ITV

Category: GECs

  • ‘We have enough high quality relevant content to provide for each of the three channels’ : RC Venkateishi- ESPN Software India managing director

    ‘We have enough high quality relevant content to provide for each of the three channels’ : RC Venkateishi- ESPN Software India managing director

    Just when everyone was thinking that sports broadcasters might look to “de-risk” the cricket story, ESPN Star Sports has announced the launch of a dedicated cricket channel for Indian audiences. The new channel, christened Star Cricket, will commence transmission in June.

     

    Star Cricket will be making its bow with a big bang property to showcase because its launch coincides with the India tour of England that involves four Tests and seven One Day Internationals.

     

    Indiantelevision.com caught up with ESPN Software India managing director RC Venkateish in an attempt to get a feel of what was guiding this decision.

     

    Excerpts:

    Is this the right time to launch another cricket centric sports channel, particularly considering the disillusionment of the general public with the game in the country?
    Suffice to say that there is still no challenge to cricket as the single sport which has pole position in the Indian market. And I don’t see that changing anytime in the near future. So, from the perspective of timing, we really don’t think that is an issue.

     

    What is more important is the longer term picture and going forward we continue to believe that cricket will continue to hold its own and in fact strengthen as there is a lot of new talent coming in.

    Nobody’s is arguing that India will not continue to remain cricket-centric. But the fact of the matter is that for something like this to work, it has to be underpinned by high levels of interest in the domestic game as well, which is not the case in India. In fact, this is a problem that Neo Sports seems to be confronting as well.
    Which is a pity actually. In fact, if the local tournaments are properly marketed and properly packaged for the viewers, have the potential. We unfortunately don’t have the rights for that.

    Exactly, and isn’t that what Nimbus is hoping to leverage on Neo Sports. And you don’t have local Indian cricket to showcase, so what is the USP of your channel?
    What we will be showcasing in fact, apart from the international matches, is county cricket in England and domestic cricket in Australia, which also feature some of the best players in the world, including a lot of Indian players. There will also be a substantial effort to market that.

     

    In many ways we will be doing a parallel to things like English Premier League. Where it was four or five years ago to where it is today, it is really a result of the investments that we have done in promoting that property and making it interesting for the viewer.

     

    If you just pick up something and put it on the channel, it is not going to work. That is the job of marketing to popularize a particular sport. It has to be exploited and executed properly. Even the domestic Indian tournament, it needs to be put across properly to the viewer. It is not something that will happen automatically.

    There are two strands to the communication that you sent out on your upcoming channel. One is that you will showcase live India and non India cricket. You will also showcase feature programming, including reality reality shows?
    Reality shows are like we had recently Harsha ki Khoj Dream Job. That genre has lot of space. It has a lot of opportunities for us to create programming around that. We will be developing more such shows and putting them across to the viewer.

    Fair enough but the point is that now you have three platforms through which you have to transmute content. Is there enough content to go around?
    On the content side, over the last couple of years, we strengthened our cache, not just in cricket but in all other sports. We just recently renewed the English Premier League. We have the Spanish League, we have Euro 2008. Those are the big soccer properties. In tennis, we added the French Open so we now have it along with Wimbledon and the Australian. In motor sports we have Formula 1 and A1. In golf we have all the major properties.

     

    So, if you look at each and every sport and the key properties, they are all residing on our channel. Along with this, we have other smaller content also which has come on the network.

     

    As for cricket, for the next 14-16 months I have India’s tour of England, the Twenty20 World Cup, India’s tour of Australia, the Asia Cup and the Champion’s Trophy. That is five major cricketing events.

     

    So I don’t believe that we are in anyway falling short of providing high quality relevant content in each of these three channels.

    What about distribution? Right now we are in a very uncertain distribution market, both on analog as well as on digital cable, with Cas only in the beginnings of being rolled out. And in such a time you are launching a 3rd channel?
    I agree with you that there are a lot of people having trouble finding distribution. But ultimately, your bottom line is going to be content. I think we will be in a position to demonstrate it through cable and to the viewer that the content we have to showcase on the channel are of a quality that must be carried.

    Let us accept that you have great content, but today the reality of placement fees cannot be wished away. And it means that slots are booked on tunable bandwidths for one year, two years…
    I think that applies more to other genres. Unless people see your channel how will they get hooked on to it? They will not demand it. For my cricket channel, I don’t have to create a demand.

    There is the recent example of Neo Sports, which had great content but still faced distribution problems?
    The difference is that Neo Sports did not have its own distribution team.

    Well they had Star distributing them, which is as good as it can get?
    I don’t know what Neo Sports needed to do but they didn’t do, or what support they got, I don’t really want to comment on that. But as far as we’re concerned, we have the strongest distribution as well as distribution team in India, and I am completely confident that we will not have any issues with our channel.
    ‘We have been delivering higher and higher reach and we haven’t seen the proper monies for that as yet‘

    That still doesn’t explain how you’re going to find place in a tunable bandwidth if all the slots are already locked in.
    In case there is a cricket match happening, he (the cable operator has to put it in the prime band. I can’t see a situation where the matches will not be shown.

    There is the option of DD, where the matches are being shown because of must carry.
    Test matches are not going to be shown on DD. I agree with you that channels tend to go up and down, especially the ones who don’t pay money to the cable operator. That is a fact.

     

    Even then, we have always managed to be there in prime band even when we didn’t have cricket running. And you must understand that in regards to sports channels there has been a certain amount of consolidation. So the other channels which don’t have relevant content tend to be pushed onto the hyper band.

     

    There will be a little bit of juggling and we will have to manage that. But as a company policy, we will certainly not pay any carriage fee or any placement fee. We are a pay channel and we will get our price.

    What rates have you fixed for the new channel?
    We haven’t announced the final rate but it should be in the region of around Rs 28 to RS 30.

    Let’s talk about the ICC cricket rights. I take you back to a comment you’d made earlier to Indiantelevision.com that the crazy escalation in rights prices will start cooling down a bit. And yet you went and plonked $ 1.1 billion for those rights?
    If you do a bit of math, you’ll see that whatever I said earlier has actually happened. Let’s benchmark it with some of the other rights. The BCCI rights, which the previous version was for $ 50 million for five years, went for $ 612 million for four years. So that’s basically an escalation of 1,400 per cent.

     

    Now take the ICC, the last ICC went for $ 550 million. So that’s basically a 100 per cent increase. And the last ICC did not have events like the Twenty20 World Cup, which have been added on this property.

     

    What we have paid over eight years, is basically a 9 per cent per annum escalation in rights fee, as opposed to some of the other properties, which in recent times have gone absolutely berserk. The BCCI, as well as the BCCI offshore cricket rights package sold to Zee for over $ 215 million ($ 219.15 million).

     

    Even if you look at things like the Sri Lanka board for $ 50 million, or the Bangladesh board, which went for $ 56 million after going for $ 6-7-8 million last time.

     

    So what we have paid for are not just the World Cups and Champions Trophies, but also what is going to develop into a real cracker of a property – the Twenty20 World Cup. Not once, but thrice.

    From an average per day cost perspective, and if we compare the three properties that went for big bucks, how does such a payout work?
    Zee paid $ 8.71 million, BCCI went for around $ 3-4 million per day and we are around the same ball park.

    There are also the cricket rights that are coming up over the next 12 months for many big territories over the next year and a half. You have already committed $ 1.1 billion for the ICC rights as well as all the other rights you’ve mopped up recently, so where do you stand on that?
    We are quite comfortable with the levels of investment we’ve made thus far and what we have identified as key acquisitions for the future.

     

    But having the ICC rights provides us a very strong backbone of cricket over the next eight years. Whatever else we add on would be accretive to what we already have so it won’t be necessary to go out and buy everything under the sun.

    What of the territories that ESS currently own – England, Australia, New Zealand, South Africa? Will you be making aggressive bids to retain them?
    We haven’t formalised how we’re going to go about it yet.

    I again come back to the disaster that was the World Cup. Everyone was expecting 2007 to be cricket’s year as far as advertising is concerned due to the sheer volumes of A list properties that are coming up throughout the year. Now will all the calculations have to be reworked?
    On this I have a different take. I think the advertisers have had it pretty good so far. I have an argument we need to push more forcefully and that is something as a broadcasting community we haven’t done enough of. The fact of the matter is all the rates that advertisers have been paying us have been on the basis of CPRP at a time when overall reach has doubled.
    But this is an argument that Star’s Paritosh Joshi has raised, as too Zee’s Joy Chakraborty. Today we are faced with a situation where HLL has pulled out its advertising from Star. And the broadcasting community does not seem to have any unity on this issue so what are we talking here?
    There is unity developing on this issue and you will see a more forceful exposition of the point in the days to come. Certainly at IBF we are all seized of it in terms of a consolidation of our position.

    We have been delivering higher and higher reach and we haven’t seen the proper monies for that as yet.
    Coming back to the development of local sport, you’ve earlier stated that Sports federations need to get their act together. One of the biggest culprits in that sense is the IHF run by KPS Gill with whom you’re a partner. One could say that it is because of the mess the IHF is in that the PHL is not taking off. So doesn’t it make sense to encourage the IHF to get itself sorted out?
    Our experience with the PHL has been very positive. There wasn’t anything in PHL that we needed to do and have not been able to do because of lack of support from IHF. Suffice to say that we are quite happy, both with the way the PHL has performed and with the kind of partnership we have with the IHF.

    But you yourself have said one reason why PHL is not taking of is because they are not performing well internationally. I think it is interlinked. If the federation was being run properly, the teams would be doing better internationally. A follows B, one could argue.
    How federations are run is not something I would like to comment on. We stand ready to help the federation in any way we can but it is not our brief to tell the associations how they are to be run. Because, quite frankly, this is something they need to work out among themselves.
  • ”Economically sensible model is a combination of CPT and correction of income growth’ : Paritosh Joshi- Star India President

    ”Economically sensible model is a combination of CPT and correction of income growth’ : Paritosh Joshi- Star India President

    It’s now a known fact that HLL has pulled its advertising off the Star India Network, but whether a non co-existence and exchange between the biggest advertiser on television and the top rated television network in the country is a healthy proposition for either of the two parties, is the moot point?

     

    Even though TRP rates have declined across the network by 1-1.5 per cent after the implementation of Cas, it is also true that the television universe has grown drastically. And the truth is, Star has been singled out, leading one to question if there is a larger issue at stake here between the two mammoth corporations in this face-off that kicked off in March this year.

     

    Star president advertising sales and distribution Paritosh Joshi says that it is more than just an individual client issue but part of a larger debate for which the industry cannot behave like a cartel because that is unethical.

     

    Presented here are comments made to Indiantelevision.com on the matter by Star India president Paritosh Joshi. Additonally, relevant comments made in earlier interactions with Indiantelevision.com by HLL GM – Media Services Rahul Welde and Zee Network executive V-P Joy Chakraborthy have been provided in an attempt to offer a more rounded overview of the issue.

    Excerpts:

    How do you propose to address the issue that HLL has put the forth through its boycott of the network and rejection of Star’s advertising rate card?
    A solution to this will emerge as a fallout of the understanding of two dramatic developments in television. First the growth in television homes in the Hindi speaking markets of the East, West and North but not the South that is already saturated.

    Secondly, the GDP, which is estimated to grow by 8.9 per cent year on year. However, there is a disproportionate income increase in which the top 60 per cent of the population absorbs this growth. Out of the 120 million TV homes, 70 million are C&S, therefore with the kind of growth in disposable incomes that the country is seeing, the number of C&S homes will grow by twice that rate.

    The aggregate value of television ad sales is likely to see 20-22 per cent Y-O-Y growth. If this is not reflected as an industry then we are under monetized.

    Is CPT is the answer?
    I believe an economically sensible model is a combination of CPT and correction of income growth.

    Should broadcasters be united on this front?
    The industry cannot behave like a cartel because that is unethical. We have to, as individual broadcasters, explain this to the client in a sensible manner and get them to recognize and find merit in the argument.

    But how then do you fill up the bulk of your inventory?
    The Cricket World Cup has in some ways contributed to clients looking for a more reliable, robust and stable inventory. With April to June being a buoyant period with new category launches and the new financial year, there are enough interested clients. We are seeing high activity from the skin care sector, bottled beverages, refrigerated foods and air conditioner brands.

