ITV

Category: GECs

  • ‘We want to become the GEC for young India’ : Zarina Metha – Bindass CEO

    ‘We want to become the GEC for young India’ : Zarina Metha – Bindass CEO

     She waits with baited breath, jittery to unlock her next treasure. Bindass CEO Zarina Mehta is bubbling with energy as she talks about her second baby Bindass. This time round, Mehta is casting her magic wand over the Indian youth segment, but with a mammoth approach as she navigates across multiple media platforms to capture her target audience. Some question whether she will rewrite the Hungama TV story and the impact it had on the Indian kid’s space. However, in this case she looking to unveil a quartette of four Bindass television channels by April 2008.

    With the backing of Malaysia based media company Astro, she seems geared up to take on competition with other broadcasters also foraying into the youth general entertainment segment. As this television space is heating up, Mehta is leaving no stone unturned to capture what she calls the “sweet spot.” In an exclusive t?te-?-t?te with Indiantelevision.com’s Renelle Snelleksz, Zarina Mehta exudes the excitement and the anxiety before she breathes life into her next creation.

    Excerpts:

    Why have you decided to change your TG positioning by extending the demographic beyond the 15-24 year olds even before launching Bindass?
    When we initally conceived the channnel, we were looking at the 15 – 24 year olds, but further research urged us to redefine our target audience as 15-34 year olds. The median age for India has dropped by two years to 24 years since the 2001 census.

    But how do you manage to make one brand appeal to this wide audience? It is all about targeting what we call our “sweet spot” or the 17 -21 year olds. We realized that if we target our sweet spot, then we will automatically attract the larger segment of 15 – 34. This is because the 15 year olds long to belong, while the 34 year olds just do not want to grow up. This ‘down aging’ phenomena is a sensational find because if I get my 17 – 21 year olds correct (which I pray I do, she laughs), then I will capture this larger segment as well.

    What opportunities does this segment offer?
    Between the 15 – 34 age group we have got 379 million Indians (All India) and in the C&S homes 95 million Indians. But who is currently engaging this audience? Star One did it in its old avatar, Sab is making a good attempt, there are also one off shows from GECs and some niche channels. But there is definitely a gap.

    The 15 -34 year olds comprise 42 per cent of all TV viewing. This is a fantastic opportunity for us. The viewership patterns from 2005 till now are also changing, which shows the decline of the GECs as viewers are moving away from their traditional consumption and trying new things. There is thus a gap in the general entertainment space on television and we want to cater to this segment. We want to become the GEC for young India.

    The concept behind Bindass has largely been supported by research. Are there any significant findings that have helped give shape to your upcoming channel?
    We did three and a half months of solid research, we have a proprietary name test which we had done for Hungama TV, Ceria and for Bindass. Secondly, we did an ethnographic qualitative study, followed by a quantitative study based on attitudes conducted by Synovate across six Indian cities and 2500 samples. Our research is invaluable and the key finding stated that our sweet spot (core TG 17- 21 year olds) have a ‘duality’ but are very comfortable with having a traditional heart with a cool exterior. This forms the core brand value of Bindass.

    The ‘Bindass’ name is imbued with certain brand properties that resonate with factors like chilled out, edgy, sexy and young. But as the creators of brand Bindass these values were not sufficient to create a 360 degree long term brand. So we added values that will further energize the brand and came up with the following propositions. If you are not “yo dude” and you are not “saas bahu” then you are Bindass. We are the reality of young India that consists of the four F’s – Fun, Frank, Fearless and Freedom.

    Our logo has been designed by BDA and is exactly what we represent, completely Indian with a cool exterior, that is what we believe will work.

    On the programming front, what’s your strategy?
    The channel will have no music, no soaps, no gadget shows, no lifestyle shows and no VJ’s. So what are we left with? It is going to have a lot of comedy. We will have action thrillers, Hollywood blockbusters and the best of local and International shows, accompanied by late night horror, International movies and extreme sports.

    Our daily driver primetime shows include a stand up comedy Lagegi that is shot 24 to 48 hours prior to telecast from Monday to Thursday. We will have seven BIA’s – Bindass Intellegent Agents from the top cities giving us reports on what is happening across India. Then there is Shakira, a dark angel fighting for justice, every man’s fantasy, while another daily comedy is Sun Yaar Chill Maar. We also have a street magician show by Ugesh Sarcar.

    Our programming is tailored to fit our research findings which show that the 15 -24 age group watches two and half hours of TV a week and movie channels are consumed for six hours a week by this TG.

    In the highly cluttered TV environment, have you identified what your primetime is going to be?
    Our primetime is definitely going to be the normal primetime 7.30 – 11.30 pm. But what is interesting is that this audience will be consuming TV across the day, so we will be discovering new primetimes. There will probably be the regular primetime and two other primetimes, which we have also identified and we are pushing your programmes at that time as well. This will be a learning curve for us.

    But won’t this interfere with GEC primetime, especially in the reality of a single TV household?
    Yes, we will, thus, be discovering our own primetime. Is our TG going to be able to snatch the remote or not? We believe that within this primetime they will snatch the remote. But basically there are two time slots within primetime that we are gunning for. Apart from that, we do believe there will emerge other primetimes which will be a morning and afternoon one. We are looking to garner ratings right through the day.
    ‘We will be discovering our own primetime, but there are two slots within 7.30 – 11.30 pm that we are gunning for‘

    You are also looking to have a strong movie line up on Bindass?
    We have top of the line Hollywood blockbusters that we will dub, along with Japanese and Chinese films as well. It is important that the movie is ‘bindass.’ Even if I know a movie will rate well but if it does not qualify as a bindass film, then I won’t put it on the channel.

    We are not going to have Hindi movies on our channel, for the same reason that we are not having music, because it is ‘undifferentiated viewing.’ The way Hindi movies are bought in bulk, you are not allowed to pick and choose, thus you cannot build your brand, but in case of international films you can do this.

    Will this mean that you will not have any films from the UTV stable?
    We may have them eventually, but only if it’s a Bindass movie. It also depends on whether we can afford it. At the moment, I am only looking at international movies from Asia and the West.

    What is your movie strategy for the channel?
    Primetime movies will be for the weekends, but we will also showcase two movies a day largely off primetime.

    What about animated content on the channel?
    I personally love animation but unfortunately in India animation is perceived as being for kids. I can’t afford to have that on Bindass when we launch. Maybe after the brand has settled and people have realized that it’s a 15+ brand, then I can put it on. But this will definitely not happen in the first year.

    Are all the Bindass shows produced in-house?
    Two have been produced in house i.e. Shakira and Sun Yaar Chill Maar but Lagegi has been done by the production house Encompass. However, all the concept ideas have come from us.

    How many locally produced shows will be on the channel?
    At the moment we have three shows. But we will have six original hours of content per day which includes a mix of locally produced shows, dubbed acquired content and movies.

    Will the mix be largely skewed towards local content? What is the proportion of local versus acquired content?
    We will just have to wait and watch although I believe local content is very vital. Our primetime will be completely local. But we have also learnt from our experience with the kid’s channel Hungama TV that acquired content can also do very well.

    Local programming will consist of 45 per cent and acquired 55 per cent. But we have to first see what works and then decide eventually.

    What are the plans to introduce other Bindass channels in India?
    By April 2008 we will have four channels which will be variations of Bindass. We are currently exploring what those will be and are even exploring whether it will be a regional channel or maybe even another genre within this youth audience space. We have, however, decided to launch a movie channel called Bindass Movies by early October. We have acquired a huge library consisting of about 150 movies to start with.
    ‘By April 2008 we will have 4 channels which will be variations of Bindass‘

    Will this new channel also have only international movies dubbed in Hindi or are you also looking to infuse some Bollywood content?
    Not when we launch, but eventually we may consider infusing some Hindi movies into the channel. What was an eye opener for us was that our analysis of over a year’s ratings indicated that a dubbed Hollywood movie gets three times the ratings of the non-dubbed version of the same movie, while a Bollywood film gets only double of that. So as a cost benefit analysis, this is the way to go.

    Will this also be a pay channel like Bindass?
    Yes, I only believe in the pay channel model. All our channels will be pay from day one.

    What will Bindass across the mobile and online platform be like?
    For our mobile platform we have tied up with all the telecom operators in India and our own short code is 5995 to showcase both Bindass and acquired content. There are two kinds of content we are working on. One is popular content which accounts for 95 per cent of revenues. The other five per cent is high-end content which people rarely use but is the future. Popular content consists of wallpapers, ring tones, gaming and contests. We are going to prepare ourselves for what we believe is going to come on mobile, the high technology stuff which includes mobisodes, television clippings, online chat and blogs for which we are talking to people.

    All this is an opportunity to get the content of my brand across all touch points. We don’t see it as competition to TV, we see online and mobile as fantastic opportunities to communicate with our audience. So by taking our content across platforms we will kick off with Lagegi.com an online comedy portal having Lagegi content and other content including user generated content and clips not aired on the show. We will also have Bindass.com which will showcase the brand and the shows.

    Are the retail and merchandising plans for Bindass already underway?
    I am going to start focusing on our retail ventures post the launch of the channel. I have given myself 12 months before I launch two cafés in Mumbai and Delhi. These will be brand extensions of Bindass to create a touch and feel of our brand. We are still in the process of conducting research to arrive at the right representations of the brand. But we have zeroed in on gaming consoles, web zones and merchandising counters that will be a part of the ambience along with some other big ideas. These café’s will be unique to an entertainment brand.

    With the first two café’s, I would like to see how these concepts click with our TG and then we will roll out completely. I don’t want to push it.

    Are you considering roping in a partner for this initiative? The investments for this are outside the Rs two billion that was declared earlier. So what are the investments for this?
    No, not at the moment I am not considering a partner. Maybe I will kick off on my own and get a partner later.

    Yes, the investments are outside the JV and are very high. The investments from the JV alone are Rs 2.7 billion which will be largely dedicated to the four channels.

    What is the marketing push that you have planned to get Bindass off the ground?
    For the media plan, we will start with a big push for Lagegi on TV and with the website in August. This will be followed by Space Yatra which is a contest that will kick off in September giving seven Bindass people across the country the opportunity to go into space.

    With several players now eyeing the youth demographic, how do you see the television space shaping up this year?
    We love competition, without competition we are dead. I am so happy that many people have announced their plans to enter this space. You don’t want to be alone, you want competition to grow the space, to come up with better ideas, you keep going one up and the space grows. I know this sector is going to hot up, in fact it already has. In the Rs 65 billion market there is Rs 18 billion targeting our “sweet spot” – the college going kids. The opportunity is huge as 72 per cent of India is below the age of 34 years.

    What about your plans to take a prototype of the channel overseas (Southeast Asia) like you did with Hungama TV in Malaysia?
    Absolutely, but first it is important to make the mother brand successful at home and then duplicate it. We are looking to extend the brand not only to Southeast Asia but also to take it to the Middle East and East Asia by late 2008 or early 2009.
  • ‘We are an urban metro player and will be operating in seven crucial markets’ : Vishnu Athreya – Radio One VP programming and brand

    ‘We are an urban metro player and will be operating in seven crucial markets’ : Vishnu Athreya – Radio One VP programming and brand

    Radio One has changed its positioning from a niche to a mass station. With help from BBC which picked up a 20 per cent stake in the venture, the focus now is to have a presence in seven big markets – Delhi, Mumbai, Chennai, Bangalore, Kolkata, Pune and Ahmedabad.

