Category: Television

What exactly is the deal with Dentsu?
Dentsu has bought a high proportion of inventory on Max for the two ICC tournaments. By coming in early, the agency has ensured that its clients get into the World Cup without paying a real high premium (settling between the sponsorship and spot rates). The deal has put less pressure on us to individually sell that many spots.

Was there a proposal to handle the entire inventory on a minimum guarantee (MG) and revenue share basis?
Dentsu did make an offer. But we couldn’t have done that in India because of ICC restrictions. Besides, we were clear that we wouldn’t do one block deal. We still have to maintain our relationship with other agencies and clients.

Is the Dentsu deal going to be a trendsetter in sports selling even as acquisition costs for cricket TV telecast rights go up?
It definitely is an eye opener for a lot of people. What Dentsu has done, most agencies should start doing – engaging with broadcasters well in advance. Agencies shouldn’t try to beat the ground pricing always. As much as I have to sell, they have to buy. Everything can’t boil down to rates; then you will never get value. Where are the CPRPs (cost per rating point) for Super Bowl in the US? There is something called an ‘impact buy.’ Cricket should be looked at from that perspective; it not only brings in new audiences but is also a religion in the country.

Is SET India targeting an advertising revenue of Rs 5 billion from the two ICC tournaments?
I can’t disclose the exact figures. But we are going to double our revenues from the last World Cup.

How?
Just look at the cable and satellite (C&S) viewing universe which will have more than doubled from 32.5 million homes in the 2003 World Cup to 70 million by the time the March 2007 edition kicks off in the Caribbean. That would mean a potential viewership of over 300 million glued on to their TV sets.

Besides, the two tournaments sit on a perfect timing with brands being active from October (festival season) to April (summer spending). Add to this the advantage of the Champions Trophy being played in India.

How much money have you tied up from the eight sponsors?
I can’t go into the specific details, but 50 per cent of the total inventory is consumed by the two presenting (Reliance Infocomm and Nokia) and six associate (Pepsi, Hero Honda, Maruti, Hewlett Packard, LG Electronics and ITC Foods) sponsors. We have sold the two tournaments together as they involved huge outlays from clients. We will eat into the share of the biggest channel’s revenues.

What are the brands you target for Extraa Innings?
This is a very big property for us and we sell it to a separate set of sponsors. We target smaller brands who do not have that kind of budgets to be on the World Cup matches itself. Extraa Innings is not just wraparound programming but is fun and entertainment. We monetise every property that we have.

How much of a revenue advantage will the Hindi feed on Sab TV be?
Doordarshan gets 30 per cent of its viewership from C&S homes because of the Hindi commentary. Our aim is to eat into this. We are, thus, simulcasting 18 key matches on Sab in Hindi. We are offering value to the advertisers who would have also bought on DD. We want to own the entire C&S homes.

During the last World Cup, SET India’s strategy was to push Max. Are you working out a similar strategy with Sab this time?
We will use the World Cup to lift Sab to the next level. We did that with Max during the last World Cup and raced ahead of Zee Cinema, which had an early mover advantage, in one year’s time. We have planned big launches like Fame X (the refurbished version of Fame Gurukul) on Sab TV. We have also recently put up a clutch of comedy shows.

Have you changed the positioning of Sab TV after buying it out?
When we acquired Sab TV, it had a fuddy, duddy image with an appeal in the Hindi heartland. As this old image restricted growth in ad revenues, we felt the need to reposition it as a youthful, light hearted channel. Sony as a network stands for the youth brand. With cricket and Fame X, we obviously have a far more aggressive growth plan for Sab. Our aim is not to make Sab TV a flanking but a strong channel standing on its own.

Sony is in talks to acquire stake in Ten Sports. Do you feel the need of a complete sports channel?
I wouldn’t like to offer comments on this.

Is the time right to hive off Max into a complete movie channel in the changing scenario?
With so much of cricket happening now, it is certainly good to have a sports channel. Because in a hybrid channel, you are disrupting the viewership and revenues. But it all depends on what properties you are acquiring. For us, Max has worked well as a hybrid channel. We have been able to marry together both the passions – movies and cricket. The ICC property we had offered major tournaments every two years; we could change gears effectively. Max is no more a poor cousin of Sony, but rakes in ad revenues over Rs 1 billion (from around Rs 280 million before the World Cup) purely on its movie strength. Whether we will continue down this road, I don’t really know. I wouldn’t at this stage be able to comment for the future.

How will revenue support high telecast fees for the next World Cup bid?
The industry will have to use new ways. As TV telecast rates climb higher and higher, we may have tie-ups with agencies and clients at the time of bid. We don’t know – all that may happen to minimise risks. We will have to explore all options. Cricket, after all, will be a dominant monopoly at least for the next ten years. Of course, other sports like football will emerge. But cricket will continue to rule in viewership and revenues.

Will advertising back up such acquisition costs or the model be driven by subscription revenues?
Ad rates will have to go up. When Harish Thawani starts selling this time, he will have to get real pricing because his company Nimbus has paid that kind of money to get the telecast rights for cricket in India. He couldn’t do that last time because he didn’t have a channel. The real value of cricket is now going to show up because the new rights where people have paid huge money are now coming in. So the next 6-8 months in cricket is going to be exciting because you will see the rates go up substantially. Otherwise, somebody is going to get bankrupt.

We will also see money shift from on ground to on-air advertising. The value of on ground properties is diminishing.

What about subscription revenues?
Direct-to-home (DTH) and conditional access system (CAS) will form a revenue component when the ICC bid comes up this time. We had factored in some inflows from DTH when we made the bid last time, but it got delayed by two years. For us, it has been advertisement-led and we have successfully achieved that.

With Zee TV on a resurgence, how has the slip in Sony TV’s ratings affected the revenues?
As a network, our ad sales will grow by 30 per cent this fiscal. Sony TV saw a blip last quarter but with the launch of Jhalak Dikhla Jaa we are sorting it out. We will also be using cricket in a big way to promote our properties and are launching Big Brotherimmediately after the Champions Trophy. Unlike the last World Cup, we have planned up big show launches just after the tournament.

Isn’t Pix slow to take off?
We have now got the distribution right. We will start focussing on selling. We are looking at premium brands as the positioning of the channel is for SEC A.

Pix has a library from MGM but lacks new movies which HBO and Star Movies are able to telecast. How do you plan to correct that?
The two movie channels show premium new titles only once a quarter. We don’t plan to have those titles for at least the next one year. But that won’t affect us. We have a good library. Besides, there is space for three English movie channels.

What are the plans for AXN?
We will continue to do at least three big local ground events. That is the advantage AXN has against its competing channels. We integrate events with the local brands. Man’s World is also coming up. AXN is a youth and adventurous channel which telecasts action titles.

Is there concern that the World Cup almost coincides with the implementation of CAS?
We see it as an opportunity. The World Cup will drive CAS. Much like brands being born out of the World Cup. We have seen how the top two players in any sector (consumer durables, telecom, automobiles, etc) have used cricket to grow. That is the power cricket has over audiences in India.