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    ‘Money is shifting from the big to the small or from the leaders to the challengers‘

    With HLL always known to be television heavy, what happens in the case of mass channels and niche channels, what strategy would you follow in that case?

    Well, we do spend on niche and mass channels, but with the whole area of fragmentation of audiences with multiple channels emerging, where stickiness is a challenge and competition is high. Now what it really means for us is that segmentation and multiplication of channels provides the opportunity to peg note and talk to the consumer.

    Unfortunately, the costs have increased and given that the overall advertising pie is fixed. The ad pie doesn’t grow because there are more channels, but what is happening is money is shifting from the big to the small or from the leaders to the challengers.

    The growth of channels, we will see an increase in the number seconds, but what is often interpreted is that spends are also increasing in the same proportion. It is of course a big challenge as fragmentation makes the task of planning even more difficult, where agencies will produce software and optimizers making the process more sophisticated. This scenario is good for segmentation, bad for costs. Thus I don’t know whether to call it a ‘happy situation’ because after a point of time your returns become sub-optimal when costs are high. Then that becomes a worry.

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    The big news currently seems to be around how Hindustan Lever is significantly increasing spends on your network. You have even been on record as saying you are looking at a growth of at least 100% on Lever spend in FY08 over FY07? How do you justify that optimism?
    Levers is the biggest client in the television space and we have channels across all genres, Levers is a good client for consumption also because they are perennial clients. There has been rate correction but we have also given them big properties. At the same time, Levers buying process over the last two years has changed, initially they used to buy slots that appeared at a particular time band but now they have started buying quality as well so they would necessarily have to pay for that. Therefore, there has been a jump in ad sales rates this year over the previous year.

    When you say ‘rate correction’ – what do you mean?
    The Zee network itself is very under-priced, so we are continuously correcting our rates. I have over my tenure here (which is two years) revised my rates three times, but no rate correction is very drastic, it’s really a gradual correction.

    After all we are still in a World Cup year and although India is out of the tournament, we will see loads of other cricket action as well?
    As a network, we haven’t suffered at the hands of cricket. However a lot of money is diverted there. But thanks to cricket and sport, I believe that the overall PUT (people utilizing television) will also increase, because of World Cup TV sales will also increase, so the whole space is only going to expand.

    It will eventually benefit us also, but my only concern and what I see as a challenge this year is that the unofficial currency is cost per rating point (CPRP), which has to move cost per thousand (CPT). CPT is more important and with Tam’s expanded panel the absolute number of people watching has increased by 50 per cent and we as an industry should be paid for that. Even more, if you are a listed body you also should subscribe to the CPT model, which will happen sooner or later.

    But how soon do you think the transition from a CPRP model to CPT model will take to materialize?
    The IBF and AAAI have already met on two occasions, the next one is in April. But at the end of the day this shift will benefit all of us. It’s not that it is unfortunate for the client alone, as the television medium continues to grow the cost of programming, distribution, marketing and manpower is increasing every day. With the CPT model the ad rates will go up, infact most agencies buy on CPRP and give it to the client on CPT, but after expansion the minimum rate has increased. The recommendations of these two industry body’s should materialize within a month’s time.

    It has been previously stated that Cas impact only accounts for a 1- 1.5% drop in C&S 4+ level across TV. However, with moves to extend Cas to cover the full metros and then possibly go into other cities and towns this argument cannot be sustained for much longer. How does Zee view this situation and how do you plan to use it to your advantage?
    Cas is here to stay but the thing is that Cas growth was marginal, across the Zee network the drop accounted for 2.5 per cent, which is very less in comparison to the kind of growth that we are experiencing.

    With Cas rolling out further, the pressure from media buyers on rates is only going to go up? Do you see the possibility of many channels, including entertainment channels, going FTA to protect advertising revenues? For instance, Peter Mukerjea’s Hindi entertainment channels will be FTA when it launches…?
    Sometime we really wonder whom the media buyers really work for, the channel or the client. They will always pressurize us. Do you think they deal with rate hikes easily? They will fight for each rupee just as we fight for the same. But that is what makes our relationship so lasting.
  • ‘The challenge in a high growth economy is shortage of talented, trained manpower’ : Arvind Sharma – Goafest Committee chairman and Leo Burnett chairman India sub-continent

    ‘The challenge in a high growth economy is shortage of talented, trained manpower’ : Arvind Sharma – Goafest Committee chairman and Leo Burnett chairman India sub-continent

    As the sun and sands of Goa beckon the Indian advertising, media and marketing community for the AAAI organized ad festival Goafest from 19 – 21 April, apart from the celebration that lies in its wake, the event seeks to address more critical issues faced by the industry. Amidst all the hectic last minute schedules, Goafest Committee chairman and Leo Burnett chairman India subcontinent Arvind Sharma very co-operatively took time out to share his perspective on the current standing of the Indian advertising community, the progression towards growth and expansion and the pitfalls that need to be resolved.

    In an exclusive tete-a-tete with Indiantelevision.com’s Renelle Snelleksz, Sharma highlights the point that the fundamental objective for the festival is “to provide a platform for conversations, debates, ideas and celebrations between the rock stars and the aspirants.”

    Excerpts:

    What are the key proponents that necessitate AAAI’s endeavor to capture an untapped area of the Indian advertising fraternity through Goafest?
    As a member of the executive committee of AAAI, it was early last year that we decided to host a National Ad Festival. National because we recognized that epicenters have a way of moving and so different advertising capitals keep springing up across the country. At one point Kolkata was at the helm but today Delhi is huge, only 20 per cent smaller than Mumbai. Therefore AAAI endeavors to promote advertising work from across the country.

    Secondly, there is a fundamental difference between a one off award function and a festival. The former is largely focused on the work of the individual but we chose to go with a festival because it allows an opportunity to display the work and think of ways in which it can be bettered. Unlike award shows, the festival has been designed to not focus on the ‘agency of the year’ concept which selects one winner and a dozen losers. As an industry that is growing at 20 per cent we would rather have 1,000 winners and our attempt is to encourage and nurture those winners.

    By design, there will be no agency of the year but instead a Grand Prix award to recognize work that represents excellence. This will help develop the industry more rapidly. The fundamental objective for the festival is that it aims to provide a platform for conversations, debate, ideas and celebration.

    What are the key differentiators for Goafest as a festival, as compared to existing one off award functions?
    This takes shape in four ways – Firstly, the work that has been entered is displayed so that delegates have the opportunity to make their own judgment on the entries that have won and those that have not. The festival also brings successful International speakers and local jury members as well as aspiring youngsters to exchange their thoughts and ideas.

    Secondly, there are a host of formal seminars and thirdly, apart from the exchange between the aspirants and the rocks stars, the festival brings 2,000 people from various locations, specialist fields intermingling and sharing their experiences.

    Lastly, it brings the rising stars from across India to Goa. As is known, all industry functions like these are expensive and only the senior executives get to go, which ultimately makes development of the industry slower because the exposure is less. Thus we have provided a special package for 800 under 30 year-olds.

    While Goafest is an event of celebration, what are the larger underlying industry issues that the event is looking to address? How can these be remedied?
    The challenge for the advertising industry in a high growth economy is the shortage of talented trained manpower and this will be the primary focus at the event.

    The Ad Conclave that precedes the festival will get 150 leaders of the industry and much like town hall sessions, will get them thinking together. On an every day basis, the nature of competition exists, but this is a platform where we can all put our heads together to finds ways to cope with the existing issues.

    At an individual level, there will be competition but we need to work collectively on this front. The gurus of today spent their first 10 years in a pre-television environment with DD as the only means of TV. Youngsters on the other hand, are acquainted with the growing multimedia environment, though they may not know the craft. It is fundamental for us to listen and learn from them just as much as they learn from us.

    The industry faces a shortage of talent. It is believed that AAAI plans to unveil an ad campaign that would lure youngsters towards the profession. Is that still on the cards?
    Yes, it is still very much on the cards and will follow closely after Goafest.

    What is the growth that the industry has seen over 2006?
    Various sectors have grown differently – The creative agencies have grown at 15-20 per cent, the marketing services at about 30 per cent and the specialist’s media agencies at 25 – 30 per cent. So overall, the industry has grown by 20 -25 per cent and from a global point of view India features in the top five advertising industries. Although our base may be small, our growth rate is impressive.
    ‘Creative agencies
    have grown
    15-20%, marketing services at about
    30% and the specialist’s media agencies
    at 25-30%‘

    In order to leap ahead in the next three to five years, as the Ad Conclave theme suggests, it would require the combined effort of the industry at large however; two mammoth agencies O&M and Lowe seem to stay aloof? What would be your advice to them?
    In any industry, one hopes for 100 per cent participation. But we have received enthusiastic support across centres and agencies. Sometimes people choose to wait and watch, but as and when they decide to join in we will welcome them. We will go forward with what we believe in, we will just have to give the others time.

    What is your opinion on a having a common Indian advertising body and a single credible award function, a proposition that many professionals have vouched for?
    Our belief is in an advertising festival and not just an award show that will include seminars and interactions. However, there will always be a second and third viewpoint.

    You mentioned earlier that an investment of Rs 50 million was being pumped into the event. You also have a big kitty of sponsors, what will be their contribution to making the event a success?
    Goafest is a non profit event and while no association has complete funding of its own, the whole industry has supported us directly through sponsorship money. We are extremely excited and grateful for their contribution.

    What are the logistics that have to be taken care of when planning an event on such a lavish scale? When did the planning commence and how long has it taken you to set up the agenda?
    The logistics are extensive as one has to get International speakers and coordinate dates that are convenient, to book hotel rooms and check availability. To accommodate and make arrangements for the 800 under 30 delegates as well as senior executives has been a real challenge. We started planning and preparation six month ago.

    With the inclusion of media awards and with a host of International experts and commentators – what are your expectations of the event this year?
    We are hoping to prove to ourselves and to the world that we are capable of hosting an advertising festival comparable to any in the world.

    What advice would you give to the 2,000 media, advertising and marketing professionals that are gearing up to come to Goafest this year?
    (Laughs) My only advice is to come and freely share your thoughts and ideas, as I believe this will finally help to catalyze the growth of the industry as a whole.
  • ”In the entertainment field there is nobody else who does what E! does’ : Kevin MacLellana – Comcast Entertainment Group, International president

    ”In the entertainment field there is nobody else who does what E! does’ : Kevin MacLellana – Comcast Entertainment Group, International president

    With the advent of digitisation in India, more international broadcasters are looking to launch channels in the country. A case in point is E! Networks. It runs E!, which focusses on Hollywood news, stories and features. It will also launch its fashion and lifestyle channel Style internationally later this year.

     

    E! Networks is looking to launch at least one, if not both of these channels before the end of the year in India. It is in talks with distribution networks to negotiate deals. Indiantelevision.com’s Ashwin Pinto caught up with Comcast Entertainment Group, International president Kevin MacLellan to find out more.

     

    Excerpts:

    Could you give me a brief overview of E!’s international business and the content it offers?
    E! has two sources of revenue. One is its programme sales. It has been selling foreign programming into foreign markets as far back as 1992. This was after it launched in 1991. Then in 2002 we started to sell the E! Network into foreign markets in 2002. Over the last five years we have garnered 46 million subscribers in over 100 countries.

    How important is Asia in terms of content consumption and revenue vis-?-vis Europe and the US? Which are your top three markets in this region?
    It is very important. The 46 million subscribers that I mentioned did not exist till five years ago. Over a third of E! Networks subscribers come from outside the US. Malaysia, Indonesia and Singapore are the top three markets in Asia. They account for 65 per cent of viewership in Asia.

    We have 12 feeds globally not including the US. In Asia there are three feeds.

    India is going through a period of digital transition with Cas and DTH. How do you view this market in terms of potential and has a timeline been set to launch E! and Style?
    The Indian market has always been extremely interesting to me. I was part of the team that helped launch Sony in the 1990’s. India has been interesting on account of the success of HBO. I was quite skeptical about how it would fare as I felt that Bollywood would be the programming that everybody wanted to see.