     

    Introducing the ‘masti fatafaat recipe,’ Radio One has introduced a 20-20 format with the promise of quick masti delivered through 20 minutes of infotainment.

     

    In an interview with Indiantelevision.com’s Nasrin Sultana, Radio One VP programming and brand Vishnu Athreya elucidates that this is not a mere ‘winning the number’ strategy but would provide differentiation from rival stations.

     

    Excerpts:

    Why did Radio One shift its position from being a niche to a mass station?
    We were the single station providing only English music. It allowed Radio Mid-Day (later renamed Radio One) to be the niche and differentiated station in the market. But we were catering to only a segment of the listeners and were operating only in Mumbai. When we acquired license for seven stations, we thought why not go for the mass station positioning so that we can cater to the needs of all the people.

    What does Radio One stand for now?
    We are an urban metro player and will be operating in seven crucial markets. And we have built the young, fun element to it. We were well received in Mumbai. In Bangalore, we were the first station to have a Kannada platform and tasted great success. We took some amount of time in Delhi which is a different market and has a high rate of loyal listeners, making it difficult for new entrants.

    How has BBC helped in evolving a strategy for Radio One?
    They have contributed at multiple levels – as investors with 20 per cent stake and in providing content. They are also involved strategically with the venture.

    What has BBC’s contribution been in terms of content?
    BBC content definitely acts a push-up for us. They provide us BBC Ek Minute and BBC EK Mulaqat. While BBC Ek Minute provides infotainment every 20 minutes in the new 20-20 format that we have introduced, BBC Ek Mulaqat has Sanjeev Srivastava, the Hindi news editor of BBC, conduct interviews of famous personalities who are not just Bollywood celebrities.

    Could you tell us more about how you arrived at your current format?
    We conducted a detailed study of the market and found out that listeners know how to differentiate between qualitative and quantitative content. We designed the format according to the requirements of the listeners’ information, humour, music and RJ talk/contest. The new 20-20 format with the tagline ‘Masti Fataafat’ is really a mixture of fun, information and music. Listeners will get to hear two to three hit songs (including a classic), humour capsules of Lallan Talkies, Ehsaan Faramosh and Hema Aunty Ke Tips and a one-minute break away of infotainment news from BBC. Besides, there is the regular jock talk and contest. What we promise is a 20 minute of refreshment. We are not saying that this is the best format. But, yes, we are experimenting with the format based on our research. We are clearly differentiated.

    Why is it that all the FM stations are suddenly hooking on to the fun element?
    I think we are all stressed out in our work. What everybody needs is refreshment and fun. When somebody tunes into FM, he expects to get refreshed.

    Do you think listeners tune in to a particular station because that station provides him a particular format?
    Listeners get accustomed to the kind of music and content that a station provides. This is the biggest differentiator. We, for instance, got Srivastava to interview Rahul Dravid during the cricket match in BBC Ek Mulaqat. And we got good response from all over the place.
    ‘The new 20-20 format with the tagline ‘Masti Fataafat’ is a mixture of fun, information and music. With this positioning, we are confident that the growth cycle will be good for us‘

    Has BBC’s participation made a difference to Radio One in terms of listenership and ad revenues?
    The industry is still at a nascent stage and the market has just started to grow. But I am not the right person to comment on our revenues. We are definitely growing as a product and this is getting reflected in our rapid growth in listenership base. With the new format and the `Masti Fataafat’ positioning, we are confident that the growth cycle will be good for us.

    Could you elaborate on your popular shows BPO Nites and Kahani Ghar Ghar Ki?
    BPO Nites and Kahani Ghar Ghar Ki introduced in Delhi station got us huge listeners. BPO nites is a late night show. The RJ visits a particular spot in Delhi and hosts the show live. The Delhi-Gurgaon -Noida belt is inundated with BPOs and call centres. Our show caters to these listeners. It gives them this feeling that somebody is still awake to talk and listen to them.

     

    Kahani Ghar Ghar Ki was initially launched to meet the need of estate-agents. Now our contracts with the agents, who were sponsoring the show, are running out. But we will continue with the show. It is unique in that it talks about the current real estate scenario in Delhi. Real-estate agents give tips on when to invest and when to sell property.

    Do you think that the music industry is charging too high for the content?
    Till date, we have no complaints.

    Almost all the FM stations are positioned as CHR (contemporary-hits-station). Do you think this boosts up the sales of music industry and music gadgets like ipod?
    People of the music industry claim that FM stations have eaten up their market because we provide them with the contemporary hits. But I do not agree to this. In fact we boost up their sales. Films like Jhoom Barabaar Jhoom, Tara Rum Pum have performed badly at the box office but the music has done good business. The credit for this should also go to the FM radio stations. We conduct contests, air songs and promos and have hot interviews with celebrities which pull listeners to the music of the film. The music industry in India is tremendously benefited by us.

     

    FM stations have made youth develop a liking for Indian music. Earlier the college goers and music lovers would always go back to the western music. Now FM stations provide an option. Music lovers are contended with Bollywood music. Why go to Britney or Jlo when they get a better option? FM stations should be credited for popularising Bollywood music in India.

    Do you agree that the programming in all the radio stations is cluttered?
    There is a great need for differentiation in the content. What all of us are providing is music. The listener is not even bothered about the station he is listening to. Down south, when I asked a couple of people which FM station they were listening to, they weren’t able to say which one. So it is the broadcaster’s responsibility to create differentiated and unique content.
    The current ILT (Indian listenership track) report by MRUC says that the listenership growth has stagnated. What do you think of this?
    I am aware that the growth is not so high. Please consider that this is a completely new industry in India. We are just five-six years old. Some of us are much younger than that. We will need some time to grow and mature. You can’t compare it with the robust TV or the film industry in terms of consumers.

     

    If you go through the ILT report and compare the last two waves, you will notice that Radio One has gained listeners as compared to other stations. We have lost a good amount of listeners when we had to shift our frequency to 94.3 FM. Now we are gaining as the ILT data shows.
    When are you launching your three remaining stations?
    We will soon launch in Ahmedabad, Kolkata and Pune to complete our network of seven stations.
  • ‘Home entertainment is not a commodity but a content- driven business’ : M.N. Kapasi – Excel Home Video MD

    ‘Home entertainment is not a commodity but a content- driven business’ : M.N. Kapasi – Excel Home Video MD

    For Excel Home Video, it is time to expand as big companies like Anil Ambani’s ADAG are planning an entry. The firm recently added MGM to its portfolio of Hollywood studios it has deals with. It is also tapping the TV DVD segment aggressively this year.

     

    Eventually, Excel plans to get into local content as well for the overseas markets. Indiantelevision.com’s Ashwin Pinto caught up with Excel Home Video MD M.N. Kapasi to find out more about the home video market and the company’s growth plans.

     

    Excerpts:

    With how many studios does Excel have deals structured?
    We are the home entertainment licensees for among others Fox, Touchstone, Hit Entertainment and Merchant Ivory Productions. Recently, we added MGM to our catalogue. We also have a lot of independently acquired international content. These include documentaries and special interest products. We also have some children’s titles. We recently launched an educational product called Love And Intimacy.

     

    We have a revenue sharing arrangement with the studios. We also have the master license of Electronic Arts.

    What is the share of Hollywood studios have in the home video market? How is Excel faring and what is the growth rate you are expecting?
    Studies have shown that international content in the home video business has a large share. For Planet M, for instance, 45 per cent of home videos sold are international.

     

    Within this category, Excel has a 40 per cent market share. We expect growth of 25 per cent CAGR.

    Generally how many units do you sell on an average for a title?
    This is difficult to pull out. The industry which is nascent, is still hits-driven. One big hit or a flop, can skew the average. A big title normally does 15000-200000 units. An average performer sells around 10,000 units.

     

    For this year so far, our top sellers have been Dor, Pirates Of The Caribbean: Dead Man’s Chest, Night At The Museum, Cars and The Devil Wears Prada.

    Excel has been scouting for a strategic investor for quite some time. Has anything moved on this front?
    We are always open to this option. A partner would add to the speeding up of our growth. The partner could be forward or backward integrating.

    How has Excel gone about improving its distribution model?
    The addition of our gaming division has strengthened our distribution. That is because every gamer is a movie buff.

     

    We have chased the non traditional distribution model quite aggressively. This includes having a presence in major retail stores which do not have music but have movies and games. A division in our firm actually looks after this aspect.

     

    We do not have baggages. Firms that are older than us came into the home video area with baggages. They had the psyche that home entertainment is more a rental product than a retail one. Our aim was to make the home entertainment space an ownership business rather than just a renting one.

    Could you talk about your Movies and More division that launched last tear?
    It is a retail chain division focussing on films. It also sells games and music. It is run by movie buffs and targets a captive audience. We are now looking at category management tie ups.

     

    Right now there are 14 outlets in Mumbai and Pune. The target is to reach 40 outlets across different cities by the end of the year.

    Now you have ATM machines and online selling companies dealing with DVDs. How is Excel adapting in this changing environment?
    We are a technology savvy firm. We know how online buying happens in most developed countries. We have used the internet in the past for gift ideas, pre order campaigns. The internet works well for this.

    One problem for a Hollywood fan is that only a fraction of the films released in the US are available on home video in India. That is also the case with theatrical releases. Do you see this situation changing or is there not enough demand for Hollywood beyond blockbusters and franchise properties?
    The scope is there to expand. We have tried new things over the last couple of years. We have released direct to video titles. This year we are looking at TV titles.

     

    However the certification process is the one factor that slows us down. Even though home video is a private decision, unlike cinema which is public we still have to get our products certified. The TV show Prison Break has been sitting with the censors for the past seven months.
    ‘We are open to strategic investors. A partner would add to the speeding up of our growth‘

    Could you elaborate more on the television DVD plans?
    This is a very niche segment still in India but there is a market for it. Due to the size of our population even that niche is large. This year we are focussing on this area.

     

    We are looking to have 20 titles here. Six to seven titles are already present in the market. We will launch new seasons of shows like 24, Desperate Housewives, Lost, Alias. Commander In-Chief is another show that we will launch on DVD. TV shows on DVDs in developed markets contributes 22 per cent to home videos revenues. We expect similar growth in India.

    Does Excel have plans to get into the rental business as well?
    Our Movies and More division is capable of adapting to the rental model. We had the idea that it should be like Netflix- a rental, online hybrid. But there are challenges.

     

    As you said, there is a lot of content in the US that we don’t even have a fraction of. You find rental products in the grey market and through parallel imports. For instance, the film Borat has not been rated and is available for rental. If we were to get into rental, then we would have to compete with this. A level playing field does not exist. Having said that, firms like Reliance are setting up rental outlets and we are looking forward to seeing how they fare.

