an increase in FDI limit and allowing Akashvani-sourced news on private FM radio channels.

    The Phase III of FM radio expansion policy, deferred due to certain issues including multiple frequencies and royalty for music, is expected before the fiscal ends. It will cover 92 cities, according to the plan drawn up by Trai.

    A massive infusion of capital will be required as the national footprint expands into smaller towns. Trai has recommended that the FDI be hiked from 20 per cent to 49 per cent, but the government is yet to confirm on this. Funding will continue to hound the sector if the government does not spell out more liberal policies in 2010.

    The government is particularly not happy with the slow growth of community radio. “Community radio can change the face of local broadcasting. But the growth in this segment is disturbingly slow despite adopting a painless procedure for obtaining licences to operate community radio stations,” says a senior I&B official.

    The government is organising consultation workshops in different parts of the country to increase awareness of the advantages of local radio stations. Beginning with Rajasthan (Tilonia) in November 2009, a series of workshops have been held in Meghalaya (Shillong), Haryana (Faridabad), Madhya Pradesh (Chanderi), and Tamil Nadu (Tiruchendur) before the year closed.

    A workshop had also been held earlier this month in Kerala (Wayanad), while four others planned so far are in Karnataka (Budhikote), Maharashtra (FTII in Pune), Uttar Pradesh (Allahabad), and Uttarkhand (Tehri Garhwal) before the end of this fiscal.

    A total of 48 Community Radio Stations are presently functioning in 16 states and Union territories (42 from educational institutions and six from non-governmental organisations). Twenty letters of Intent have been issued in 2009, taking the total to 189 LoI so far. A total of 584 applications, including 240 applications from educational institutions, have been received from various organisations for setting up CRSs. While 79 had been rejected, a total of 316 applications are under process.

    The game-changing year for FM radio could be 2010. Says ENIL chief executive officer Prashant Panday, “I am quite sure that 2010 will be known as the year of radio. Phase III policy of radio reforms will come. And by 2011, the radio industry could start offering a serious alternative to regional print publications.”