    Now it has become apparent to me that due to the upper echelon of Indian society in terms of the wealthier people with larger disposable incomes they have a significant interest in Hollywood films. From our perspective, India is a big market to reach for in Asia. The problem was that E! launched internationally pretty late in the game in 2002-2003. Analogue was pretty full by then.

    We had to find other platforms that had available capacity. We are so pleased to see DTH, IPTV taking off in India. We believe that the audience that has the money to invest in these platforms has a strong interest in Hollywood. We would like to launch E! and Style by the end of this year.

    The English entertainment and lifestyle segment in India is getting more competitive. What is E!’s USP that you feel will help it stand out from the other players?
    In general, entertainment and lifestyle programming is becoming more popular everywhere. In the entertainment field there is nobody else who does what E! does. We are the experts in Hollywood. We are not experts in Bollywood and to try and pretend to be anything we are not is a big mistake. We have learnt that by going into many markets, whether it is the UK, Italy, Japan, Malaysia.

    We cover Hollywood better than anybody else and this is what sets us apart. To find out everything on Hollywood and see it done in a high quality rich looking channel is what viewers expect from us.

    From Style’s point of view there are many lifestyle channels out there from the likes of Discovery and Scripps. Most of those channels appeal to 25-49 year old females. The Style channel has been successful in the US as it appeals to a younger female crowd. You are talking about a 12-34 year old female. Women at that age are just setting their buying trends. They are choosing brands that they will use for the rest of their lives. Style targets a young, technologically savvy woman. E!’s target is 18-49.

    The similarity between the two networks is that we are appealing to what we call the ABC1 demographic. This refers to a high income, highly educated, metropolitan audience.

    Over the last three years how has E! gone about creating awareness in Asia?
    Our aim was to go into each market and secure sophistication. There is no point in marketing unless you are strong in distribution. So what we have done is countries like Thailand, Hong Kong, Singapore, Indonesia is spending money with the local operators. Due to the limited distribution in all Asian markets doing general marketing like ads in newspapers makes very little sense. It is important to market to viewers who can access the channel.

    A good way to do that is to do marketing campaigns with the operators themselves. We do outdoor campaigns and it helps that E! has famous faces appear on the channel. We can do ads in print magazines with pictures of Brad Pitt, Angelina Jolie, Jennifer Aniston. The A-list names grab people’s attention a lot more than say an ad for a documentary would.

    In India you have licensing deals with broadcasters like Zee and Star. When you launch, will this side of the business get affected?
    Yes! I believe that there is an important mix between sales and channels. While we do sell content to channels it is important for the viewers to know that the main place to get E! content is on the channel itself and not on other networks. Viewers must know that the best place to get news on Hollywood is E!.

    However, to go back to the marketing issue, it helps to put a little of your content on the bigger networks with a broader reach. It helps familiarise the audience with the E! brand. I am sure that there will be a reduction in the content we sell once we launch.

    Right now, we do volume deals with Indian broadcasters where we sell 200-250 hours of programming. This will change. The number of hours sold will come down.

    Apart from India, China is a key market for most channels but has proven difficult to crack. What is your gameplan there?
    We have been lucky in China. We shoot the content ourselves. We own the rights. Other studios have financing partners and they all have some rights. We produce 1100 hours of programming. We do not acquire programming nor do we commission very much. We own our content across multiple platforms. We have the flexibility to be more realistic in doing deals in China.

    What has prevented some studios and production firms from being able to have a business in China is that they are inflexible in terms of what they are willing to do with their rights. We can sell 700 hours each year to multiple channels. On CCTV for instance there is an hour of content. CCTV can also use this content as they expand their broadband and mobile businesses.

    The disappointment in China is not our ability to sell there. It is to have our brand be available. However the good thing about China is that the rules for online are not as restrictive. So we can sell our content on television and maintain a brand presence online.

    What is the split between advertising and subscription revenues? What targets have been set?
    In Asia it is all affiliate revenues. There is no advertising. In Australia and New Zealand we have a significant amount of ad revenue – 35 per cent. In Latin America most of our revenue comes from advertising as is the case with the US.

    Our biggest goal is to launch Style later this year globally and to increase the subscription revenue of E!

     

    Are you looking at working with retail firms as well with Style as it is about fashion and accessories?
    What is good about Style is that it comes built in with a bunch of cross-promotional exercises. In the US the network has a lot of high-end brands. We have worked out global ad sponsorship deals. For instance, we do a programme that focusses on the Versace fashion shows.

    To what extent has E! Networks’ programming budget gone up over the last couple of years?
    It has gone up hugely by over 50 per cent in the past five years. Most of this is due to the amount of money being spent on high end reality shows. There was a time when reality shows were inexpensive. They are now becoming almost as expensive as scripted drama and comedy. Talent has become more expensive. In general I would say that there is more creativity in the reality genre.

    There was point when you had elimination reality shows and home based reality shows (like Big Brother) where you lock people in a house. Now you see reality shows that are based on game shows that are on mockumentary formats. This would be a hybrid scripted reality show. You will see more shows like MTV’s Laguna Beach, which is partially scripted and partial reality.
    ‘I believe that there is an important mix between sales and channels. While we do sell content to channels it is important for the viewers to know that the main place to get E! content is on the channel itself and not on other networks.‘

    What are the new shows that E! is developing?
    There is a show called Paradise City, which is similar to Laguna Beach. It follows the biggest performers of Las Vegas. One character can be a playboy bunny. Another one can be a rock star.

    Another show Sunset Tan looks at Beverly Hills, Malibu beach life. The wealthiest mansions and homes in the Summer become vacant. They rent for $30,000 a week from June till the end of August. Rich families from across the world come in. Their kids hang out in nightclubs, drive sexy cars.

    We are doing a show on the New York socialite scene. Our aim is to expand beyond Hollywood. We will look at other wealthy people who are becoming a part of what we call pop culture.

    I believe that you are creating original content for Asia. Could you shed light on this?
    We will premier a show called Young Hot Asia. This is a documentary about 15 of the hottest young Asian stars. They are making a mark not just in Asia but also in Europe and the US. There have always been the Jackie Chans. Chow Yun Fats and Michelle Yeohs but in the last three years you are starting to see Asian talent that nobody had heard of before making a noise
    overseas.

    We will do specials on film festivals held in Asia. We will look at how Asian content is influencing television content in the US and in Europe. Ideally with India there should be 70:30 mix of
    Hollywood and Bollywood content. We can also have the Indian perspective on Hollywood. We can shoot in India and focus on people who are fascinated with Hollywood.

    The problem is that since we are launching on digital tiers it cannot support a great deal of local production.

    You recently hired American Idol host Ryan Seacrest. How has he helped boost the channel’s profile?
    He has become more than just our news anchor. He is also our Red Carpet host like for the Oscar Awards. He is pretty much the spokesman for the channel now. Our news ratings have risen by 50 per cent.

    The median age for our news has dropped to 32 from 38 which is very low. It is also rare. National broadcast news tends to have a viewer age above 50. Ryan is bringing the younger American Idol audience with him.

    What are the challenges in doing celebrity news vi-a-vis regular news?
    Access is a challenge. The audience has an unending desire for gossip and for paparazzi type footage of celebrities. They want to celebrities particularly when they are not on the Red carpet all beautiful and made up. There is huge interest in looking at celebrities when they are not prepared. With E! our main source of content are celebrities and their publicists and agents.

    We have to ride the line to feed the audience what they want. A lot of people cover celebrities in a mean spirited way. We need to avoid that and provide the audience with what they are looking for. When cover celebrity news you have to remember that the publicists are very powerful. Unlike other kinds of news where you are just reporting the facts here you have publicists and PR agents who are constantly trying to skew the way we cover things.

    Don’t you get accused of pandering to the stars to get access?
    (Laughs) We are not a news company like CNN whose aim is to report in an unbiased manner. We pander to the stars on some shows but there are others where we do not. We have a documentary series E! True Hollywood Story that looks at stars who have fallen due to factors like drug use, sexuality, extra marital affairs.

    We are doing one on Kirsten Dunst who am I sure is not going to be happy about everything that is on the show. We did not get information by talking to her but through sources. It is covered in a very realistic, unflattering way. On the other hand Celebrity Profile celebrates stars. So we do both types of programming. We don’t apologise for it.

    What are the other channels in E!’s portfolio?
    We have a channel called Versus. It focusses on outdoor sports like skiing, hockey, snowboarding. It is not about extreme sports but sports that viewers are very familiar with. The other channel is G4 and it focusses on videogames. Its target group is boys 12-29. We will not launch Versus in Asia right away.

    That is because you buy sports regionally. So it is difficult to have a pan regional network for it. I am more interested in launching G4 in Asia and India. Internationally G4 will launch late next year.

     

    In India the government has banned FTV for two months. A similar fate had fallen on AXN at the start of the year. I would appreciate your views on government regulation.
    India is not quite as strict as Malaysia and Singapore. We have a feed for those two countries and the content is not as open as what we air in Australia and New Zealand. We could air the Malaysia and Singapore feed in India.

    This feed is more on the conservative side. As India grows I would eventually look at having a feed just for India. At the moment though the digital platforms in India do not make it economically viable to have a feed just for this country. Any international broadcaster who is planning to enter India and have a separate feed just for it has no plans to breakeven. When subscribers grow for our channel in India then we would look to have a separate feed and we would be looking for more leeway compared to Malaysia and Singapore.

     

    One challenge for media firms in the digital age is re-purposing of content for mobile and the Internet where consumption is increasingly taking place anytime, anywhere. How is E! going about this task?
    We have done well in this regard as we own all our content. Normally people who make films, dramas and comedies do not own the rights to their properties. We do not face this difficulty. Broadband and mobile can be done on a region-by-region case. We have group called Short Programming and New Media Content (Spanc).

    They launched a year and a half back and already everyday we put 90 minutes of streamed content up for mobile. It is a cut down version of the shows we make and the news that we provide. Operators can also take 20-25 minutes of clips either on a VoD basis or on a SVoD basis. Some operators only take the streamed content while others only take the VoD content. Some take both.

    Online we have a broadband channel called The Vine. It is available at E! Online. The site has 80 editorial people. The Vine is streaming video. One popular section is called Planet Gossip. It has video stream segments from gossip columnists all over the world.

    What role are merchandising and DVDs playing in helping E! diversify its revenue streams?
    I am just launching a DVD business. E! has never released DVDs overseas. We will be coming with an international DVD called Beverly Hills Plastic Surgery Secrets. It features 10 of the top plastic surgeons in Beverly Hills talking about the best way to do procedures. It looks at what procedures leave scars and which ones do not.

    How has E! Online boosted its content offerings?
    We cover entertainment news from an aspirational perspective. Other sites only have a section for entertainment news. Some sites cover entertainment from a paparazzi, lowest common denominator view.

    We were profitable through the dotbomb era and it is still profitable. Our site has been profitable for the last seven years.

    E! Online 2.0 will launch this Summer. This will have social networking. So people can chat about their favourite stars. They can go into our library, find photos of their favourite stars and swap them with each other. One can upload one’s photo of a star if one has a digital camera. Taking photos of stars is happening more frequently in Los Angeles.
  • ”Absolute number watching TV has increased 50%, we should be paid for that’ : Joy Chakraborthy – Zee Entertainment Enterprises Ltd. executive vice president, head network

    ”Absolute number watching TV has increased 50%, we should be paid for that’ : Joy Chakraborthy – Zee Entertainment Enterprises Ltd. executive vice president, head network

    The biggest bouquet of channels on Indian television and the second largest player in the GEC space, the Zee Network has been in the limelight recently, whether it be on the receiving end of HLL’s ad spends or with big ticket events like the Zee Cine Awards.

    Joy Chakraborthy, the man spearheading ad sales for the broadcaster, agreed to offer his opinions on the current television scenario, highlighting its drawbacks of under pricing, ad revenues that exceed distribution monies and the constant debate over cricket. At the same time he lends a word of caution to new players pacing ahead to enter the broadcast space. All this and more in a free-wheeling conversation with Indiantelevision.com’s Renelle Snelleksz.