    You mentioned the tie up with Electronic Arts last year for interactive gaming. What progress has been made in this area?
    There were start up issues and the tie up was novel. We had aggressive price points and avoided titles which have parallel imports. The gaming industry like home video, has parallel imports.

     

    We brought in new capabilities. We released the Harry Potter And The Order Of The Phoenix game which was at the same time as the global launch. Next year there will be Fifa 2008. At this point in time we are not talking with Indian game publishers. Electronic Arts realised that we have in-house synergies which would help the games business.

     

    Since we have the market leader in gaming with us, we would like the business to settle down before distributing other firms’ products. The amount of money that Electronic Arts puts into making a game is sometimes equal to a Hollywood blockbuster. That is why their products are at least twice as superior to the competition.

    Packaging is important when it comes to purchasing decisions. What innovations has Excel done recently in this regard to distinguish its products?
    It is around 15 per cent of the effort that we make in product presentation. It is important that packaging connects with the film. We also provide value adds and also in terms of the picture and sound quality. International content has DTS, THX certified sound on them.

     

    There are only two Hindi films that have DTS sound on the DVD. Both of those titles, Lagaan and Parineeta, were released by us. Parineeta was the first Indian DVD to have a director’s commentary.

    What are the major titles coming up?
    We have Pink Panther, Bond titles to launch from MGM. We will be launching the TV show The Simpsons on DVD. We will be releasing films like The Last King Of Scotland, Eragon, Peter Pan Special Edition, Apocalypto.

    In terms of marketing what are the kind of activities that Excel does to create buzz around new titles?
    The home video segment has a limited marketing budget. So we innovate. One programme is exchanging VCD tiles and the consumer only has to pay the difference to get that title in DVD. This has worked well.

     

    We find that this particularly happens for premium classic titles like Titanic, Sound Of Music. We also have a money back guarantee for all our products.

     

    We do tie ups with hardware retailers. So if someone buys a DVD player from a certain retailer there will be our coupons offering a discount. That way it makes it easier for the customer to immediately start a library. In the past we have also done synergy marketing like re-releasing a film on home video when its sequel was being released theatrically.

    There is a lot of talk about low prices of DVDs. Does Excel have plans here to reduce prices which would lead to more sales?
    We have around 30 different price points. We have animation VCDs priced at Rs 50. Then we sell a complete season of a TV show like Lost for Rs 2000. Sometimes we also have different price points for the same product. For instance while the Parineeta DVD was sold at the Rs 300 price point, we came out with a Collectors Edition for the film which cost Rs 600.

     

    This is based on consumer research. I don’t think that home entertainment is a commodity business; it is a content driven business. Do you buy a book just because it costs Rs 30?

     

    We do consumer price point promotions. We have a promotion running with 200 titles. Each is not more than Rs 333. Our dubbed VCDs are cheaper than the English VCDs.

    The challenge in local content is that prices are coming down. How will you cope with this?
    In terms of prices, the feedback we have been getting is that often cheaper priced DVDs have the quality of a VCD. It is the equivalent of buying cheap T-shirts from street vendors that quickly get ruined in the washing machine. Does the consumer only care for a low price and not for quality? When we get a nod to this answer, then we will have a re-look at our strategy.

     

    Right now we do not want to compromise on quality. Parineeta, Corporate and Dor sold over 1,00,000 units at price-points that are 10 times higher compared to low priced DVDs that you refer to. Great content, good quality at the right price-points and penetrative distribution will always have the ‘Consumer’ with it.

     

    We also want to sell Indian content on home video abroad in countries like the US, UK, Australia from next year. The NRI market is underserved in this area. We have already started putting plans in place for this. In those markets the content on home video might be there but the quality is lacking in terms of presentation. We will make sure that our products are available with as many retailers as possible. We, however, do not plan to set up our own stores abroad.

    What are your expansion plans?
    We will have more local content next year. While some film producers have started their own home video label, there are also independent producers who do not have their label. They do not have an outlet as they do not have the economies of scale of putting it in place.

     

    Our aim is to release six to eight films next year. We will scale this up as we go along. We are looking at a revenue sharing model with the producers and we are confident that this will happen as we are transparent in our operations.
  • ‘Line between credibility and sensationalism is becoming thinner ‘ : Anurradha Prasad – B.A.G Films and Media Limited MD

    ‘Line between credibility and sensationalism is becoming thinner ‘ : Anurradha Prasad – B.A.G Films and Media Limited MD

    B.A.G Films & Media Ltd. managing director Anurradha Prasad has her plate full. Having created a long list of popular TV shows, she now has her eyes fixed on FM radio, TV channels, animation and feature films.

    The company has spun separate subsidiary outfits for each of these activities. The news channels will be housed under B.A.G Newsline Network while the non news broadcasting venture will be under B.A.G Glamour.

    FM Radio is under B.A.G Infotainment and is operating under the Radio Dhamaal brand while animation will be via a joint venture with Sieindesign Co.

    In an interview with Indiantelevision.com’s Sibabrata Das, Prasad talks of the changing face of news television with the growth of tabloidisation, the excitement of FM radio and her plans to create a vertically integrated media empire.

    Excerpts:

    Are TV content companies in India under compulsion to foray into broadcasting space as an effort to scale up their business?
    We can go on doing a service job and generate ratings for the broadcasters. But the fundamental problem is that we have no ownership of those shows. So how do we do a forward and backward integration? We were already doing a 360 degree of content; now we have decided to do a 360 degree of media. If we don’t do it now, then when will we? We have taken the organisation into a position of strength. Now is the time to take the leap.

    Is the decision to have control over your destiny a fallout of B.A.G Films losing flagship shows like Sansani as Star News decided to do it themselves?
    It had nothing to do with Star retrenching our shows. It was actually a two-way process and the pullout happened in May-June. We were actually contemplating on our future course of action nine months back and last December we took a call. Having done content, we had learnt a whole gamut of things and we decided to move from B2B to B2C. The things started unfolding when we bid for FM radio stations and created a new company structure. We did our first placement in January.

    Were you looking at a model like Balaji Telefilms where a broadcaster picks up stake in the company and you venture into TV channels space enjoying an assured content supply?
    That is a good business model as it provides a huge element of security. But we wanted to be on our own. Surely, we run a higher risk. But India today is all about challenges. If we don’t take that up right now, we will have slipped an opportunity.

    You mean to say that this is the right timing?
    Media is attracting huge interest and is going to rule the entire consumer process. The whole distribution rejig is also happening. Cas (conditional access system) is being made mandatory, direct-to-home (DTH) platforms are up. Other media vehicles like mobile TV and internet are emerging . The cost paid for distribution is going to drop.

    We have created tried and proven content. We have already set up an infrastructure and have the resource network in place. What we have to do now, and correctly, is marketing, positioning and distribution. For us, it is a very calculative challenge.

    In the broadcasting space, why did you decide to get into the news and lifestyle genre?
    For the last two years, there has been growth in these genres. And they have been eating into the audience share of the general entertainment channels (GECs).

    Are Hindi news channels growing at the cost of the GECs because of crime shows and tabloidisation of news?
    The drama in the news channels is an important driver for getting eyeballs because GECs are totally focused on women. As the GECs provided no alternative for male and young viewers, they went to news channels.

    Won’t it be tough as you are entering at a time when the news market is getting fragmented among 4-5 players?
    The competition is huge and in the process people are going to any level to grab eyeballs. They are expanding the viewership through non fiction entertainment and are getting only TRP-driven. But in the process, they have never marketed their product or channel; they have sold cheap. The truth is that you can have a large number of eyeballs, but you may not necessarily enjoy fat revenues. People who watch news channels are not necessarily what the advertisers want. The perception you have created is very important. Which is why NDTV may have less viewership than some of the competitors but enjoys more revenues than them.

    Isn’t tabloidisation the winning bet for grabbing audiences in the Hindi news space?
    The non fiction entertainment in Hindi news channels has created a new kind of TV. But there are no isms being followed and the editorial staff is getting edgy in this battle for TRPs. We started tabloidisation in India with the properties (Sansani, etc) that we created for Star News. But even in that space, nobody could question our credibility. That is getting lost, especially in the last two years. And some of the good properties which are getting created outside this, are not being marketed or sold properly.

    How could you establish credibility in this genre which thrives on sensationalism?
    When we did Sansani, it was the most credible crime show. We did research and stood by our stories. We provided all the drama but also reflected the interest of the people; several tantriks who were duping people were exposed. More than programming, it was the helpline that added to the credibility. When others took the crime genre, they never did justice to it.

    As a serious organisation which is in the business of news, you can’t be doing certain things which are not credible. That line between credibility and sensationalism is very thin. And it is becoming thinner because of the growth of this genre.

    Do you see this trend growing?
    The cost of making some of this kind of programming, particularly relating to ghosts, is cheap – and there is an audience for this. But I don’t see this going on and on. It is also a happy India that we are in now.
    ‘We plan to make a combined investment of Rs 4 billion in our broadcasting business‘

    Will we see opinionated news in your network?
    We will carry the opinion of the people. We should have the guts to say whatever we want to say. Otherwise, why should we be in the news business?

    How much will you be investing in your Hindi news channel?
    We plan to make a combined investment of Rs 4 billion in our broadcasting business. We are launching four channels – two in the news space, one lifestyle and `Bliss’ which will be all about mind, body and soul. For the news venture, we are pumping in Rs 2.5 billion. While the first will be a general Hindi news channel, we are still strategising on the second one. We expect to launch the Hindi news and lifestyle channels in October-November. We are using the Insat satellite and have applied for a teleport licence.
    Are you diluting 25 per cent stake each in the two broadcast companies, B.A.G Newsline Network and B.A.G Glamour, to raise Rs 2 billion?
    I can’t comment on it.

    Are India Bulls promoter Sameer Gehlaut and Kolkata-based High Growth Distributors individually picking up 12.5 per cent in each of the two companies? Have you raised Rs 1 billion each from them?
    We are a listed company. We can’t comment at this stage.

    How different will the lifestyle channel be?
    We are trying to create a new space. It will be a celebrity-driven, aspirational channel.

    For the FM radio business, would you require to raise fresh capital in B.A.G Infotainment?
    Our fund requirement is Rs 480 million. We have offloaded 10 per cent in the subsidiary company to IDBI Bank. B.A.G Films is investing through internal accruals and we have also tied up debt. We are adequately capitalised.

    Are you in talks with foreign investors?
    We will launch our brand and grow the business. We will create value before we decide to go in for a further dilution.

    When will all the 10 stations get launched?
    We have already launched Hissar and Karnal. Patiala is coming up next, followed by Muzaffarpur, Ranchi and then Jalgaon. We should have launched all our stations by August-September.

    What is the strategy behind bidding for the stations in the northern region and the sugar belt of Maharashtra?
    We believe that the towns we have selected will push for the radio revolution that has come so late in India. And the cities we have selected in the northern region falls within one extended stretch of tourist belt. Ranchi is an upcoming capital while Jabalpur is fully Hindi. In Maharashtra, the sugar belt has money.

    Will your stations have a common distinct personality?
    The tagline is `Hila ke rak de.’ This is because the belt we have selected, particularly in the north, is high on energy. We have trained our RJs accordingly. We will be a mass-based station as we have to first get the radio culture in those places.

    What are the plans for the animation business?
    We have entered into a joint venture with Sieindesign Co, a firm which has a presence in the production, distribution and licensing of animation movies and TV series. We will see this segment growing.

    How do you see growth in the parent company which will house the TV and film production business?
    We will continue to do fiction programming for general entertainment channels as we see no friction there with our new lines of broadcasting business. The scope, in fact, will broaden as a slew of new channels are in the process of being launched.

    We have also launched an international show Yeh Vaada Raha for Ary Digital, Dubai available in Pakistan, UAE, USA and UK. This is our first step towards going international. We are also foraying into Bengali feature Films with Ami,Yaseen aur amaar Madhubala. Directed by Budhadeb Dasgupta, it is set for release in October. All these efforts should give us topline and bottomline growth.
  • ‘PPC plans to pump in Rs 5 billion over three years’ : Shailendra Singh – Percept Holdings joint MD

    ‘PPC plans to pump in Rs 5 billion over three years’ : Shailendra Singh – Percept Holdings joint MD

    These are busy times for Percept Holdings as it plans to build a strong growth engine in the entertainment space. The company has a war chest of Rs 5 billion and 17 movie projects are in pipeline. Talks are also on with Rupert Murdoch’s estranged heir Lachlan Murdoch to sell 30-40 stake in Percept Picture Company.

     

    Murdoch has already entered into a JV to form Percept Talent Management. Percept is also looking at scaling up its sports marketing business.

     

    In an interview with Indiantelevision.com’s Sibabrata Das and Ashwin Pinto, Percept Holdings joint MD Shailendra Singh elaborates on his ambition to become one of the top Bollywood studios in India.

     

    Excerpts:

    Percept has identified entertainment as an important growth engine. Inside entertainment, is it mainly movies?
    In communications, the margins now are pretty tight and competitive. We will continue to give it due attention as it is our bread-and-butter. But we want to also build strong pillars in media and entertainment. We have done on ground events, live shows and celebrity endorsements for the last so many years. We realise that we now have to be aggressive in the movie space as we spot dynamic changes in the marketplace.

    How much is Percept Picture Company (PPC) planning to invest in the venture?
    We are planning to pump in Rs 5 billion over three years. We have already lined up 17 projects and our investment over the next one year will be in the region of Rs 2 billion.

    Will Lachlan Murdoch pick up a stake to support PPC’s growth plans ?
    We are in talks to sell 30-40 per cent stake to Lachlan Murdoch. There is a strong possibility of an association as we share a strategic fit. We have already entered into a 50:50 joint venture with his company Illyria Pty Ltd (Australia) to launch a new initiative in the business of talent management. We believe Murdoch can provide a lot of strategic inputs. Historically, we have always been with partners for strategic rather than pure funding reasons.

    What is the brand of movies that PPC will be making?
    We make movies for all audiences and our ultimate goal is that in 2010 the consumer should identify our films as a PPC film. We want to catch everybody – from a six-year to a 60-year-old adult. That is because we make clean films. We have made a conscious effort that our films should not expose cleavages. India is a traditional society and we have to maintain our values.

    Which is why you have made movies like Hanuman for the kids?
    We have such a large kids population and yet we haven’t put our focus on kids films. So we made Makdee. Hanuman has the drama, romance and climax to succeed – and it did! We are now making a sequel to Hanuman.

     

    Our kids have been growing up on Disney and Hollywood. Is that fair? We have our own mythology, superheroes. PPC plans to come up with two animation films soon. Hanuman’s sequel returns and will be released in November 2007. The second is an international film that will be released in summer 2008.

    Have you locked up with different directors for multiple movies so that you can widen the slate of your offerings?
    We created challenging cinema not just for the kids but also for the metro urban audience. We made MP3, Corporate. We have also touched rural viewers and made movies like Malaamaal Weekly. There is a lot of strategic thinking that goes into filmmaking and it comes from the long years that we have spent towards understanding the consumer. Our relationship with firms like Airtel and Hero Honda among others, have helped us achieve this.

    Percept has been involved in 18 completed films that include Page 3, Corporate, Malamaal Weekly, Home Delivery, Traffic Signal and Hanuman. And the directors we have locked in for multiple movies include Nagesh Kukunoor, Priyadarshan and Madhur Bhandarkar. We lay a lot of focus on directors rather than on stars.

    The perception in the industry is that you hijacked Sahara’s movie business?
    Not really. We made our first film eight years ago called Pyaar Mein Kabhie Kabhie with newcomers. Then we made a movie called Makdee. We made Phir Milenge independently and then gave it to Sahara. When we were involved in the management of running Sahara One, anything that we did on the content side we gave it to Sahara. Even today, we are keen to offer Sahara the rights to movies like Hanuman (sequel) and Malaamaal Weekly (sequel) if they want it.

    But Sahara was left with no contracts with directors?
    Madhur Bhandarkar came to us because he shared a comfortable relationship with us. That is how this industry works. Sahara One’s movie business received a setback as they lost key people in the organisation to TV 18. And let me reinforce this again; we continue to enjoy a strong relationship with Sahara as an agency. They have been our client for over 13 years.

    Do you stick your neck out and make the cinema you believe in?
    There is a huge demand for quality and niche cinema. This is
    risky, but it also helps build a brand. The advantage we have is that we also own P9, an in-house marketing company. And we are not shy of partnering with our competition at this stage. We, for instance, had Adlabs distribute a movie for us. We know that we are playing a tricky game but this is the only way we can produce 12-14 films a year. It is crucial that we are successful at this stage. The ultimate aim is to own the entire value chain.

    Which is why you acquired Spiderman3 to spruce up your distribution?
    We had been waiting for the right product to launch our distribution business; Spiderman3 was obviously the most appropriate. Initially we will be concentrating on Hollywood films as we believe that there is a huge untapped market for them in India but in due course we will start pursuing Bollywood film distribution as an independent business vertical.

     

    The decision is completely demand driven. We believe that while all other aspects of cinema like production, marketing and even exhibition have seen radical changes in recent years, the distribution business continues to be as it was and we are confident that we will be able to make a big difference in this area. The unprecedented success of Spiderman3 is proof that effective distribution can really help create super success.

     

    Currently we have allocated well over $10 million for infrastructure development and acquisition of content for Hollywood and Bollywood distribution. We will be targeting all big Hollywood releases in the year.

    Are you getting into home video?
    We will be launching our home video label by late 2007. It will include all our films but we will be pursuing others as well. We are developing our plans at the moment but there is a likelihood that this could be an acquisition or a joint venture.

     

    The pricing today is competitive. We will keep our DVDs probably in the Rs 60 region. But our plan is to provide some value add; we will give more than a movie. And we are trying to provide a total solution. We recently bought two animation films and a South Indian film for a 360 degree distribution on all platforms. This shows that we have arrived as a brand. It is my dream that PPC will be that kind of a studio where people will see value in the knowledge that we carry as opposed to production details.
    ‘Independent producers will not survive by making two films a year. Getting critical mass fast is the order of the day‘

    Are you planning to produce regional movies?
    We are in the process of setting up a joint venture with one of South India’s largest and most respected studios and that will give us an entry into the south Indian film industry which produces almost as many films as Bollywood.

    Since Sahara contracted you to run their entertainment business for a particular period of time, hasn’t this fuelled your ambition to get into the broadcasting space?
    Owning a channel is not on the radar. It is a tough business and needs years before it can turn profitable. We want to make content for broadcasters and, if asked, help run a channel. We want to be experts at creating content for all platforms whether it is TV, mobile, cinema. We have just launched our mobile content division.

    Is it fair to say that on the TV content side you haven’t made much progress?
    We were running Sahara One as management consultants.
    In the process, we produced television shows and launched a television division for ourselves. Due to our selfish interests, we only focused on supplying content for Sahara One. This included Shobhaa De’s chat and India’s first live game show. We did six shows for Sahara One. We also outsourced to other production houses.

    How has the experience with Sahara One helped you capitalize on the opportunity?
    For us, it was like taking a diploma course at Harvard. Our first task was to build a broadcasting image which was upwardly mobile and young. We changed the name of the channel, its look and logo. We then had to create content that the consumers wanted. This was tough as the channel was carrying a hangover of the past of Sahara Manoranjan.

     

    The second stage was to appropriately monetise the current library. We had to clean up several film contracts that were done before we took over. We had to do a lot of fire fighting.

     

    After that, we began a new era. We brought into our basket several films like Page Three. Sahara only lost money on Home Delivery.

     

    We also strategically launched Filmy and we created a unique space in a market where there was already a clutter of three other Hindi movie channels (Zee Cinema, Max, Star Gold with B4U not making much impact).
    The common opinion is that Percept gained at the cost of Sahara?
    The market cap of Sahara One has gone up after we took charge. Investors also came in.

    How do you plan to make a mark in the TV content business?
    We are getting back as far as TV content is concerned. The market thought that we are an in-house production company for Sahara. We had to change that perception. It took us some time to do that.

     

    To go big we need to get into formats. In India, we think of big ideas and execute small. We are trying to create formats that we can produce here and then get it exported globally.
    Do you see a studio system emerging?
    Absolutely. You will have six top studios including Yash Raj Films, Adlabs, UTV and PPC. You need the muscle to play the game. Independent producers will not survive by making two films a year. Getting critical mass fast is the order of the day.

    In the field of sports marketing, do you see any alternate emerging to cricket?
    There is no true second sport challenging cricket. I am confident that the sponsors, media and fans will bring cricket back.

     

    The issue is that when the World Cup debacle took place, people wondered if they should support other disciplines. Is putting all the eggs in one basket good for business? That thinking did happen. The BCCI should have had a chat with the sponsors to sort out the issues concerning the future of cricket.

    With stars like Sachin, Saurav, Dravid and Kumble probably retiring at the same time, how will it affect money coming in from sponsors?
    You create the next level. As brand marketers, that is what we do. You create Dhoni, Yuvraj Singh. The fans and marketers create the next level with the help of new talent that is seen as being cool.

     

    When we thought that Shah Rukh was God, Hritik came into the picture. Clients need to have brand consultants who will tell them that there is an age and a time to position yourselves in a certain manner.

    Are you looking at sports marketing for other sports?
    We are looking at soccer and baseball. We have identified four corporates and we are talking to them about the benefits of being associated with these sports. It is a tough task as the federations do not want it. The facilities at the stadiums are awful.

    Why baseball?
    Baseball is about a ball and bat. It is an American sport and we have a hangover for all things American. It is a throw ball sport and anyone can do it. The challenge is to make it commercially successful. We have bought some rights. We are looking at a 10-15 year programme which is interesting. We can play baseball in existing cricket stadiums at night. Infrastructure is not an issue.