    Excerpts:

    The big news currently seems to be around how Hindustan Lever is significantly increasing spends on your network. You have even been on record as saying you are looking at a growth of at least 100% on Lever spend in FY08 over FY07? How do you justify that optimism?
    Levers is the biggest client in the television space and we have channels across all genres, Levers is a good client for consumption also because they are perennial clients. There has been rate correction but we have also given them big properties. At the same time, Levers buying process over the last two years has changed, initially they used to buy slots that appeared at a particular time band but now they have started buying quality as well so they would necessarily have to pay for that. Therefore, there has been a jump in ad sales rates this year over the previous year.

    When you say ‘rate correction’ – what do you mean?
    The Zee network itself is very under-priced, so we are continuously correcting our rates. I have over my tenure here (which is two years) revised my rates three times, but no rate correction is very drastic, it’s really a gradual correction.

    After all we are still in a World Cup year and although India is out of the tournament, we will see loads of other cricket action as well?
    As a network, we haven’t suffered at the hands of cricket. However a lot of money is diverted there. But thanks to cricket and sport, I believe that the overall PUT (people utilizing television) will also increase, because of World Cup TV sales will also increase, so the whole space is only going to expand.

    It will eventually benefit us also, but my only concern and what I see as a challenge this year is that the unofficial currency is cost per rating point (CPRP), which has to move cost per thousand (CPT). CPT is more important and with Tam’s expanded panel the absolute number of people watching has increased by 50 per cent and we as an industry should be paid for that. Even more, if you are a listed body you also should subscribe to the CPT model, which will happen sooner or later.

    But how soon do you think the transition from a CPRP model to CPT model will take to materialize?
    The IBF and AAAI have already met on two occasions, the next one is in April. But at the end of the day this shift will benefit all of us. It’s not that it is unfortunate for the client alone, as the television medium continues to grow the cost of programming, distribution, marketing and manpower is increasing every day. With the CPT model the ad rates will go up, infact most agencies buy on CPRP and give it to the client on CPT, but after expansion the minimum rate has increased. The recommendations of these two industry body’s should materialize within a month’s time.

    It has been previously stated that Cas impact only accounts for a 1- 1.5% drop in C&S 4+ level across TV. However, with moves to extend Cas to cover the full metros and then possibly go into other cities and towns this argument cannot be sustained for much longer. How does Zee view this situation and how do you plan to use it to your advantage?
    Cas is here to stay but the thing is that Cas growth was marginal, across the Zee network the drop accounted for 2.5 per cent, which is very less in comparison to the kind of growth that we are experiencing.

    With Cas rolling out further, the pressure from media buyers on rates is only going to go up? Do you see the possibility of many channels, including entertainment channels, going FTA to protect advertising revenues? For instance, Peter Mukerjea’s Hindi entertainment channels will be FTA when it launches…?
    Sometime we really wonder whom the media buyers really work for, the channel or the client. They will always pressurize us. Do you think they deal with rate hikes easily? They will fight for each rupee just as we fight for the same. But that is what makes our relationship so lasting.

    India is the only market where ad revenues are more than distribution revenues, ideally it should be the other way round. It will be better for the industry if distribution revenue picks up. Worldwide the distribution versus ad revenue model is 70:30, but in India it’s about 35:65.

    What’s the viewership growth that Zee network has seen in 2006 over 2005?
    It’s not only about Zee TV, but all our channels across the network have done well. In Marathi and Bangla we are number one, even Zee TV from Monday to Friday is delivering for us, as it is not just about one show alone. We have such a spread across our network and as a sales head I would rather have a couple of shows delivering 4 – 5 per cent ratings rather than one show delivering 10 per cent, as it helps my inventory giving us a properly defined FPC (fix point chart), because all our shows deliver within numbers in this region providing a complete media plan.

    Sa Re Ga Ma Pa has been the mantra for the network, not only did Zee TV come back with the show but also Marathi and Bangla. I believe Zee Café is number one right now and with Zee Studio we are getting back to where we belong, which means we are getting close to HBO and Star Movies. Etc and Zee Music combined gives us better numbers than even MTV and Channel [V]. Therefore, we are trying to find ways of selling together.

    In Zee TV you now have a strong number two position sewn up? Which are the channels that you have achieved a clear leadership position with?
    Percentage wise all the channels have seen growth, but in the cinema genre there has been a significant correction in GRP’s with the number of people watching cinema drastically increasing. Today 155 -160 GRP’s is equivalent to 210 GRP’s in the past, which is an absolute number of people. Movies generally give an average of 0.8 – 1.3 ratings, which points to the number of people sampling the channel.

    What’s the current order of importance of channels on the Zee network in terms of ad sales and how does it stack up percentage wise?
    Zee TV is operating on GEC where the maximum revenue lies, it will always remain the top most from an ad sales point, followed by Cinema, Marathi, Bangla, then Café, Studio, Music and Etc will stack up accordingly. But value-wise and outlay-wise these four are the ones that deliver the maximum.

    For example percentage wise Zee TV would range between 50 – 60 per cent, Cinema would be roughly around 25 per cent, while the others will corner the remaining share of the pie.
    ‘Our differentiator is that we don’t compromise on the big channels just to accommodate weaker ones‘

    How is the selling done across the network? Is it broken up into Hindi entertainment, news, cinema, English entertainment and regional channels? Or is there some other formula you apply?
    We work on a matrix, for which we have all India heads and branch heads. The obvious thing is to present one face of the network to the media buyer without losing the immediate focus. The differentiation in the way we work is that we don’t compromise on the big channels just to accommodate weaker channels. As part of our strategy we also do network deals with clients like HLL, Pepsi, Coke, Nestle, L’Oreal for which we provide a bouquet offer. In fact, we can replace a lot of other networks because we have a range of channel genres to offer from GEC, music, cinema, regional etc. Each of the channels within the bouquet has its own respective teams which go out and meet the market and keep updating media agencies and through SMS we inform the trade of current GRP’s.

    From a programming perspective, Zee TV has gained a strong foothold between the 8 and 10:30 prime time, and even with the arrival of KBC you have managed to hold your ground to an extent. Are there any strategies in place to really get into programming overdrive once KBC completes its run?
    If you see, we did not panic at all when KBC was launching and didn’t resort to doing anything drastically different. We have a very close knit team for programming and marketing that evaluates the market and competition. Infact our primetime is not just 8-10.30 pm, we start at 7 pm and 7 – 11.30 pm is what we like to call primetime. All our properties are Monday – Friday that gives us a weekday skew of scheduling spots, which has been consistent in delivering an average rating between 2.5 – 8 per cent. Besides we also do plug repeats of Sa Re Ga Ma Pa, Shabash India and Johhny Aala Re.

    But what about the afternoon prime time? That is a band that Sony is actively looking at as well we’re told?
    This is a place we are not currently at, but would like to be in the future depending on the decisions taken by the programming team. With KBC and cricket we noticed that suddenly the afternoon was doing well for us, causing the time band to grow big time across all out channels. We have plans that will be unveiled once budgets are approved by the management for the financial year April – March.

    As for Sony, there seems to be confusion as to whether to go with reality or not. I strongly feel that soaps are the most important thing for a GEC because it gives you consistent viewers. I enter the fiscal in April with 60 per cent of my deals done in advance, on an assumption of X, that only soaps can deliver. As reality picks up only towards the end, you should have an ideal mix of soaps and reality, which as a network we currently have. This ultimately helps me sell well as I have more properties to offer to a client.
    Any significant weaknesses? And how do you propose to get it sorted out?
    As a network the year has been very good but we still have miles to go. For Zee TV alone, its just been a year since we started doing well, besides there is so much to be done within this genre.
    Also, the type of selling methodology is changing and we have to understand the move from CPRP to CPT. Going forward we would also like to focus on training people with skill sets because until now it was just fire fighting to grab the money that was lying in the market.

    What has been the growth like over FY06 and has it been in line with the targets you set? What are the revenues you are expecting to close this fiscal at?
    I can’t reveal growth figures but the growth has exceeded my predictions.

    We have infact exceed our revenue target by 30 per cent. However, we keep revising our targets depending upon demand and supply, channel performance which are fixed standards for us. But usually these floating targets usually go up.

    And what about Zee Next? There was talk that it would launch by mid-year. Is that plan still on track or is the current view that another channel might be a distraction as far as Zee TV’s focus on getting further ahead is concerned?
    It is still in the planning stage as there are various factors to be considered before launching a channel and we want to be fully prepared. But it is on our radar for this year. To say we are ‘on track’ largely depends on the market conditions and with KBC and so many channels actually coming in, it depends on how and when to launch.

    Yes, currently the focus is on Zee TV because our FPC has changed slightly. We also have programme launches, Sa Re Ga Ma Pa will return at the end of April and a few more strategies that will help sales.

    The Zee Cine Awards in Malaysia are obviously a headline event for you. Could you offer a picture as to the big properties Zee will have in the coming months?
    We are probably the only broadcasters that can say we own an award. In fact, the client gets lots of exposure by tying up with it across the network, that’s why there is a demand for it. It was within four days from the day we started selling, that we were sold out.

    How do you view the coming onslaught of channel launches? Wouldn’t the increased clutter only lead to further pressure on price points?
    It will affect the TV space causing further fragmentation but with so many channels coming in the number of people watching TV will increase. The only bad side to this is that new entrants will spoil the market, causing marketing and distribution costs to go up. Additionally, discounting rates will also get affected. But please note, it’s not easy to launch a channel as after launch it is difficult to maintain, because how long can you bleed? You’re basically into business and not into charity, so lets see how many will last?

    Yes, there will be pressure on price points. A situation will arise where there will be a lot of buying out of people as well as offering different credit periods to suppliers and this will ultimately spoil the market.

    If you were asked to offer a view on how the broadcast landscape will look over the coming year, what would that be?
    My only request would be that people should be very careful and do their homework before launching a channel. We have a big bouquet of channels and we know what it’s like.

    Just because somebody says GEC has got so much money and if I launch I will eat some of that pie, but at the end of the day it must make business sense.

    Competition will always keep you on your toes, you can’t be complacent and you can’t take people for granted. Even if the channel is performing, you have to be there out in the market.
  • ‘In-house researches are very questionable’ : Abraham Thomas – Red FM COO

    ‘In-house researches are very questionable’ : Abraham Thomas – Red FM COO

    Sitting in a make shift office with everything from ‘superhit music’ to the constant chatter of the Red FM staff around thrown in, I sit down to interview Red FM COO Abraham Thomas who mentions that the brand new FM station office will be up and ready in a few weeks. The station has every reason to celebrate – the recently declared ILT results show Red FM at number 2 in Delhi and number 3 in Mumbai.

    Indiantelevision.com’s Sujatha Sreedharan catches up with Abraham Thomas to understand the story behind those numbers and what is up the Red sleeve for the year ahead.

    Excerpts:

    The ILT 2007 Round 1 numbers threw up a surprise. Despite all the hype and hoopla around radio players, the listenership has actually seen a decline. What do you think are the reasons for this?
    Although the ILT numbers are more or less in line with our in house research, I am clearly surprised as well that despite all the high profile launches in Phase II, programming innovations and advertising concepts, listenership has dropped by 6 to 7 points in Mumbai and Delhi. I don’t know whether it’s the anomaly in sampling or data, but I would have expected it to at best stay flat. There has been a lot of effort to increase listenership, so these numbers have definitely come as a surprise.

    With radio, the basic question that arises is about ILT and its methodology. I know that people are suddenly distancing themselves from the results or abandoning the data. But my point is that we shouldn’t throw the baby out with the bath water. There are shortcomings in the ILT – the MRUC has not really been proactive and has not been looking at the broadcasters’ concerns as they should.

    More than a year ago, I had raised the issue of cross checks. A couple of suggestions I had passed on included – a simple cross check whereby after the sampler is asked ‘what radio station are you tuned in to’, also ask him to give the name of a radio jockey from that station or a radio show on the station he listens too. Even if one of these questions is answered correctly, one can actually validate that data. MRUC agreed and said that these suggestions would be implemented but again they have gone back to their old ways.

    The other suggestion we had made is that the IRS use mastheads in its survey. Radio surveys can also include audio mastheads or get the users to identify a stations’ brand jingle or ask them to identify a station’s logo id. It’s not very difficult to do such a survey. So I am extremely disappointed with the lack of any user interactive activity.

    So yes, there are shortcomings but I maintain that these are early days still. I’ve always believed that the trend across the different waves tell a story. And it is these trends that we should look at.