    What are the expansion plans for Percept Talent Management (PTM) after Lachlan Murdoch has bought a stake in the company?
    PTM is the talent management wing of Percept Holdings. PTM will identify, acquire raw talent, and give them the much needed professional edge required to catapult their career into the big league. PTM will ensure that they provide effective and efficient turnkey solutions to their talents. I see huge potential for this business going forward. We will leverage the great depth of talent resident in India and abroad through this partnership with Lachlan Murdoch.

    How do you see yourself creating an entertainment empire? Will it rest on movie as the backbone?
    Entertainment is not just Bollywood. Cricket and Bollywood are huge in India. But there is so much more happening with the advanced technology these days – gaming, mobiles, retail, exhibitions etc. We will look at various opportunities based on our consumer research and feedback and look to providing services at various touch points. For example, Percept Holdings plans to bring a unique Bollywood experience (cafe, rides, Bollywood tours, 3D gaming booth etc) for Indian filmbuffs. We’ll offer a slice of what Brand Bollywood could be like in a 50,000-100,000 square feet area in Mumbai. We also have a separate vertical at PDM called PDM-Entertainment which will create and IPR new entertainment properties for clients.
  • Moser Baer entertainment business CEO Harish Dayani : Harish Dayani- Moser Baer entertainment business CEO

    Moser Baer entertainment business CEO Harish Dayani : Harish Dayani- Moser Baer entertainment business CEO

    Moser Baer is shaking up the home video market with its low pricing. While VCDs are available at Rs 28, DVDs are priced at Rs 34.

     

    Will the market dynamics change as new players like Adlabs hatch plans to enter the business?

     

    In an interview with Indiantelevision.com’s Sibabrata Das and Ashwin Pinto, Moser Baer entertainment business CEO Harish Dayani elaborates on how the home video market will never be the same.

     

    Excerpts:

    Why did Moser Baer decide to get into the entertainment and home video market?
    Moser Baer is the world’s second largest optical storage manufacturer. As we make 10 million discs a day, we have economies of scale. We can manufacture a disc at a price that not too many people in the world can match. Having such a strong backend in this form of business, we were somewhere in the commodity space. The obvious forward integration for us was to add content. In India, there is nothing like entertainment as far as replication on a product like a disc is concerned. This is where the whole thing started around a year ago – and we had the money to do it.

    When several home video players like Time have folded up, what made you think that Moser Baer could fix it right?
    We felt there were gaps in the industry which we could fill. The home video market is fragmented and has local players. We saw an opportunity in this to have a pan India presence. Distribution is another area that needed attention. Also, consumer branding is important.

    How did you take care of the content?
    We realized that if we were to be a major player, we needed to own content on a large scale. We acquired 7000 movie titles and have become the largest content owner, controlling one-third of the entire film production chain. We picked up content from different sources (including from Time). We decided to be the first company that deals with home video in all languages.

    Isn’t regional films a significant component of this?
    We have close to 1800 Hindi titles. The rest is regional – Tamil, Telugu, Marathi, Punjabi, etc. Besides, we have around 600 international titles sourced mainly from independent producers.

    But how do you source top content when the big Bollywood studios like Yash Raj Films have set up their own home video labels?
    We simply can’t. But there are many who don’t have their home video labels. And we ourselves will be in the film production business.

    Pricing seems to be an important strategy for Moser Baer. How much volumes do you have to reach to make this a profitable business model?
    People say that Moser Baer sells products at a low price. For us, price was the outcome of other factors; it definitely was not the starting point. Surely, we wanted to have a pricing that the masses would find attractive. So we priced DVDs at Rs 34 and VCDs at Rs 28. And it is not that we are operating under negative margins.

    When you start buying big Bollywood movies and have to pay a high content cost, will your operating margins not puncture?
    We have all kinds of movies. For me, a 1950 film is as important as Munnabhai as it will generate a certain amount of interest among a certain section of audience and be commercially viable. The concept of old and new movies are irrelevant. In terms of recent titles, we have films like Life Mein Kabhie Kabhie, Ek Chalis Ki Last Local. Apne has yet to come. We also have two films of Venus.

    How do you align with the international studios as they are already having exclusive distribution deals with the other home video players?
    We will be busy for a year with the amount of titles that we have. Even if we release 30 titles a day, it will take me over a year and I am not a magician. In terms of tying up with big international studios, the question is in terms of adding value. We are setting up our business. When we have established ourselves, then we can talk to other players with confidence and authority. We have to demonstrate how our business model works.

    How are you sprucing up your distribution network?
    When we were toying with the idea of entering into the home video market, we realized that we could have a strong backend but that does not necessarily make for a business model. Home video distribution, or for that matter the entire entertainment distribution, is wholesale-oriented. Entertainment firms have a few select group of wholesalers; what the wholesalers do after they get the product, nobody knows. We felt the need for a distribution network that is similar to an FMCG system. We wanted to have our own distributors spread across the country.

     

    Most home video businesses have 20-40 distributors across the country. We have 500. We feel that every town must have a distributor. We do not want to depend on a wholesaler in a large town who will cater to a small town. We tell distributors to give the product to retailers in their area. Entertainment product in this country is available in some 20,000 stores. Our product is available in 100,000 shops and we are just two months old. The aim is to take this to a chain of 300,000.

    What are the margins you are offering to the distributors?
    The wholesale distributor has a five per cent margin while the retailer enjoys a 25 per cent margin.
    ‘Home video market is fragmented and has local players. We saw an opportunity in this to have a pan India presence. We decided to be the first company that deals with home video in all languages‘

    How crucial is branding as part of Moser Baer’s strategy?
    The myth in the entertainment industry is that people just go and buy titles at any price and it does not matter who is selling them. We want to break that myth. Our message is that Moser Baer is adding a lot of value in terms of the quality of manufacture. We have a certain image. It is not just Munnabhai MBBS; it is Moser Baer Munabhai MBBS. It is important that we reinforce faith in our product in the mind of the consumers.

    Will you have your own stores as part of the branding exercise?
    We have two – one in Pondicherry and the other in Ahmedabad. We will have 50 by the end of the year and 250 by the end of 2008.

    How has the deal with Pyramid Saimira helped expand your reach?
    Pyramid Saimira makes and distributes films. We have the first right of refusal for home video rights. They also have a chain of theatres and have deals with malls. We are looking at opening Moser Baer franchisee stalls there. Our products will be available in the vicinity where people come. We are also talking to tie up with other theatre and mall owners.

    Are you looking at entering the rental market?
    Firstly, this is an unauthorised business. If someone buys a Moser Baer disc for commercial exploitation, then it is against the law. We do not have plans to enter the rental business. However, we are not trying to discourage this. If somebody approaches us to do business with them, we would consider licensing our content.

    How about getting into alliances with broadcasters so that you can acquire wholesome rights?
    We look at satellite content only if we find that we are not getting the home video rights. Do I need to align with other players? If I have 7000 titles and another firm comes up to me and says that he also has 7000 titles, then we might join hands to tackle the market together. This way we can take our own decisions that would be best for us.

    What are the plans on the film production front?
    We have signed a co-production deal with filmmaker Anubhav Sinha for a basket of 12 movies. We have also signed up with Anthony D’Souza (Ishaan) and Priyadarshan. We are also negotiating with four big filmmakers. The first movie to kick off, though, is Shaurya.

     

    We will also produce movies that we will release for the home video market. This should happen sooner than later. We also plan to get into the film distribution business but at a later stage.
    Are you looking at producing regional language movies?
    We have signed with Prakash Raj for three films in Tamil and are also looking at other languages. Our eventual aim is to make films in all languages.

    How much are you pumping in for your entertainment business?
    We intend to invest Rs 5 billion over three years. A major chunk of this, of course, will be towards the home video business.
    With low pricing, what growth can we expect in the home video sector?
    Our estimate is that it would grow at four to five times the current size in three years. We want to have a 50 per cent share of this.

    Is the home video market dynamics up for total change?
    Will consumers look at our price and wonder why other titles from other firms are priced much higher? Possibly. That is for them to decide. Some players may charge higher but eventually the price will come down from where it is now for everybody. I don’t believe premium or popular content can command a three figure price. The home video business model will be viable for those who are able to stay around in it.

    You have moved into HD DVD. Won’t the conflict between the two incompatible formats Blu Ray and HD DVD prevent quick uptake of the technology?
    This is still five years away from happening in India. VCD players still dominate, though the number of DVD homes is growing.

    Does Moser Baer nurture ambitions of eventually becoming a studio?
    Consolidation is happening in the entertainment space across the globe. This will also happen in India. Corporates are entering into the movie business and aggregation is taking place. We are also trying to be in the different entertainment value chains.
  • ‘We have stepped up work on digitalization for Prasar Bharati’ : Baljit Singh Lalli – Prasar Bharati CEO

    ‘We have stepped up work on digitalization for Prasar Bharati’ : Baljit Singh Lalli – Prasar Bharati CEO

    Baljit Singh Lalli, who took charge as chief executive officer of Prasar Bharati at the end of December 2006, is an Indian Administrative Service officer of the 1971 batch from the Uttar Pradesh cadre with vast administrative and managerial experience spanning over three decades.

     

    In an interview to indiantelevision.com’s BB Nagpal, Lalli answered various questions relating to the falling revenue of Doordarshan, the cricket telecast rights controversies and other issues.

     

    Excerpts:

    Doordarshan’s gross revenue fell by about Rs 1300 million to RS 8,182.2 million in 2006-07, as compared to RS 9,469.6 million in 2005-06. But the gross revenue of All India Radio rose marginally by RS 148.2 million to RS 2,836.5 million in the same period. To what do you attribute these losses?
    As you know, Doordarshan has lost around RS 3400 million because it did not have the telecast rights for cricket. If you do not count what we lost because of cricket, the revenues of Doordarshan have actually gone up as far as other programmes go. But we have already made up RS 2 billion. On the other hand, AIR earned just under RS 96.4 million from the World Cup 2007.

    Why is it that Prasar Bharati wakes up so late to bid for the cricket telecast rights and then has to pass a mandatory sharing legislation?
    I cannot answer that because it happened before I joined. But you must understand that the amount for bidding for rights for up to five years is more than what a public broadcaster can afford. As far as the legislation is concerned, it is necessary to understand that the Uplinking and Downlinking Guidelines issued in November 2005 were clear on mandatory sharing of rights for terrestrial showing, but were being violated by the rights holders.

    For a long time, Prasar Bharati has been talking of strengthening its marketing strategy, but the results do not seem to be showing?
    That is not true. As I said, we have made up a lot of the losses caused because of not having telecast rights. We have now taken steps to streamline the marketing procedures. Also, the attempt is to bring in greater synergy between All India Radio and Doordarshan. We have set up a committee and sent out new proposals to our marketing people in Mumbai, Kolkata, Chennai, Guwahati and other places.

     

    AIR has already made more than five times the projected revenue from cricket. You should also not forget that Prasar Bharati is a public broadcaster and cannot resort to generating revenues the way some other channels can. At the same time, we are now having closer monitoring of the marketing activity, and are also recruiting professionals for the work.

    A Comptroller and Auditor General Report talks of losses on various counts, including arbitrary fixation of advertisement rates for feature films to favour certain filmmakers. How will you ensure proper checks and balances?
    I have not seen the report so far, and in any case it relates to 2004-05. We have now put a new system in place for acquiring films. We will now be able to get the best films at competitive rates, through a policy that will be completely transparent. The films will be selected in good time. The Grading Committee in Doordarshan will then categorise the films as specified in the policy. No individual producer or filmmaker will be shown favours of any kind.

    An Acquisition Policy announced by Doordarshan to acquire quality programmes has reportedly led to scams including submission of duplicate or blank tapes?
    Yes, I am aware of this case. The matter relates to October-November last year when new programmes were being acquired for the DD Urdu Channel. Our internal inquiry showed that around 250 blank tapes had been submitted along with other programmes. A committee of officers in Doordarshan is inquiring into the matter and would be able to identify those guilty and action would be taken, irrespective of whether it is only outside producers or someone within Doordarshan. As no money had been paid to any producers so far, there is no question of any loss of revenue on account of this. I am in principle opposed to acquiring old programmes, and this had been done under a policy announced before I joined.

    But this has already led to an order for transfer of senior officers in Doordarshan who have been in their posts for more than six years?
    That order has nothing to do with the tapes. In fact, I issued that general order separately for transfer at Supervisory levels. And all sections of employees have welcomed it. The section of employees most affected by this, the Programme Staff Association of AIR and DD, has sent me a letter welcoming this decision.

    You had announced earlier that Prasar Bharati would switchover to the Indian satellite Insat-4B by June. Is that work on schedule and how many transponders will you be using?
    Yes, we are shifting DD Direct, the Direct-to-Home service, to the Insat-4B from 1 June. We have been assured by the Indian Space Research Organisation that we will not face any shortage of transponders. We will initially be using five transponders but can ask for more whenever needed.

     

    The shift from the Netherlands-based NSS 6 will not only mean savings in foreign exchange, but also clarity in picture since the Indian satellite is better placed than the European satellite. Prasar Bharati pays NSS around RS 225 million annually. The initiative was motivated by patriotic instincts. Insat-4B is located in a geostationary orbit of 93.5 degrees East, which is closer to Indian than NSS 6, which is located at 95 degrees East.

    What about the commitment by Isro to Sun TV because of the loss of Insat-4C?
    I am aware of the reported commitment by Isro, but this will not affect DD’s requirement. The Insat-4B has 12 KU band and as many C band transponders for communication and broadcasting services. DD Direct will be able to beam up to 10 channels from each transponder. It presently beams around 32 channels of which 26 are its own, but this number is expected to go up to 50 with private FTA channels becoming available.

    What are you doing to effect a smooth transition to Insat-4B?
    We have held meetings with cable operators, hardware manufacturers and multi system operators to familiarize them with the changes that will have to be made to reach out to 4.8 million viewers of the free-to-air DD Direct. Doordarshan has circulated a four-page brochure to educate viewers and service providers about the changes to be made to their dish antennae and in the set top boxes. Though the service providers will make these changes, this can be done even by subscribers themselves. Each antenna has to be rotated (with the person standing behind the dish antenna) clockwise by 1.5 degrees to the right and tilted up by 1.5 degrees.

     

    DD’s DTH would be available across five transponders in the KU Band on Insat-4B, on the frequencies 10990, 11070, 11150, 11490 and 11570 MHz on vertical polarisation and a uniform symbol rate of 27500 ksps.
    ‘We have now taken steps to streamline the marketing procedures. Also, the attempt is to bring in greater synergy between All India Radio and Doordarshan‘

    Will DD Direct continue to be Free-to-air?
    For the present, yes. We do not see it becoming encrypted in the near future.

    The Planning Commission’s Sub-Group on ‘Going Digital’ has recommended that Doordarshan should commence digital terrestrial transmission by the 2010 Commonwealth Games, and should have a phased approach for going digital covering all the seven mega cities by 2011 in the first phase and the rest of the country by 2013.
    Yes, the Report had also recommended a group chaired by me with some private broadcasters like Star, Zee, Sony, Eenadu etc. and their major MSOs to examine an 11-stage process. We will also consider introduction of HDTV in a phased manner starting from Delhi (2008-09), extending it to all the six mega cities to ensure coverage of Commonwealth Games in HDTV format in 2010.

     

    We have made some proposals which are with the Planning Commission. In fact, this is a major thrust area in the Eleventh Five-Year Plan. I personally met officials of the Planning Commission recently and gave a projection of RS 5000 crore (RS 50 billion).

     

    Has Prasar Bharati begun working on plans for optimum coverage of the Commonwealth Games?
    Yes. In fact, I have had one meeting with Mr Suresh Kalmadi, President of the Indian Olympic Association and Chairman of the Organising Committee for the Games, and told him we will need financial support for adequate coverage of the Games. I will be meeting him again shortly.

    A Technical Group had been set up to examine Encryption Mandate for DD signals, particularly for cricket telecasts. There appears to be a lot of disagreement among members of the Group on the issue. What is the position about this?
    Yes, the Ministry had set up a Group headed by AIR Director General Brajeshwar Singh to go into the issue. The report of the Group has already been submitted to the Information and Broadcasting Ministry, and perhaps you should be asking the question there. As far as I know, the report was unanimous.

    Prasar Bharati had announced a policy on telecasting series based on Indian Classics. What is the progress on that front?
    The work is going as planned. The Committee met recently and cleared twenty to twenty-five proposals related to Hindi, Punjabi, Bangla, Gujarati and Telugu classics. Filmmakers like MS Sathyu, Gulzar and Muzaffar Ali have been commissioned for some of the classics.

    The concerned Parliamentary Standing Committee has expressed its displeasure over the progress in Digitalisation and building of archives for Prasar Bharati?
    We have stepped up the work on digitalization. We will be able to work even after the Archives are shifted to the Central Production Centre Building in Sirifort Village. This will be done in the next two or three months after DD News shifts to the DD Building in the Mandi House area. Meanwhile, digitalization of broadcasting in the public broadcaster would be completed by 2017. Out of the 64 Doordarshan studio centers, 17 had been fully digitalized while another 30 were partly digitalized.

    DD India is available via Satellite all over the world, but there are few takers even in countries with large Indian population. DD has had to tie up with local cable operators in the United Kingdom recently. What are you doing to popularized Indian channels in other countries?
    Doordarshan has launched two channels DD India and DD News in the United Kingdom with the help of Rayat Television Enterprises Ltd. following an agreement with Prasar Bharati for the distribution of these channels in UK for a period of five years.

     

    DD India has seven Hindi and six English news bulletins daily, while DD News has 19 English and 24 Hindi news bulletins daily respectively. Although both these satellite channels are free to air and could be seen anywhere in the world, this is the second time that Prasar Bharati has entered into an agreement with a distributor to ensure the channels reach viewers’ homes.

     

    Prasar Bharati also has a similar arrangement in the United States with companies owned by persons of Indian origin. The aim will also be to reach out in the Middle East, Malaysia, the rest of Europe, Canada and so on, and the broadcaster has invited ‘Expressions of Interest’ from entrepreneurs in these countries.

    Prasar Bharati Act has provision for Broadcasting Council which never came into existence. Will this become redundant under the new Bill that provides for a Regulatory Authority?
    I think you should ask the Ministry to answer that question. I can only tell you that we have urged the Ministry to strengthen our hands, and have asked for extra funds to be invested in public service broadcasting.

    Doordarshan has launched the Digital Video Broadcasting – Handheld (DVB-H) as a Pilot Project in Delhi. What about other cities?
    The Pilot Project is aimed at reaching mobile phones within a radius of 12 kilometers of the Doordarshan television tower on Parliament Street in New Delhi. After watching the outcome of the launch of this service in Delhi, the system will be replicated in Mumbai, Kolkata, and Chennai. The service is initially free to air and the channels available are DD National (DD 1), DD News, DD Bharati, DD Sports, DD Urdu, DD Punjabi, DD Bangla and DD Podhigai. The scheme is ‘vendor neutral’ and any mobile provider with a compatible handset can download the signals and transmit them. I hope the number of channels would be raised to ten to 15 in the next few months.

    There have been promises for increasing a scientific temper in the country through the media. The private channels have not done much, and DD’s efforts in the initial years also appear to have come to a stop?
    That is not true. We recently launched Mike Pandey’s series at an appropriate time, and have commissioned the Bedi Brothers to make a new series. We have finalised an MoU with Vigyan Prasar of the Department of Science and Technology to encourage a scientific temper. Programmes have been made earlier also for Science Channel which is a joint venture of Isro and Vigyan Prasar under Department of Science and Technology (DST). Till August 2006, 60 episodes have been transmitted. The programmes are being transmitted on DD-1 as a 30-minute capsule, and programmes are aimed at children in the age group 12 to 18.

    What specific programmes are being telecast to mark 150 years of the freedom struggle?
    DD has identified a series of programmes from its own archives, like Bharat Ek Khoj by Shyam Benegal based on Jawaharlal Nehru’s The Discovery of India, Swaraj by Manju Singh, and Colours of Freedom by Buddhadeb Dasgupta. DD has also commenced telecast of Dr Girish Karnad’s series Swarajnama.
  • ‘We see DT&L exploding over the next few years as an advertising category and a wish category’ : Aditya Tripathi- Discovery lifestyle networks VP

    ‘We see DT&L exploding over the next few years as an advertising category and a wish category’ : Aditya Tripathi- Discovery lifestyle networks VP

    Discovery Travel and Living VP -lifestyle networks Aditya Tripathi was in Bangalore to showcase the channel’s new local show ‘A Matter of Taste’ hosted by television anchor Vir Sanghvi. The show follows Sanghvi as he embarks on on a culinary journey to explore Indian tastes, debunk myths and discover the finest in Indian food and drink.

    Indiantelevision.com’s Tarachand Wanvari caught up with Tripathi to get a lowdown on the localisation plans, the challenges of shooting in India and client customisation.

    Excerpts:

    How would you describe the progress that Discovery has made this year?
    Discovery is growing really well. In the first 13 weeks of this calendar year, we’ve beaten everybody. That’s all English news, all English movies, all English music channels – MTV et al.

    Would this apply to Discovery alone or other channels – Animal Planet and Discovery Travel & Living (DTL)?
    This is Discovery alone. There is not even a comparison with the other channel in our genre (NGC).

    What’s new in the programming line-up on DTL, especially from India?
    The big one is of course A Matter of Taste with Vir Sanghvi. We are working on a couple of other programmes also. There’s one on Indian fashion and style which will come out towards the end of the year.

    Then there’s one based on a hotel (Taj Mahal Hotel in Mumbai) which will go on air by July or so, this year. We have actually gone into a hotel and spent three months there. It covers the hotel, about how a hotel functions. When you go to the reception of a hotel, some pretty girl smiles at you, they give you a room key, you go up, actually there are lots of people working behind the scenes that you don’t see. So how does the hotel function?

    The channel is an international channel and the intention has always been that it will be an international channel with some 15-20 per cent Indian content. The majority of the programming will always come from outside. You are looking at the Indian who wants to see the world, not an insular person who wants to see only content about India.