    Are there other methodologies that we could look at? What works internationally?
    We could look at some of the international methodology. Some of the players are now advocating what is called ‘diary method’. In this method the smaller player might be at a slight advantage as the sampler who is impaneled is is forced to maintain the dairy and is therefore more conscious of the radio listened to. However, the shortfall here is that you are not capturing the information when you are listening to it. You’re filling in the data when someone comes to collect it. So it still goes back to ‘the top of the mind’ function.

    But I still believe it works because you are conscious of what you are listening to. You can also tackle the shortcoming by collecting the diaries twice a week. It will be that much closer to the point of listening and therefore the errors could get eliminated. Like I mentioned, the small players might get some benefit since they will be listed. All in all, I am saying that we have to have a more robust method.

    You spoke about players who have disowned ILT and rely on their own listenership tracks. Isn’t that an unhealthy trend?
    I am not against in house research. We do a lot of our own in house research for our programmes and to understand our market. The fact is that when radio players disown a currency like ILT, it is a short sighted approach and we are doing a lot of harm to the medium. If you want advertisers to put in more money, you have to allow them to justify this ‘more money’. For this you need a common currency. Overall in house researches and listenership tracks are very questionable. You might call it Maruti or Indica or whatever it is you call it, but bear in mind that you are doing more harm to the medium than good.

    Because of this emerging scenario, people tend to rubbish all the research. We have to collectively arrive at one common industry currency and that is the only way to grow the ad pie. In fact that is the only way all of us can survive.

    So for a two-month-old player to disown a listenership track is very shortsighted. I don’t think they are doing justice to their own medium.

    The branding story for Red FM with its ‘baajate raho’ attitude has worked for it. Is aggressive branding a need for radio players to stand out from the cluttered space?
    Has the ‘bajaate raho’ branding worked for us? Yes, of course it has. But it’s a combination of different things. I think one of our hallmarks is that we are a ‘mass player’ doing the same things as other stations but trying to do it differently.

    We’ve been consistent with our music. We’ve been consistent with our attitude – both on air and off air. Whether its our RJs or the aggressive on ground activity we get into, they are all in sync with our branding. In fact on ground activation has played a big role for us. We’ve been visible in local trains, buses, cabs, at shopping malls or traffic signals- every time you’ve seen us there is that single consistent thought on ‘local issues’ that has made us stand out. Our music is consistently super hit. We don’t play different music at different day parts. This absolute consistency with the Bajaate Raho attitude – RJs, music, advertising- on air and off air- has really been a driving point for us helping us stand out from the clutter.

    Mumbai plus Delhi – which are what the advertisers really look at at least for now- we have managed to stay at a number two (Delhi) and close to the competition at number three (Mumbai). In Delhi especially we lead the competition by at least 2 lakh (200,000) listeners. We expect to increase that lead in the next wave.
    ‘Packaging by definition means discounting’

    The branding effort by radio players is evident; but when it comes to the differentiation factor it becomes elusive? Adult Contemporary Hits (AC), Contemporary Hits Radio (CHR), super hit only ….radio players may throw this in as differentiators. But is this the only differentiation point we have?
    Firstly and strategically as a brand we look at consumer benefit on two levels. At one level we are offering them a very functional benefit – Entertainment. Music, cricket, Bollywood, music and even the local programming all of these form part of mass entertainment that we look at. In this stage we have decided to be a mass market player and therefore we have decided to stick with content which is not very different from what others are playing.

    Within music, like I mentioned, 24 hours a day we play the same music. It’s like a hot water strategy, you open the hot water tap and that’s what you get all the time. There’s no retro at night and house wife in the afternoon kind of music. We also promise that every song we play is not just a hit, it is a super hit and we arrive at that through our research.

    This is very different from our competition which no doubt plays a variety of music but it may be a hit song, or an unheard of before song or even a tomorrow’s hit. We are very clear that we play the super hits of today.

    We also believe that there is an aggressive differentiation on the emotional level- through content and packaging. That is the differentiation best exemplified by our ‘baajate raho’ line. If there is a topic that touches or concerns a common man in that city, we will play it, we will bajaao it. Clearly over the last year and a half, bajaate raho has become a local parlance. We have Bollywood coming on air and saying ‘please don’t bajaao us’, we have cricketers saying ‘you bajaaoed us today’. We have on air properties like Angry Ganesan, Kamla ka Hamla and Sharmajis ‘bajaaoing’ different issues. We have created a personality around Red FM.

    This functional and emotional benefit combined together is what sets us apart from competition. We also believe that this is a rule of three. The top three players will make most of the money. If you want to be in the top two or top three then you have to be mass market.

    If you are willing to be a niche, then you concentrate on different genres of music and programming formats. So you have to decide whether you want to position yourself as a mass player or a niche player. We clearly decided to be a mass player and we are gunning for leadership. Niches can be profitable too, provided you find your niche and market it aggressively.

    In a three to four player market, radio stations staying ‘mass’ may have seemed plausible. But in a multiple player city like Mumbai and Delhi, will it help to stay ‘mass’.
    In our case, we’ve consciously tried to build personalities within the radio with RJs like Malishka and Nitin who are likely to bajaao you if you meet them on the streets or within the studio. So our RJs, music, cricket will help us stay mass and we will try and build a personality for our station to stand out.

    There are format radios coming up that claim more music less talk or on the other hand talk radio. What’s in store for these stations?
    There are radio stations that are looking to play Hindi plus English music and for sure they will get their audience. You can go entirely English or play regional music – Punjabi, Gujarati, Marathi – you can differentiate on the context of language. You can also create a differentiation in terms of the content – for example talk radio.

    It is possible that these players might struggle in the beginning to monetize their content. While the top three will run away with all the money, the rest will find it better to define their target and then it depends on how well you service your segment.

    You can be a comfortable niche and make money. I believe that within a year or two radio stations and their audiences will get more defined. People will know where to go for what kind of music. One thing is very clear. You cannot be all things to all people. The leader who came into the market first, positioned himself very consciously.

    The radio entrants now will be forced to sharply focus their audience. The flip side of focus is that you have to give away one part. You decide your turf and then you focus.
    Within the mass space – 70 to 80 percent of the ad pie will be taken away by the top three.

    With the sheer number of players entering the markets, is there a fear that the space is getting cluttered or there are chances of a consolidation happening anytime soon?
    That is not what international trends show us. There are other cities in the world which have a number of stations catering to different tastes. There is a space for more stations to come up. But one of the reasons why we are still not getting a sense of differentiation is also because it is not possible to have more than one brand in the same city. When stations are allowed that there will be greater branding as well more genres of radio operating in the space. For now, since you are allowed only one station you want to be the biggest and the best.

    Given these constraints, where do you go from here?
    We have decided to be an entertainment station and if we have decided to be in the entertainment space then we have to work around these parameters. If we want to get into news and current affairs, then those are additional avenues. If cricket commentary was to be allowed tomorrow and I want to carry it on my existing station, I would have to do that at the cost of my music. There will be incremental new players who will come in and take those slots.

    But currently we look at a void in Bollywood entertainment and we are filling up that space. But the regulatory policies are fairly good and we are happy the way we are progressing for now.

    Almost every radio player says that – very happy with the way things are…
    If you were part of the Phase I, paying those exorbitant fees, you would be very happy with the playing field today as well.

    Non traditional advertising or activation units may be the new mantra but radio players have identified its benefits pretty early on. But where does it go from here?
    If you look at the three media- print, television and radio – there is a very distinct line dividing content and advertising. In television, you might blur these lines with programme placement and contests but in radio it is a seamless medium.

    Advertisers have been asking to be included into radio content a lot more, without being too obtrusive. Advertisers then started asking us to help them with 360 degree solutions for some of their products. We had a Ford Fiesta come to us and say that we have a car parked at a mall, can you have an RJ come down and do some gig around it.

    More and more people are asking that extra bang for the buck. This is the genesis of activation. It has also helped that advertisers have complained that there is a lack of a single, credible agency to carry out its promotions nationally. This is where we step in.

    Red Activ works on two premises- we build properties on which multiple brands can be built. The 93.5 Car rally worked that way. We also do single brand activation, where we look at solutions for clients. It is a natural extension for us and our medium is used to drive footfall for the client.
    In this advertiser driven scenario, do you think having a station presence across the country would help. Would you look at scaling up?
    The activation is an idea business. It is about an idea which the brand can then ride. Radio is a medium between the idea and the operation. It is driven from the fact that I have an idea, not that I have a radio station and therefore I look at activation.

    Sure it’s an advantage if you have a station in that city so that you can leverage the local market as well.
    On the same note, some radio players believe that the success of a radio station is in leading a particular city not in its scale.
    Fact is if you want to reach your audience and advertiser in a particular city, you have to be relevant in that city; you should connect in that city. This is the basic premise on which the advertisers work. I don’t want to be a number 6 player in Pune; I want to be a number one or two in any market.

    That is the first factor. Then is the issue of packaging. If I am in twenty cities then it is easier for me to package it in all these cities collectively. I believe I am number six in 45 cities; therefore I give you a discount of 10 rupees. But what is your relevance in priority markets? It is the priority markets like Mumbai and Delhi that sets the trend.

    Packaging by definition means discounting. In our media industry, people don’t package their media collectively. They will sell television separately, radio separately and print separately.

    We believe that we have to sell premium. You can’t just fall back on sheer scale; you have to be relevant in each city.

    But please bear in mind, that at the end of the day, packaging means discounting.

    Considering that the Phase II cities are mostly non metros, are advertisers even excited about this kind of packaging?
    The non metros opening up are relevant to sectors like FMCG or telecos but the bulk of the advertising is still restricted to the top 8 metros. What happens is in the smaller markets it is the local advertising that will have a dominant role.

    So while in the larger cities, 70 percent is corporate advertising and 30 percent is local, in non metros the story will be reverse. Besides the smaller markets are markets of tomorrow, while these are markets of today. So yes, you will have to invest in the markets of tomorrow as well.

    They will create new advertisers and pull advertising away from local media.

    You’ve been called a reminder medium, a secondary medium, an incremental medium. But are you still playing second fiddle to mainstream mediums?
    Right now we get three percent of the advertising pie, while internationally that number is closer to a 6 to 8 percent. In Sri Lanka, the radio advertising amounts to almost 20 percent. Unless the share becomes about 8 to 10 percent, it is not viable for the advertiser and we understand that.

    Secondly in other countries, radio evolved and developed before television came in. In India, it is the reverse. There is a lot of television hangover that is happening. Until recently, the creative agency, the client and the planner were more worried about meeting their objectives in the primary market – television and print. In radio, they invariably did not have the time to create ads for the medium and would pass off television jingles to play on the radio station as well.

    Lastly and more critically, there is not enough information to justify the advertiser’s faith in the medium. We’ve spoken about the methodology, it encourages confusion. Unless you get a currency where advertisers can confidently say ‘yes I can put my money over here and this is the reason I want to do so’ the ad pie will not grow.

    But it is changing. Brands are being launched on radio. We’ve created a creative solutions team within our station that works for various clients – we say that don’t give us those television commercials, give us a brief and we will create an ad that is more relevant to the medium.

    But data that justifies the spend is a big concern. Most radio players however look at this as an advantage to pick and fight over each other instead of viewing it as an industry issue. They look at it and say … ‘good!let the small players bleed; we will look at how to milk this best’. There is a bit of a short term consideration. It will be a while before this matures into a more robust industry body.

    What would the road map for Red FM look like in the coming year??
    Radio is projected to grow rapidly. The growth however is more geographic at this stage. Within the city, the growth is encouraging but at a slow pace.

    In our case, we realized that a lot of our listeners are connected to our personalities, our RJs, our properties like Angry Ganesan or Kamla and therefore we have made them available to download on the mobile phone. We launched an initiative called the Red Mobile. We work with mobile2win and you can download all these properties for a price. That’s a logical extension. We are also looking at our net presence. In fact our site should be up this month. It will be interactive – celeb chats, blogs, trivia – you will find them all.

    Right now of course we are looking at cricket. We have contests, tie ups and loads of prizes. As part of this initiative we have a tie up with Sports Bar at Phoenix Mills in Mumbai. We plan to extend this to other cities as well.