    And what about the fashion and style show that you mentioned?
    We have already started working on that. We have taken a well known fashion designer and we are working with him on this show. I’ll share the name with you when the show is closer to being completed.

    In this series we are traveling around India and outside the country also. We look at rural fashion, we look at pop art, we look at cheap fashion, it’s not only the high haute couture and the expensive fashion. We are at looking at the Indian style sensibilities across the board. And not only in clothes, in interiors, in hotels, in all kinds of things. It’s a very interesting show, but we have shot only two episodes right now, so we are still working on it.

    Some of the episodes will be location specific, so we’ll look at a part of the country. Other episodes will be following a story in preparing for a fashion show.

    How many episodes have you planned for? What about the sponsors for the series?
    It will be a 13-episode series. We’ve not yet lined up sponsors for the moment. We’ll wait till we have a little more polished stuff to show them. We’ve just shot two episodes. The concept has been talked about to a number of people who are interested.

    So is it mainly the garment industry that is interested?
    No, because it’s not only clothes and that kind of fashion. We’ve got interest from car brands, we’ve got interests from mobile phone companies, paints, even those categories. Then jewelry and accessories will also come in.

    Your first local show was ‘The Great Indian Wedding’ where one episode was aired. What is the status on that?
    Depending upon the press you read, we were covering so many things. According to The Times of India, we were covering the Bachchan-Ash wedding also, but that’s not true.

    We have created a brand, but we want to find very special weddings. For a lot of weddings that are special, either the people are not very comfortable to be in the public domain or there are a number of weddings where the people are scared of the tax authorities. And then there are some people who are very conscious of publicity and keen to get it, but it may not be a very classy wedding.

    We are going to keep this as an irregular one-off show. Every time there’s a wedding, we approach the family and if we can shoot, we’ll take it forward from there. But the original plan was to do a series of many weddings, we’ve decided not to do that.

    What are the challenges that you face while making something out of India?
    One challenge that we have is to convince our colleagues in other parts of the world that it will be a good story. Because we see now on Discovery channel, on our own channel DT&L there are now many programmes that are being made out of India. There’s a series like the one by Anthony Bourdain, or any of these international shows, they come and make one or two episodes out of India, but they come with their foreign crew, foreign anchor and cameramen and they come and shoot here and they go back and shoot the rest of the series everywhere.

    We are in the process of convincing them that an Indian production unit can make a show just as well, plus, we make them at a lower cost. The point is that the storytelling will be as good, the production quality will be as good. That’s one of the main challenges that we face.

    Could you shed light on the logistical challenges?
    Shooting a series which is not based in a studio is always a challenge. For instance, each half hour episode of A Matter of Taste has involved seven to eight days of travelling and shooting around different cities, plus the dubbing and editing and other work. For each episode we’ll go to three or four cities. The logistics for that are challenging, but it’s not that they would be any different anywhere else.
    What about your programmes that are focused on communities such as the drinking community – The Thirsty Traveller?
    That is one guy, an anchor called Kevin Brauch who travels around the world, like you have food programs and travel programs, his program is to explore the drinking culture and the different local beverages. That’s a show that has been very popular.

    Is anything coming out of India on those lines?
    There was talk that they would come to India. I was in touch with the production company and there was a little problem with getting permission. So we are now working with them to try and get an episode out of India.

    Won’t there be conflict with the authorities on that? After all alcoholic drinks are products that you can’t even advertise about in India?
    Well, all that we have heard so far is that they had permission problems. We are not sure what they are. We are working with them to find out.

    What is the situation as far as advertising is concerned?
    Of the English entertainment channels including movies, we have sold more inventory, more secondage than any of the others in the last year. That is movies, Star World, Zee Café…

    But those are a different genres altogether?
    We are the only lifestyle channel. When we launched two and a half years ago, Zoom, Star One VH1 – we were launching at the same time and all four were saying that we are lifestyle. Now I think that all the others have changed their formula.

    Certainly among the advertising community, we are recognised as the only lifestyle channel. But being a single channel in a genre that is not defined by anyone, it’s very difficult to define, so we compare ourselves with English entertainment. Because generally the values of the programming are the same, it’s kind of an unwinding programme that you watch to entertain.
    ‘Depending upon the press you read, we were covering so many things. According to The Times of India, we were covering the Bachchan-Ash wedding also, but that’s not true.‘

    So have your advertiser numbers improved from the 236 brands that you had said sometime ago?
    Yes. The number of brands keep going up. The very interesting thing about the channel is that from the day we launched, actually even before we launched, we said that we’d be an upscale channel and we are trying to fill a niche for the advertiser of upscale products.

    Today, traditionally a lot of advertisers for upscale products are on print. They are not on TV, because most channels are not focused. So we said that we will come in and reach those kinds of advertisers. So Pepsi will not advertise on my channel, but Diet Pepsi will advertise or Crush will advertise. Now Airtel no longer advertises on our channel for their standard connections because they are much more of a mass product, but Blackberry Pearl will come on our channel, Samsung LCD screens will come on our channel. The battle for us is not to get as many advertisers as we can, the battle is to keep that focus.
    To return to the localisation issue how many of the Indian programmes are being broadcast abroad? Where do you get the best response from?
    In Discovery the way this works is that all the shows that we make here are offered to our colleagues and then it’s up to them to buy them. So our last production Indian Rendezvous is there outside the country, in UK, this was a six-episode series and all the six episodes will be there. In the case of A Matter of Taste which is now complete, we’ll be sending it to them. I am confident that this will also air around the world.

    Singapore, which is the whole of Asia region and the UK, these are the places where there is maximum affinity. But I am hoping that going forward the US will also start buying into the programming. Right now it is UK more than the rest of Europe. But now that India is on the top of mind for everyone around the world, I am expecting that our spread will be greater than it is now.
    As far as your international content is concerned and programme blocks, is there anything special happening?
    One show that we are looking forward to is Queer Eye For The Straight Guy which we will introduce later this year. This is a makeover show for men.

    Each episode features a new candidate usually a straight/heterosexual man ready to be culturally transformed. Each candidate prepares for a special event and receives generous guidance from each Fab Five member in their respective categories of expertise. Candidates are prepared for such events as a marriage proposal, a first dinner with a girlfriend’s parents, and a backyard barbecue.

    We have a women’s hour. However our viewership is homogeneous. So we have not focussed on building programme blocks.
    Have you done any further client customisation like you did for HSBC some time ago and what has been the response to such efforts? How effective has customization been for your clients?
    We do a lot of client customisation where we package programs. We had a Monday to Friday programme Off to the Caribbean with Pepsi Gold around the World Cup time. What we do is to pick up a selection of programmes.

    A few weeks ago we did something for HT Mint, a very upscale targeting was required, so we did a series that we already had for Europe. We packaged that as Mint Money Mantras. With the travel site yatra.scom we did Amazing Yatras.

    That kind of customisation happens all the time. In terms of product integration, we haven’t done that yet, but are looking at doing that as well. In terms of effectiveness the client keeps on coming back for more so obviously it is quite effective for them.
    Who are your repeat clients?
    Pepsi is a repeat client. They have come back on various occasions and we keep getting new clients also. So it’s obviously effective.

    What marketing activities does the channel do to create awareness?
    We don’t do a lot of marketing. Word of mouth has helped us a lot. The fact is that our target audience is tough to reach through the traditional mass media. Having said that, we did put in some ads in newspapers to create awareness about A Matter Of Taste.

    Discovery Lifestyle launched a couple of channels in Malaysia recently. Any plans to bring them into India?
    Not at the moment. While DTH and digital cable are growing this is not immediately on our radar.

    Who are the big advertisers from Bangalore ?
    Yeah, I do, to meet the advertisers. There’s Britannia, then you’ve got ITC here, they are the big ones. Titan, Tanishq, IBM-Lenovo, etc. ING is a big client, Kingfisher Airlines, lot of these are our clients. In the case of the IT software companies, it’s more of a B2B arrangement, so we don’t have these as our clients.

    Could you offer your views on the television scene in India?
    These are exciting times. Well, every time you open a website or a newspaper you see channels being launched left, right and center. Every one is launching channels. You’ve reported that Sun has started a Kids channel.

    So how long do you think these can be sustained?
    I’ve been working with media for a long time now. Even in the mid nineties, people were saying that so many channels are being launched and they won’t be able to sustain, but no high profile channel has really gone down. They are still able to financially keep going. Obviously there is a lot of money following the channels. You know especially when distribution money is not very substantial. Around the world, channels run on distribution money, the subscription route. If that is not substantial, then it’s very difficult.

    Finally where do you see DT&L over the next three years?
    We launched about two and a half years ago to fit into the upscale Indian. We were hoping to create a new category of advertisers. We’ve had success so far in shifting and attracting the TV advertisers. One thing that hasn’t happened yet is that a lot of print only advertisers haven’t yet moved onto TV. That’s one thing that we expect to do a lot on.

    As the economy booms, as more tourists start travelling, we are very well paced and we really see this channel as an advertising category and a wish category exploding over the next few years. I am very proud of what we have done so far. We are ahead of our advertising and revenue targets, but we expect that the next two or three years will really be boom time for us. The operations here are profitable, but we never disclose country specific breakup details.
  • We are confident of achieving a turnover of Rs 4.5 billion in the digital audio video segment by year end : Moon B Shin- LG managing director

    We are confident of achieving a turnover of Rs 4.5 billion in the digital audio video segment by year end : Moon B Shin- LG managing director

    Electronics major LG Electronics India Ltd (LGIL) recently announced their foray and focus on digital audio video products in Bangalore. LG showcased their latest offerings in the USA – the Super Multi Blue– a product they claim as the world’s first dual high definition player.

    LGIL managing director and LG Group president South West Asia Moon B Shin took on the reins of Indian operations in January 2007. A core member of the LG team, Shin is traveling over 100 countries including the Middle East, Africa and India.

    In an exclusive interview with Indiantelevision.com’s Tarachand Wanvari Shin highlights LG’s plans for India, with a special emphasis on the digital audio video segment.

    Excerpts:

    LGIL has a turnover of Rs 82.5 billion. Considering that the audio-video segment is expected to account for just Rs 4.5 billion, how are you planning to push your presence in this category?
    I know that comparatively this is a small amount, but these are the products that we expect good growth from. In the video category, we are placed number one with 26 per cent market share, Phillips is next with 22 per cent share. In audio we are far behind, we are around 13 per cent I think there number one is Sony and number two is Phillips because our presence at the moment is very small and we set the targets and these are the areas that we have to pickup. We have to beat Sony and Phillips. We have really worked very hard, product planning and selling, marketing for the last couple of years. We have come with really very new range of products.

    Phillips and Sony are strong in the cassette and audio tapes analog space. You don’t seem to have launched any products in that category?
    Today we launched MP3, MP4, the portable DVD player, the car audio system – from the lower end segment to the high-end, we have a really full range. That analog tape market is the rural market and is coming down. Our focus is on digital.