    Radio is no longer a passive medium. It is now well and truly an active medium both for the listener and the advertiser. By the end of this year we will look at local advertisers and how to target them as well.

    But bottom-line – We are gunning for leadership.
  • ‘Our aim is to come up with total telecom solutions’ : Rajiv Agarwal – Essar Telecom Retail

    ‘Our aim is to come up with total telecom solutions’ : Rajiv Agarwal – Essar Telecom Retail

    The mobile retailing space is hotting up in India. Essar Telecom Retail, an Essar group company has entered mobile retailing in India with the launch of its “The MobileStore” outlets across the country. The basic aim is to be a complete telecom solutions provider.

     

    It has tied up with global media firm Virgin to provide the backend solutions like customer care. This marks Virgin’s entry into India’s burgeoning mobile sector. Virgin founder Richard Branson believes that this is an opportunity for the two parties to fundamentally change the face of mobile retailing in India.

     

    Indiantelevision.com caught up with Essar Telecom Retail CEO Rajiv Agarwal for a quick chat on the plans.

     

    Excerpts:

    Could you give me an overview of Essar’s mobile retailing initiative?
    This is a chain of retail stores that will serve as one stop shop for the needs of the mobile consumer. We are looking to fill a void that is present in the retail market. Today we have international players on the operators side, on the manufacturers side. But on the retail side we do not have an organised player. The customer is the most important element as all these people are working for him/her.

    As the number of mobile subscribers, users becomes more and more the market is becoming more complicated, which has created a void. Our aim is to come up with total telecom solutions for the customer.

    What are the different products and services being offered?
    One can buy cell phones, get repair services, do bill collection. We also have value added services like ringtones. We have media services like games, DTH connections, ipods, cameras. All are fast moving.

    What is the synergy that the group has in setting up telecom retail?
    Essar has decided to be in retailing in all their core businesses. We have been in telecom over the last 12 years. Our aim is to get closer to the customer. We have knowledge and awareness about telecom.

    As per research, what does the mobile user expect from a mobile retail chain and how is Essar going about fulfilling his/her needs?
    The mobile customer is looking for a range of products that he can touch and feel. He/she wants a store that is next to his house. He wants value for money, after sales service.

    Why did you decide against going the franchise route for your stores?
    There would have been the risk of our brand value being diluted. Also you have to manage many entrepreneurs if you walk down that road. This is a business where you cannot allow your service proposition to get diluted.

    The franchise route would have meant that there would have been no difference between us and any other mobile store.
    ‘We have media services like games, DTH connections, ipods, cameras. All are fast moving‘

    Given that Indians are an extremely price sensitive won’t it be difficult for mobile retail to make a margin and have sustained revenue?
    That is the case for any product. We have developed our business model keeping this in mind.

    What is the investment being made and how many stores are being set up?
    In the next three years we are setting up 2,500 stores at an investment of Rs 1,250 crores (Rs 12.5 billion) across 600 cities.

    Over 70 stores have already been launched in places like Mumbai, Delhi, Kolkata, Hyderabad. In the next six to eight weeks we will have opened up another 100 stores. In the next six months we would be operating 700 stores.

    The stores are in three formats – large (1,000-1,500 sq ft), medium (800-1,000 sq ft) and compact (200-500 sq ft). The ratio being identified is 20:60:20 across large, medium and compact stores respectively.

    We are looking at a breakeven of three years for the business. The stores will cost between Rs 500,000 – Rs 5 million each to set up.

    What are the factors looked at to select each location?
    You look at places where customer footfalls are high. This could be in a mall or on a busy street. We will have the shop in shop concept to a certain extent going forward. Around 15-20 per cent of the stores will be in Metros.

    In terms of revenue how much comes in from where and who are the companies you have tie-ups with?
    Handsets contribute to 75 per cent of our revenues. We have tie-ups with all the major manufacturers like Nokia, Motorola, Sony. Mobile repairs are our core area. We have trained people in our stores who can look after the problem. We have straight tie-ups with the manufacturers and operators.

    We have a tie-up with Mauj Telecom for mobile games. For DTH there is Tata Sky, Dish TV. There are also opportunities for in-store advertising and merchandising.

    Could you talk about the back end solutions that have been put in place?
    We have a tie-up with Virgin. They bring retail knowledge in terms of softer skills in terms of customer relationship management. The deal is for brand licensing, technical and consultancy services.
    Virgin will provide their expertise in the areas of branding, marketing, customer care, store operations and staff training.

    We chose Virgin as that brand stands for good quality, brilliant customer service, innovation, fun and good value.

    Finally what marketing activities are being done to create awareness?
    We are airing ads during the broadcast of the cricket World Cup. A large portion of mobile users will be watching the event. We will also be doing a lot of print and outdoor activities.
  • ‘CNN is an American-owned news channel, but we are not America-centric’ : Rena Golden – CNN International senior vice president

    ‘CNN is an American-owned news channel, but we are not America-centric’ : Rena Golden – CNN International senior vice president

    A little girl from a small town in Bihar who migrated from India to the US when she was just six years old, Rena Golden is today at the very top rung of the hierarchy at global news major CNN International. As senior vice president, she visited India this week to announce the latest edition of “Eye on India”, focussed this time on the youth power of the country.

    Credited by her colleagues with amazing skills, journalistic and managerial, driving the world’s largest news broadcasting company CNN from just an all-American channel (“I joined 21 years ago when people used to call CNN Chicken Noodle News!”), to an international one reaching 2 billion viewers across 200 countries, she still retains a disarming level of simplicity.

    It is perhaps natural that an American of Indian origin would also be the head of CNN’s Diversity Committee, ensuring that community parity is maintained not just within the organisation but also in the dissemination of news.

    Golden, who studied in two universities in North Carolina, graduating in English with Honours (“My father wanted me to be a doctor, but I wanted to study English”) and started working with CNN from 1985, spoke to Indiantelevision.com’s Sujit Chakraborty on the present status and future plans of CNN.

    Excerpts:

    You have a large hand in shaping the strategic direction of CNN. What is the most significant area you are looking into at the moment?
    I think it is expansion of news beyond the television sphere. We are on the Internet, mobile phones… I think what CNN is interested in becoming is your news source, on whatever platform it may be… your phone, your Blackberry… We want to become your news information source and travel with you, wherever you are.

    CNN’s news website is a tremendous success which attracts a billion users every year. And CNN International has just launched its news service on mobile phone. We are also looking at video on demand and IPTV… we want to be platform agnostic.

    How is IPTV doing in America… there is content available on that platform here in India as well, but the problem is we do not have downloading technology or bandwidth?
    I think even now in the US market the bandwidth is still not there, but the market is growing in South Korea, in Hong Kong and in some of the Nordic countries in Europe, where we can stream the CNN news channel completely on mobile phones. We are still not there on that platform in the US, but I think the important thing is to have your foot in all the areas. CNN is known for that and one of the areas we are looking at is (improving) technology in news gathering.

    That is my second question, in fact. You also deal with the technology of news gathering?
    Yes, for instance, earlier, when we would go for coverage, say in India or the war in Iraq, we would have to travel with 30 suitcases of equipment. Now, thanks to CNN working with Sony, with Panasonic, and other organisations, we have cameras that fit in a suitcase, which you can take as your carry-on luggage.

    When we went to North Korea, we could move in easily and cover news in a much easier manner, which is often cheaper.

    What are the latest innovations and what are the next technological frontiers in news gathering and dissemination?
    Things are getting smaller and smaller… we are looking at shooting footage on a mobile phone. Only last week, we used a Nokia mobile phone and went “live” on CNN. You don’t have to book satellite space. You can just dial into the CNN offices in Hong Kong or Atlanta, and stream news live, so technology is getting smaller and mobile.

    CNN has more than once made public its ambitions to go regional and local. But at least in the context of the Indian subcontinent it has not happened. And now with the explosion in television news in the country, it looks like it never will. I can see your CNNj in Japan, then Turkish and Korean CNN, so why not in India?
    OK, what we have done in India goes beyond what we have done in some of the other regions. We have partnered with IBN and additionally, we have CNN International which covers India not just for Indians but for the rest of the world. Our partnership with CNN-IBN is less than a year old but it has emerged as the number one news channel in this country. That partnership is as strong as what we have in some other regions, say in Turkey where we have tied up with a media channel that broadcasts CNN in Turkish.

    I think there are different models for different markets and the model that we have for the Indian market… Wow! I mean we couldn’t have imagined this. There could be a partnership with some Hindi channel… I am not ruling that out, but what we need is as strong a partner as we have in CNN-IBN.

    We do not have anything to announce here (in terms of a regional channel) so far. We believe in having local partners and we would not do that in India and open a Hindi channel for instance, without a strong local partner. Local partners understand the country much better… So what you see, this partnership with CNN-IBN, is one of our proudest achievements.

    Chris Cramer had told us last year that BBC has a certain Mark Tully factor advantage in India. For the first time though, now both CNN and BBC can be said to running neck-and-neck. It’s been a long while coming but don’t you think it has come too late in the day because of the way Indian news channels have captured virtually all the mind space?
    Sixty years… not just Mark Tully… I think it is a huge association.

    I think also right from the days when we were ruled by the British there was some association, so what do you feel you are looking at here to change that?
    This is the only market where BBC leads the CNN. I think you just put your finger on that. India has a long historic association with Britain and BBC, especially BBC radio, which was here decades before CNN even came to the market. I respect the BBC, no doubt about that.

    But where CNN excels is in breaking news… that’s our DNA, the DNA of CNN-IBN. We also don’t have a British style of presentation, a British view of the world. We have journalists from 50 different nationalities covering news for us. Don’t get me wrong, I have a lot of respect for BBC, but I think CNN has very successfully differentiated itself.

    Unlike a few years ago, when even a major train accident here would not be covered on BBC or CNN, there is a lot of India on these channels now. But I also feel that there are documentaries that need to be made on India. What are the kinds of documentaries you think CNN ought to do on India in the near future? Do you have a kind of road map for that?
    I am glad you brought up that question. CNN has a documentary division, and one recent documentary was on Britain’s Muslim population. We also have a couple of them from Iraq and from Africa, etc. We are also doing documentaries with foreign filmmakers. We have partnered with a filmmaker from Sierra Leon who has done five or six films on the major issues of Africa. That gives us the opportunity to get into some of the under-reported stories of the world. So we are looking at filmmakers to partner with for making documentaries.

    But having said that, the important thing to remember is that we are not a documentary organisation, not a documentary channel. Our first and foremost work is 24-hour news. We believe in context, not only what’s happened but why it has happened.

    Everyone knows now India is changing, especially in the economic and knowledge sectors. What are the specific areas of change that excite you the most and why?
    I think it is the influence that Indians are now having in the diaspora… and not just the diaspora, because many Indians are also coming back home. India’s influence outside India is a story that really excites me.

    In the US, Indians are doing a lot of things. There are Indians heading technology companies, there are a couple of Indian filmmakers in Hollywood, and of course there are those in medicine and engineering. But one area where Indians are not there in the US is politics, which I think is important for us.

    The other thing, which is the topic of this edition of Eye on India, is the Indian youth. There is no other country in the world where 50 per cent of the population in under the age of 25.
    ‘In the early days of the Iraq war, the media was not as critical as it should have been and a lot of American society regrets that‘

    Looking at the global picture, is there a region-wise break-up of how it all reports back to Atlanta? How does it work?
    Well, we have an Asian production hub in Hong Kong and a hub in Europe and the headquarters is in Atlanta, but we as an organisation are very decentralised. In India, we have 15 people in the bureau, but we cover India primarily by people who have been journalists in India. It is not just Atlanta dictating what stories are to be done, it’s journalists here saying that ‘these are the stories on the front pages of the newspapers today. We think these are the stories that need to be told about India’. It is people who are working in this country, living, breathing India that drives our India coverage (and likewise, across the globe). That is what makes CNN so unique.

    And speaking of regions, can you offer how revenues stack up in percentage terms?
    Our revenue increase over last year is 22 per cent. Which is very good, very, very strong growth.
    A lot has changed in the last 5-7 years. A global news perspective is not solely in the hands of the likes of the CNN and BBC anymore. The impact of Al Jazeera has been well documented. Now the French have also launched their own global news channel. How is CNN changing to meet the challenges of a world view that is no more ruled from a western Anglo-Saxon perspective?
    Let me put this clearly. CNN International is American owned, and we are proud of our American ownership, but CNN International is not America-centric. It would be crazy for us to be broadcasting internationally but from an American perspective. From the business point of view, that would be ridiculous.

    But I think competition always makes us stronger, because competition means we have to be always ahead. We welcome competition. We have been there for 25 years and there is vast acceptance, because CNN’s journalism is top notch. And we feel there is enough room for others as well.
    And we have been talking about ethics and so forth, so what are the checks and balances that are in place to make sure that stories are fair and accurate?
    First of all, we have the standard-practice guidebook, which, of course, all news organisations have, which all CNN journalists have to abide by. Obviously, the journalist reporting knows the story best, but that story is vetted by many people. Along the way there are many different people who touch that story and fact-check it before it actually goes on air. We are much more interested in getting a story right than getting it ‘first’. We are the Breaking News leader, but we would not be that if our objectivity failed.

    Yes, but say you hire me from India and I, for that matter no one, can be totally objective… maybe I am slightly with the BJP or the Congress or whatever, so a tinge of bias creeps in. So how do you correct that? At the desk level?
    Yes, there is always the issue of being subjective, but there are things like hard facts that cannot be changed. That is why we lay so much emphasis on attribution. If you watch the news channel you will sometimes find that one person has been quoted but the other one has not been… this happens sometimes even if the journalist wants to be objective. It’s in their DNA, but it happens, so we tell them, ‘Hey, that guy’s quotes are not there, so go get it’.

    There have been occasions when a story has been held back for a week to make sure that all the players have got the chance to comment. I can’t tell you how much CNN lives and dies by its credibility factor.
    We’ll pick up on a touchy issue, with American media in particular – “embedded” journalism. Isn’t the way the whole Iraq story has developed a severe indictment on the way the media reported on it from the very beginning? What’s the point of the truth coming out now, when all that is left is death and destruction?
    Well, I think the media had not been as critical as it should have been in the early days (of the Iraq war). Not only the media, there are many politicians and different segments of American society that regrets not having been more critical (at the outset). I think that a lot has changed.

    Because and after the massive Iraq fiasco?
    Because of the war in Iraq and other reasons, because of the political season in general, but I do think that a lot of that has changed. I do think the media has got a lot proper.

    Veering off from your day job, as it were, you are on the advisory board of the Atlanta Woman magazine. Tell us something about the magazine and your area of interest in this.
    I am no longer on the board, but this is a local magazine from Atlanta focussing on the businesswomen. I think as a person involved with international news, I am always interested in what’s happening outside my world. And as a mother, as a wife and as a citizen of Atlanta, Georgia, I also have my responsibility of giving something back to my community.

    As the head of the CNN committee on diversity, what are the crucial diversity issues you face and how do you resolve them?
    The diversity issue we face overall is to maintain the diversity of coverage, to be sensitive to diverse cultures. With American, Latin American, African, or Indian people, all working together in the newsroom, it can be tremendously exciting but there is a lot of opportunity of misunderstanding. And what we encourage is a very open communication in our newsrooms, where people can talk to each other honestly, without feeling they are being attacked. But it’s really difficult to work with such diversity of cultures. It’s a tough challenge.

    Sure, but the question is, how do you resolve that?
    We resolve that by getting people to get together and discuss issues together. And we also give people opportunity to take their issues up without putting their names. If somebody wants to talk to me about a report that he or she feels has been unfair to a particular group of people, they can send me an unsigned note.

    We also hold functions where I may not be there but my managers are there. Transparency is the most important thing.

    You are in charge of talent scouting too. What do you think of the talent pool in India in your line of work and how do you plan tapping that pool?
    Well, I’ll tell you what kind of talent we are looking at. There is a lot of talent here. For CNN International, the presenter has to be a really strong journalist, people who know how to write, and more importantly, people who can speak extempore without a script. There are times, during Breaking News stories, when people have to work for four hours at a stretch in front of the camera without a script. These are people who have to have a fairly strong recall, they have to know the history, the culture, and feel confident enough to express themselves without the written script.

    There are people who differ with me and say, ‘No, an anchor is very different from a reporter. They have to look good, have a good voice, look polished all the time… and it’s the reporter who has to be out there and do the story. No. I can’t afford to do that in CNN International.

    Our anchors are the ones who are on the field as much as possible. Because to my mind, there is no difference between an anchor and a reporter. In the case of Lebanon issue last year, for example, I had three or four anchors going from Atlanta reporting alongside CNN reporters.
  • ‘Size of ready to eat market Rs 700 m.’ : Ravi Naware – ITC Foods Division CEO

    ‘Size of ready to eat market Rs 700 m.’ : Ravi Naware – ITC Foods Division CEO

    ITC Foods, the foods division of ITC Limited has built many brands and sub brands through aggressive advertising and marketing moves. This year the foods division is expected to add about Rs 10 billion to ITC’s annual turnover. ITC has recently announced the launch of their sub brand of biscuits – Sunfeast Sachin’s Fit Kit under their flagship and umbrella brand Sunfeast to coincide with the World Cup that will be played over the next few weeks in the West Indies.

    ITC Foods Division CEO Ravi Naware shared some insights into the various aspects of the business with Indian Television Dot Com’s Tarachand Wanvari. Excerpts from the interview.

    Excerpts:

    The promotion spends in the World Cup, what would be the proportion for them vis-?-vis your annual spends? You must have a separate budget for the World Cup. Could you share the figures?

    Of course, we have budgeted a specific amount for the World Cup. The World Cup is expensive so it’s a fairly decent percentage.

    You have said that a major portion of the World Cup spends budget will be towards promotion of Sachin’s Fit Kit, could you speak some more on this?

    I think if we don’t put money behind this brand, we’ll be doing a disservice to ourselves. We have launched the brand with Sachin’s name associated with it. On its own it’s going to be high profile from the reception point of view. I don’t mean that we are doing a razzmatazz kind of a launch. Sachin’s Fit Kit and the World Cup, the whole thing matches.

    How big is the ready to eat market?

    I really don’t have a number, because I find that the ready to eat market is not very well defined. You get tinned rasgollas. Will you include them in ready to eat? Some people do, because that is ready to eat, processed, cooked and packed. The definition is not very clear on that segment. If we stick to ‘so to say’ dinner table items, but then rasgollas can also be a part of the dinner table item, we’re talking primarily about vegetable curries, paneer, chicken, birayanis, dals, this is the kind of market we construct, then we have close to 48 per cent market share. But then you go and ask someone else, they are very likely to say that claim is too high.

    By your definition, who would be number two and three in the ready to eat market?

    No 2 would be MTR Foods, next would be Kohinoor. But then there could be disputes too, because I also make halwas like gajjar ka halwa, moong dal ka halwa, we include those. Comparatively, biscuits or soft drinks have become well defined markets. So you won’t include potato chips in the biscuit segment. You don’t include fruit juices with soft drinks. Its undefined, but not a huge category.

    What about your Kitchens of India brand of ready to eat? How does it compare with Aashirvaad ready to eat?

    Both would be about equal in size. Plus, we have a fairly large export market, which add a fairly large proportion to our sales. Only Kitchens of India are exported.

    So what is the size of the ready to eat market?
    It’s approximately Rs 600-700 million, the way we look at it.
    ‘If you are building a branded business, the brand must acquire power, stature and then you can generate the consumer pool from that‘

    How are your Pastas doing?

    We’ve got some very, very loyal customers who are quite happy with the performance. We’ve launched Benne Vita. Many people know how to make good pasta sauce, but the pasta is difficult to make. Earlier one had to buy imported pasta, now they can buy our Benne Vita 400 gm pack.

    You are competing with Nestle’s Maggi in terms of noodles with your pasta? Has it reached anywhere near that stage?

    Well I suppose in terms of the mental space we are competing with Maggi. But we are small and Maggi is large. It is a different product, which by now is a fairly standard one. There are lots of unbranded noodles also available in the market, maybe a similar genre, because that’s become a very popular item. Others are also getting into it.

    Compared to the existing players, you are new, just four or five years into foods Aren’t you spreading yourself with so many products?

    In 2002, when we entered the food business, if you wanted to enter almost any food product you would have competition that had already established itself. Nestle had a fairly large range of products, they have been in India about 60 years, Parle is about 60-70 years old, Britannia has been around for almost a 100 years. Then take tea or coffee, you had Tata, HLL or instant mixes, there was MTR and Gitz.

     

    Pasta has been introduced by us for the first time in India. If you say that we compete with noodles, then noodles have been around for 25 years or more. We are late entrants which is a fact of life. And as a late entrant you don’t want to get into chocolates. Cadbury and Nestle are already there in that space. You name any category, dairy products – you have Amul and several others already there. In that sense, there was hardly any totally new “New category” where we could enter.

     

    We decided to enter into those categories where we felt that we had some inherent competitive advantage. For example, when we entered atta (wheat flour), we said that we’d leverage our entire e-choupal connection. Having entered into atta and this area, we thought that we would enter into the wheat vertical space. So we got into biscuits, we got into pastas, and there are other products ideas based on wheat which would be relevant.

     

    Through e-choupal we buy larger and larger quantities of wheat, and at that stage, there are scale economies which give us benefits, selectivity, we can choose the right kind of wheat for the right kind of product and so on. Secondly we got into confectionaries because India has 3 million cigarette selling shops. ITC was present in those shops for the last several decades. Most of these cigarette selling shops also sell candy. So we thought that we’d have that advantage in distribution.

     

    This is how we chose the broad categories that we would enter where we felt that we had some competence, some in-house capabilities.

     

    For Kitchens of India, we had all the great recipes from our hotels. So we could make a Dal Bukhara, we could make a Chicken Chettinad, we could make a Paneer dish and so on. That was how we selected the products, otherwise, for me it was impossible to find a completely new line that we could get into.

    Do you have advantages because of your e-choupal initiative?

    We do have some advantages, we are able to source wheat through e-choupal for our atta (wheat four). We are market leaders with 15 per cent market share in the branded atta segment, which is upwards of Rs 30 billion in India. The market size `is across all brands, not just the ones that advertise. This means regional brands too.

    So what about bread, that too is a wheat vertical, isn’t it?

    Bread is a very, very difficult industry. It also requires specialized distribution. Just having a distribution network is not enough. You need to have trucks that need to got out at 3 in the morning, then you go distribute the bread, on the return you collect money. There are spoilages in bread, maybe 10-12 per cent of the bread gets spoilt, the manufacturer has to take it back. It requires a completely different distribution channel and method.

     

    Pepsi and Coke were already into handling bottles and liquids, they have given out coolers to their retailers, for them it was a natural entry into drinking water. Their distribution and the storage at the retail end fitted in well with their existing setup so they could launch the Aqua Fina and the Kinleys drinking waters. We didn’t find that kind of synergy with what we had for bread. I think it’s a multi local industry or a national brand industry. Each locality has its own famous bakery.

    Over the five years that you have been here, are you satisfied with all genre’s of products, or do you feel that you could have done better somewhere?

    I am very happy and very satisfied with the progress. Of course some things move much faster, some move slower. I think in Sunfeast we have had a very good run so far. Today we’re clearly the number 3 player and there is a very apparent and a visible gap between no. 3 and no. 4. A year ago that gap wasn’t so very visible. Apart from a size of 8 per cent, I think Sunfeast as a brand has acquired a good standing, a good stature in the market and in the consumers mind. And that to me is a prerequisite for building a business. If you are building a branded business, the brand must acquire power, stature and then you can generate the consumer pool from that.
  • ‘TV will continue to be important, but its importance will decline’ : Rahul Welde – HLL general manager – media services

    ‘TV will continue to be important, but its importance will decline’ : Rahul Welde – HLL general manager – media services

    For over 50 years FMCG major Hindustan Lever has dominated the Indian market with brands that have become a household name for many. Now it is about to turn over a new leaf to welcome its mother company Unilever. After having hogged the media space, especially television and now opening its doors to new media like internet and radio, the time seems right to question its experts on their outlook to the fast developing media landscape.