    How do your other products stack up against competition?
    Overall in India the presence is quite sound. In consumer electronics and home appliances we are around 28-29 per cent. For GSM this year we are going to sell around five million sets and we are going to reach minimum revenues of US$ 200million from this stream. AV is around US$ 100million. We expect a total revenue of Rs 95 billion or around US$ 2.2 billion, so the 300 million translates to a little less than 15 per cent of our overall revenues.

    How important is India as a market for LG?
    India accounts for around 6 per cent share of the global revenues. India is tremendously important for LG. By 2010, our target is to increase the India share to 10 per cent of LG’s global revenues. Our top management, they really pay attention to this market. The market conditions are very good and the government is very smart, they maintain an open policy, India is a market driven economy. All these things are very positive for us. The corporate attention on this market is really huge. Maybe even more than China.

    LG has a large amount of visibility as far as mass communications are concerned. What are marketing and advertisement spends?
    Every year for above the line and below the line, we spend around US$ 50 million in India. Last year we invested around US$ 46-48 million, this year we plan US$ 50 million. This figure may change because every month we are growing by 20 – 25 per cent. We are on right track.

    So which segment is driving the growth?
    The flat panel display, GSM, computer monitors, and now AV these are driving our growth. And they are also our future growth engines. Maybe PC’s too.

    What is your market share in PC’s?
    Laptops and desktops is around 6 million, and this will grow fast, so at the moment it is very minimal, around 3 per cent. But, we are coming up with good designs and technology so the PC potential is very good. The market size of laptops is area that we have to focus on.
    ‘Flat panel display, GSM, computer monitors, and now AV are driving our growth‘

    Do you have lower end laptops also?
    Yes we do, but we are not going to play in the low-end segment. We are going to really play in the top of the line products.

    What are your forecasts for the next year – your growth targets?
    Every year we have to grow by a minimum of 20 per cent. By all means we have to grow by this percentage. By mobilizing the attention from headquarters, from market surveys and through consultants like McKenzie, maybe work together with them if we feel that we cannot meet the targets.

    What is the proportion of the products that you sell here that are made in India?
    Almost 90 per cent. About 10 per cent we import as finished products or complete business units (CBU). The balance 90 per cent we manufacture and export too. Some are CKD, some completely manufactured in India. The local content varies product wise. But it’s between 50-70 per cent.

    Any plans to expand further here in India?
    Not for the next several years no. In Pune we have a large space at Ranjangaon. I would not say that we have idle capacity, we have other buildings-two as a matter of fact, one is full of operations and the second building is 20 per cent operational. So there is space. We have to invest only in the manufacturing facility. The building and everything else is ready. We have to invest only in the machinery, that we will go on within Pune.

    How long have you been in India and what is your experience here?
    I have been here two years. Over this time, I have travelled a lot, to almost every corner of the country, I have pretty much covered the A and B class towns. I was a real frequent flyer, I wanted to see what is taking place in every corner of India and I could observe and find that the potential in India is really good. I think India is the only country that can fight against China. India will definitely be in the forefront as far as economic growth, or the GDP growth is concerned, it will be neck to neck with China in the next 30 years or so. China is growing very fast, but India is also growing as fast. The potential is there and I am going to communicate with the headquarters about this marketplace and how it is important. My outlook for India is very positive.

    Could you speak about the infrastructure in India?
    I was born in a very tiny town in Korea and I have grown up there. Maybe at times the infrastructure was even worse than it is today in India. So I am really accustomed to the poor infrastructure in the rural areas. For me there’s no problem at all.

    What is your opinion about the skill levels, the knowledge quotient of Indians?
    They are good, they are very fast learners. We used to send people to Korea and train them over there and then bring them here. We sent them to our other subsidiaries to benchmark. Their adaptation is excellent. Skill levels are good. I really appreciate them.
    Any R&D work being done in India for the LG group globally?
    Not much. In India we have only around seven people working on design. They have not yet contribute to the designing for LG globally. We have our own design centers all over the world, in Europe, China, in the United States. We have design centers located in every corner of the world to come up with local design and also to supply global designs.
  • “The adoption of multiple frequencies will mark the next inflation point in radio” : Naveen Chandra- Radio Mirchi SVP & National sales head Naveen Chandra

    “The adoption of multiple frequencies will mark the next inflation point in radio” : Naveen Chandra- Radio Mirchi SVP & National sales head Naveen Chandra

    The media industry has recently been eyeing the advantages that radio is promising to offer, but when it comes to the monies, advertisers are still apprehensive to bet big on the medium. As the radio industry in India evolves progressively from mass to niche, the industry is setting its targets to rake in the moolah. However, obstacles are inevitable and the biggest threat is of under valuation in proportion to its reach and accessibility.

    In a free flowing conversation, Radio Mirchi SVP and National sales head Naveen Chandra shares his views on the scope of the medium in India, which he believes will be fuelled following the Government’s sanction of a multiple frequency approach adopted by a single radio operator. He tells Indiantelevision.com’s Renelle Snelleksz that this will mark “the next inflection point in radio.” Geared to take on the big guns of print and television, this radio player has set high standards for itself and demands a premium as it moves into the radio era.

    Excerpts:

    Could you shed some light on Radio Mirchi’s sales and media strategy?
    As a market leader we have been pioneering efforts to look at things very differently. As a medium, radio is very unique because it can be both National and local at the same time. There is no parallel to this, for instance television is national by nature, and although regional television does come close, it is still very fragmented and exits in certain pockets. In terms of a National network, even print does not have editions across the country and is more regionalized. Thus we are a medium that’s does not have limitations of geography, which places us very uniquely to conduct a national or local campaign.

    The second thing about radio is that if you look at Tam data radio lures advertisers from across different product categories. While there are some categories that will use print or niche channels like FMCG, the auto, telecom and banking sectors will not advertise on GEC’s. Radio in this respect is an all encompassing medium as it offers a solution to a wide spectrum of categories that advertise on different genres of print and TV.

    Which are the biggest categories as revenue drivers on Radio Mirchi? How do they stack up percentage wise?
    Banking and finance contribute to 11 -12 per cent, media and entertainment 10 – 11 per cent, telecom 9 per cent, retail and real estate 8 – 10 per cent, automobiles 7 – 8 per cent and durables (which on an annual basis is cyclical).

    Which are the new entrants that are flocking to radio?
    We recently conducted an IPO marketing seminar with merchant bankers to get them to look at the medium positively as it can provide returns due its large reach, which exceeds a Star Plus or Times Of India. Besides radio can also provide a lot of on-ground and BTL brand building activities that attract audiences to consumer the product.

    How do you justify the fact that radio exceeds the reach of Star Plus or TOI?
    If you look at five minutes of continuous viewing on any television channel, you will notice that it is lower than the reach of radio. Using one simple metric – to consume television you need cable connectivity, to consume print you need literacy but to consume radio you nothing but to enjoy good music. Therefore radio by definition, reaches 99 per cent of the population and the reach will always be larger than any other medium.

    What is the current reach for the station nationally?
    Currently, 1.7 crore people tune into Radio Mirchi daily across 10 stations that include the four key metros Mumbai, Delhi, Kolkata, Chennai, as well as Bangalore, Hyderabad, Ahmedabad, Indore, Jaipur. Stations in Patna, Jalandhar and Goa have recently been added.

    What are your plans to increase your network across the country?
    We are looking to launch another 20 stations across the country within the next six months.

    What’s the revenue growth that Radio Mirchi has seen over this fiscal?
    We have seen good growth over this year, however I will not be able to share exact numbers until our annual report is out.

    But we have marked about 50 – 60 per cent revenue growth on radio.

    What is the current revenue generating model that radio operates on and how does it compare with television and print advertising rates?
    For radio we follow ILT research that helps us to operate on a cost per reach (in thousands) model, so while our rates are high, our cost per thousand is very low. Typically print and TV operate on the on cost per thousand (CPT) approach but at about Rs 1300 – 1400 depending on the channel.

    Our rate is Rs 70 per thousand people, which is very low in comparison to television and print. But as a means of comparison, one ad in print is equivalent to about 30 ads on radio, so in that sense it is much lower.
    ‘The reach of radio exceeds a Star Plus or Times Of India‘

    What’s the ad growth curve that the station has seen over this year?
    With our focus towards a lot more on corporate driven advertising, if you look at the ad growth we have seen good growth over the last four to five years. Additionally, the ad durations have come down significantly from about 45 seconds to about 15 seconds on an average because the advertising environment has become more promotional led than as branding activities.

    In terms of spot rates, what is the margin between Radio Mirchi rates and your closest competitor?
    In Mumbai, our rate would be Rs 1,800 for 10 seconds, while other stations would range between Rs 400 – 1000 for the same.

    What is the current market size for radio in India?
    It presently stands at about Rs 500 – 600 crores.

    Could you highlight key benefits of radio as a medium?
    Radio is very linear medium, for instance in New York there are 89 radio stations but the average number of stations a person listens to is 1.7, which is under two. Essentially, this indicates a high loyalty towards radio stations as programs are seamless and it’s not like every hour there is different show. The characteristic of radio is such that it is very personal and intense and therefore is consumed as a medium of ‘one,’ it’s a mass as well as a personal medium. While for television, every half hour there is differentiated content which forces the viewer to keep shifting in and out of channels. Similarly, a Friends fan will watch the show on which ever channel it beams, so even if cricket had to shift to something like B4U, then everyone would flock there even if they have never seen the channel before.

    Therefore, for radio the research we conduct points to many unduplicated audiences that are loyal to one station alone. Thus, many unduplicated audiences will continue to be present but will not be reached even if one operator were to buy out a set five to seven stations.

    However, acquisitions will increase your presence across the country, so are you looking to buy out other stations?
    Well, we don’t know that yet. But in a sense the next inflection point in radio will be multiple frequencies.

    With India experiencing a boom in radio, what are the key differentiators for Radio Mirchi in this cluttered environment?
    Our key differentiator would be our programming and jocks which are very contemporary. Through a lot of analysis and research we cater to the needs of listeners. We often tie up with Bollywood to premiere music on our station.

    Radio has a lot of elements that a listener can identify with like for instance a radio jock. Also, every radio station has a particular ‘stationality.’
    In more mature markets, often clients only advertise on stations that are a natural extension of their brand and its values? How far away is India on that evolutionary scale?
    Let me give an example – There was a time when Warner Brothers would advertise on Go 92.5FM because it was English and niche, but today advertisers such as these are seeing the benefits of a mass radio stations as well.

    With television further fragmenting into ‘niche’ specific channel offerings, how long before radio also branches out into the realm of niche stations? Given that Go 92.5 FM grew quickly extinct and resorted to mass appeal, what barriers would radio encounter before it adopts a niche approach?
    Once the Government approves of a multiple frequency model, where a single radio operator will have different frequencies, it is then that radio will experiment and take the route of niche stations. But this will not take shape unless all the radio stations that are scheduled to launch this year roll out there plans.

    What do you see as the way forward for the radio industry in India?
    Currently, radio only occupies two per cent of an advertiser’s ad pie expenditure and that is dispensable. As a medium I feel our rate structure is under priced, the average cost for a radio campaign is about Rs 60, 00,000 across eight to nine markets. The challenge is to increase this by three times.