     

    In conversation with Sujatha Shreedharan and Renelle Snelleksz, HLL general manager – media services Rahul Welde, who is most uncomfortable in front of a camera, puts aside all his inhibitions once he begins speaking on his area of proficiency – media and advertising.

     

    Excerpts:

    With the HLL name change announced, the next question is how would this pan out in terms of a branding and marketing strategy?

    Since it’s just been announced, we haven’t really planned that out as yet. It will be put to vote in the AGM in May, after which it will get adopted and implemented.

    One of the biggest advertisers on television, HLL is now looking beyond the medium. What kind of media mix does HLL now look at? You have also maintained that TV is bound to decline?

    Television will continue to be important. However it will also continue to decline in importance. The reason for this primarily has to do with the way consumers are reacting to television messages. Studies indicate that there is a greater degree of ad avoidance, greater degree of clutter on television and that has resulted in lesser interest in television by consumers.

     

    Simultaneously people are spending more time outdoors, doing other things than just watching television. As a result television is facing a lot of competition from the other media.

     

    There was a time when there was no television and print had all the advertising – but that lasted only until television made an appearance. It ate big time into print advertising. Something similar will happen to television with the advent of radio, internet, mobile communication and other types of new media. Eventually they will fight for the same share of the rupee.

     

    I don’t think anything as drastic as the death of television is bound to happen anytime soon but it is staring into the face of a huge challenge even while other media grow at an exceptionally fast pace. The same applies to our understanding of media buying as well. Our focus has shifted to alternate media and is much higher than what it used to be two years ago.

     

    Also, I must say that there is also nothing like an HLL mix, as it depends on our brands. Some will focus on TV and spend nothing on print and vice versa, so the strategic thinking as to what to use comes from the brand and consumer lens. We are thus excited about the internet when it comes to youth brands, while outdoor and DD are key for brands like Wheel. From an industry perspective, I think radio will experience growth.

    With HLL always known to be television heavy, what happens in the case of mass channels and niche channels, what strategy would you follow in that case?

    Well, we do spend on niche and mass channels, but with the whole area of fragmentation of audiences with multiple channels emerging, where stickiness is a challenge and competition is high. Now what it really means for us is that segmentation and multiplication of channels provides the opportunity to peg note and talk to the consumer.

     

    Unfortunately, the costs have increased and given that the overall advertising pie is fixed. The ad pie doesn’t grow because there are more channels, but what is happening is money is shifting from the big to the small or from the leaders to the challengers.

     

    The growth of channels, we will see an increase in the number seconds, but what is often interpreted is that spends are also increasing in the same proportion. It is of course a big challenge as fragmentation makes the task of planning even more difficult, where agencies will produce software and optimizers making the process more sophisticated. This scenario is good for segmentation, bad for costs. Thus I don’t know whether to call it a ‘happy situation’ because after a point of time your returns become sub-optimal when costs are high. Then that becomes a worry.

    Given that you are the biggest advertiser on kid’s channels, what is the potential that you see in this space and how do you (as an advertiser) think it will shape up in the coming years?

    For us it is important, but the degree of importance it would be very low because you have to look at it from the brand and consumer fitment perspective. There are a few of our brands that actually talk directly to kids while a larger percentage of our brands look at the older demographic.

     

    Even then we are the largest advertisers. So you can imagine if kid’s were to become important then we would really have to up our spends. But the interesting part is that kid’s involvement in influencing the purchase decision is growing. Now does that mean that they participate in the decision to buy a laundry powder? My guess is that they don’t.

     

    Thus, it’s not really a major part of our media thinking but it’s interesting because there is a lot of stuff happening in the kid’s space.

    You’ve shown a lot of enthusiasm about radio. But it seems HLL mostly uses AIR and not private station. How do you view private FM?

    I see private FM as a very exciting space for us because suddenly with the addition of newer towns, viewers will have more choice in media. This viewer engagement will attract more advertising, so from our perspective which brand will resort to using radio will depend on the brand and consumer fit. Right now we are in the process of taking stock of radio advertising and as we see it increasing to about 300 stations, but more importantly the excitement is about the increase in towns.

     

    Now whom we are in partnership with has to be strategically thought out, but we are in talks with several partners. The good part is that there are new and established players coming into the fray. Even now we are the largest advertisers on AIR and FM, this will only mean that our footprint will become broader within the radio space.

    Media planners are hesitant about radio due to the lack of key differentiators, what are your views on that?

    Somewhere a woman/man is being wooed and while people begin to analyze this space I think we will get on to the bus much faster. We have in the past invested in the medium and will continue to do so. We will not wait to see who emerges as different, as differentiators are what you create. You don’t view TV the way you used to therefore, radio will also be consumed differently. I don’t know what media agencies generally view this space, for us what is important is what we can do to it. Currently, we are holding our excitement.

    Following Wheel Smart Shreemati and Rin Mera Star Super Star will AFP’s be given greater importance going forward?

    All our AFP’s played out very well for us, Wheel was the top rated show on Doordarshan. Although, it may appear like something we mounted and happened to do well for us, but the truth is we were working on it for three years. In 2004, the germ of the idea began, 2005 we tested it on a smaller channel and 2006 we took it to DD. Our planning and research helped us get to where it is as the top rated show.

     

    The challenge is that you have to combine the arithmetic of the brand, communication and commercial and get the trio to work. However, the effort required for AFP’s is disproportionate. It calls for a genuine collaborated effort with the channel, the clients and the production house. It gives a new lens to the planning effort and it’s the next practice.

     

    We have been cautious with in-films as we don’t really know how it pays back. It is one step higher than AFP in terms of collaborative effort, in fact it ends up being more of a ‘punt’ than TV.

    Talking about the online space could you highlight what is currently being done with online marketing after Sunsilk Gang of Girls and Axe land?

    We have got stuff in progress but not in the development stage yet. The Gang of Girls gave us better results that what we expected both from the returns and consumer engagement we got. The sheer numbers were amazing, we tracked all the measures and it appears the time spent by these girls was almost 11 to 14 minutes. We did it to get engagement rather than exposure and it was a collaborated effort with partners like Monster.com, Elle and Cosmopolitan. It went beyond just talking about hair to discussing everyday issues among friends, to have an extended conversation with the consumer. So both thematically and in terms of engagement it played out very well.

     

    Also with Axe we did Axe Unlimited Academy and will roll out something along the lines shortly. So will we have all brands participate aggressively on the net? Probably no. But definitely our youth brands will, because it’s really about redefining the role of engagement. Therefore for us the whole space of internet is going to grow very fast and it will grow through a combination of such websites and simultaneously through traditional web based advertising. The net allows a huge amount of interaction but it depends on how you exploit it.

    How does this translate into sales?

    This was a brand building effort, but of course everything that goes towards building a brand must translate into sales. But it is about driving brand preference and an alternate way of communication.

     

    A big change is likely to be seen which is currently under the surface, but the in the coming years the numbers in terms of advertising will show that.

     

    The only thing that we consider is the brand and the consumer, the media needs to fit into that, so if online would largely be urban, but this is also applied to the rural I-Shakti programme, however, net penetration is still restricted to urban India, but progressively it will spread.

     

    Even the outdoor space is very interesting, however it’s not being exploited sufficiently. Every time people travel, it’s an opportunity for advertisers. In fact, among different forms of media there are definitely some that are really likely to rock!

    Could you name three different media that you think will rock in 2007?

    I think for the next two-three years radio will rock, maybe not in 2007 because lets not forget that print is some 1,000 crores (Rs 10 billion) and radio only some 100 crores. If I were to have a prognosis I believe that radio will really double, because it’s just the sheer scale that cannot be ignored. But within this space there are also so many players, coupled with the lack of measurement at the moment will make it even more difficult, so who do you back, how do you know it works? Thus a half baked science gets applied. But the minute you put measurement, predictability and science behind it that will cause inflection, otherwise people will be cautious.

     

    What will also make a big shift, whether it will rock financially I cannot say, but the whole business of in-store on-screen advertising, suddenly you will find them all over the place and therefore it will peel off mainstream advertising and then get evaluated analytically by agencies.

     

    Even in the TV space, the whole area of Cas and DTH will keep the excitement alive. DTH is getting into rural space so that will be interesting. There is great action happening there as well, KBC 3 and others.

     

    Another thing is that regional media is also getting more and more important across all genres, whether it has been Marathi, Bengali, Oriya and traditionally Telugu, Tamil and Kannada have been strong anyways.

    We’ve talked conventional media and new media but HLL has always been a strong advocate of rural marketing? But the focus keeps shifting and after some time all talks of rural marketing die out. Can you give us an update on what has been happening on this front?

    The biggest challenge for us is that a large part of India is still media dark. What that means is that television or print does not really reach there. Then there is the problem of infrastructure and literacy. Therefore from our perspective we’ve really tried to concentrate on on ground activation- demonstration, sampling and events.

     

    While the problem of infrastructure, non motorable roads, etc. remains there is also a challenge of scalability. We’ve been active in the rural areas for a long time and progressively have increased our thrust in this area. The big change is of course in the scale. We have upped the scale in these initiatives.

     

    We’ve got two-three programmes which we have been looking at for the last few years. One of them is Lifebuoy Swasthya Chetana- a rural communication programme around Lifebuoy that has touched over 130 million consumers across Bihar, UP and Rajasthan. Similarly, there is Project Shakti. The Shakti Vani is a programme that we started keeping in mind communication with rural consumers.

     

    While Lifebuoy Swasthya Chetana is a brand specific programme, Shakti Vani cuts across all the brands to speak to the consumer. The action in rural India is all about being ‘their type.’

    Is there also a challenge of making these initiatives profitable? You have talked to us about scaling it up? Since you do talk about the challenges, how do you go about building your capabilities and expanding it?

    The issue is not so much about profit although there is a worry of cost effectiveness. So when you know that there is a cost involved in physically being there which cannot always be done. When I say scalability, the challenge is to do with two things – one is to do with researches on ground.

     

    If you want Western class communication to reach rural India, you need a full stream of resources which works down the line, is well trained and which understands what is being spoken about. The fact remains that the scope of the country is so vast and immense that no matter how much you do, it’s never going to be enough. Despite this, I don’t know any other company which does as much in rural marketing as we do.

     

    We work with one agency on our rural initiatives – Ogilvy Outreach and have built a strong network through our vendors. I think over time we have built our capabilities in this segment. As for expanding this further, yes we would look into that as well. We are expanding in almost every sphere and rural marketing will come under that focus too.
    ‘Big monies are being pumped into cricket on TV, but I don’t see the same quantum of returns‘

    If we could just talk about HLL brand and brand categories. You have largely spoken about brands in the health and personal care segment, in this respect has the push in the food division been milder?

    We do have firm positions in beverages. In fact, we just re-launched Taj across a multimedia campaign. There is excitement in foods but the scale and salience is very different. It is largely to do with the category and not so much to with the brand itself. Our tea brands are the largest in the category but if you look at these brands in advertising terms they are not as active as the personal care. Inevitably you would see Lux, Lifebouy, Sunsilk, Surf, Rin as large media and advertising brands.

    As opposed to the parent company, which has a strong presence in the food category, therefore would the recent global alignment following the inclusion of Unilever into the companies name, mean that there expertise in foods would be brought to India?

    It’s outside my remit to comment on that because that’s a matter of corporate strategy and how the food units would grow and I can only comment on advertising. But in totality the investments in this space are as hot as personal care and it’s growing as much. It is smaller in scale but as active.

    Finally, with the World Cup Cricket right around the corner, any new initiatives or plans for the season?

    (Laughs) You know every year there is great excitement over World Cup Cricket among advertisers and also channels. We share that excitement too, but we don’t want to be carried away by it. We will have certain things in place for cricket, some of our brands will have World Cup Cricket branding. But the fact of the matter is that a lot of money is pumped into cricket on television. The question to ask is where does this extra resource come from? It is but obvious that it is either pulled out from some other kitty or companies start following a cost cutting plan. So while I may be excited about it, I don’t see the same quantum of returns in World Cup, so I am cautious.

     

    So it is great that the advertisers are looking at World Cup. For us the larger worry is the movement of eyeballs from the general entertainment channels to the sports and news channels. Finally it’s a question of checks and balances. Is this rupee spent worth it? Any advertiser would ask himself that before putting up his money. Otherwise it becomes like a punter’s game.