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  • Anatomy of the top 100 brands 2013

    Anatomy of the top 100 brands 2013

    MUMBAI: This year, Apple has re-written history by replacing Coca-Cola, the number one brand for the past 13 years, as the new numero uno in the coveted top 100 global brands announced by brand consultancy, Interbrand.

     

    Interestingly, it’s not as if Coca-Cola got it wrong this time round. Rather, the FMCG brand has been on a successful spree; winning awards, launching brilliant campaigns, and engaging people in popular initiatives like Coke Studio. Just that technology and new media have emerged leaders this year.

     

    Says Interbrand India managing director Ashish Mishra: “If we look at the top five or ten, its technology and new media which is leading the pack and this is the trend all across.”

     

    The top 10 brands convey a message: A brand today has got to be all about the people. And how anticipation, co creation, conversation, innovation, investment in people & big data, strategic CSR and new leadership is the new way ahead. Mishra goes on to say that Apple has climbed the charts because of the Apple culture is has fashioned across the globe.

     

    East is East, West is West

     

    What emerges from the list is that most of the top 100 brands belong to the Western world. So is it to do with our white fixation or the fact that brands from the US, UK, Germany or France have made a name for themselves globally?

     

    “A brand needs to be where the top 10 GDPs are,” says Ashish, adding that apart from the brands’ financial performance, their role in influencing consumer choice, the strength they command as also recognition across the globe are important factors while determining their value.

     

    What is more unfortunate is that no Indian brand figures in the top 100. The consultancy reasons it’s all about diversification.

     

    Mishra explains that post Independence, India grew at a fast clip while business grew in various directions. For example, Tata today means different things i.e. Tata Steel, Tata Motors, TCS etc. to different people. Ditto for other Indian conglomerates, which diversified into different brands and sub-brands, which in turn grew bigger than the mother brand in some cases.

     

    “An organisational structure is important and somewhere down the line, custody of sub-brands was handed over to people (CEOs, CMOs, CFOs etc) who took charge but forgot to work towards the mother brand,” says Mishra of the irony of the Indian market.

     

    The agency is helping many companies in India to bridge the gap and be part of the global brands. And to achieve it, the agency feels the companies need to have an inside-outside perspective wherein they need to go to the right markets after creating a name for themselves here as well as compete with the global counterparts on the same parameters.

     

    Media not so savvy

     

    Of the top 100, the only media brands are Disney, Thomson Reuters, Discovery (new entrant this year) and MTV. Implying that while media may be the most influential opinion maker for readers and viewers, it somehow fails to impress brand creators.
    While the consultancy does evaluate media brands excluding publishing houses, very few made it to the list. Also, the consultancy made an exception for India and China by taking into consideration government-owned brands because of their sheer number in these countries.

     

    “The names in the list are the most influential brands globally. But if you look at the media in a broader context, then many other brands too would be included. For example, Facebook,” says Ashish. Incidentally, the top 30 brands evaluated by the consultancy in India did not have a single name from the media.
    Whatever may be the case, the names that figure on the list demonstrate that these brands have indeed managed to deliver meaningful and seamless experiences across all platforms and touch points.

  • Global adspend online to overtake print by 2015: ZenithOptimedia

    Global adspend online to overtake print by 2015: ZenithOptimedia

    NEW DELHI: Global advertising expenditure will grow by 3.9 per cent in 2013, reaching $518 billion by the end of the year.

    ZenithOptimedia has said this forecast for ad expenditure growth this year is down slightly from the 4.1 per cent forecast in December, mainly because 2012 turned out better than we expected, leaving tougher comparatives for 2013. In dollar terms, our forecast for 2013 is marginally ahead of last forecast, by $430 million.

    ZenithOptimedia has included India among the fast-track Asian countries, which also include China, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand and Vietnam

    As has been the case since the start of the economic downturn in 2007, this growth will be led by rising markets, which will grow by 8.2 per cent on average in 2013, while the mature markets grow by just 1.8 per cent, weighed down by the Eurozone crisis. Over the next two years, growth will pick up in both rising and mature markets, reaching 9.4 per cent and 3.5 per cent respectively in 2015.

    Internet advertising is supplying most of the growth in expenditure by medium, driven by technical innovations, such as better measurement of exposure to advertising, greater localisation, and integration with mobile devices. It is forecast that internet advertising will grow by 14.4 per cent in 2013, while traditional media will grow by 1.6 per cent.

    Display is the fastest growing medium within internet advertising, with annual growth of 20 per cent. This is being driven by the rapid rise of online video and social media advertising, each of which is growing at about 30 per cent per year. Continued innovation among the search engines – including richer product information and images within ads – is seeing a healthy rise in paid search. Paid search will grow by 13 per cent a year to 2015. Much of the growth in internet advertising is at the expense of print – internet advertising will increase its share of the ad market from 18 per cent in 2012 to 23.4 per cent in 2015, while newspapers and magazines will continue to shrink at an average of one per cent – two per cent a year. By 2015 online adspend will overtake print.

    Rising markets are outperforming the rest of the world. ZenithOptimedia predicts that rising markets will contribute 63 per cent of growth between 2012 and 2015 and will increase their share of global adspend from 34 per cent to 38 per cent.

    The high growth markets are in Latin America, Fast-track Asia, Eastern Europe and Central Asia, which are well ahead of the rest of the world, with an average of between 10 per cent and 11 per cent growth a year expected between 2012 and 2015. Despite this rapid growth, the US is still the biggest contributor of new ad dollars to the global market. Between 2012 and 2015, and the US is expected to contribute 28 per cent of the $76 billion that will be added to global adspend.

    There will be some change among the top 10 advertising markets between 2012 and 2015. USA, Japan, China and Germany will remain in first to fourth positions, and Australia and South Korea will still stay in eighth and tenth positions, respectively. However, the UK will fall from fifth to sixth position, France for seventh to ninth and Canada will fall out of the top ten altogether. Brazil is set to rise to fifth position and Russia will move from eleventh to seventh.

    The consensus among economic forecasters is that the global economy will gradually build up speed over the next three years. The Eurozone should start to pull out of recession towards the end of this year, which will help stimulate world trade. The global ad market will strengthen in step with the economy, although ad expenditure growth will remain behind GDP growth for the rest of our forecast period. The forecasts for 2014 and 2015 are unchanged at five per cent and 5.6 per cent respectively.

  • “We will focus on compelling sports content, across multiple sports and languages”

    “We will focus on compelling sports content, across multiple sports and languages”

    By the end of 2011, Star had clearly established itself as the premier entertainment network in India and for Indians worldwide, with 400 million people watching our drama and movie channels in seven languages every day. In one of the most competitive markets in the world, we had established substantial leadership in every genre and in most geographies.And while Star and Fox had built an attractive franchise in entertainment, in sports, very unlike our traditional approach, we had tucked the business away in a joint venture with ESPN that was not managed or controlled by us.
     

    Starting in April 2012, this started to change. We acquired the rights to India’s international cricket calendar that month; a few months later, our parent company bought out its partner from the ESPN Star Sports joint venture in Asia with the intent to roll the Indian part of the joint venture into Star; we launched two new domestic leagues in university cricket and hockey; and we renewed the rights to English Premier League football with a substantive bid. All in all, we invested a billion dollars in less than six months.As a result, by the end of 2012, we had established ourselves as India’s leading sports broadcaster.

    So, why did we get aggressive on a business where the traditional wisdom is that no one makes money?

    Many experts mused loudly that Star had found a way to quickly kill a highly profitable franchise built on leadership in entertainment across genres and languages. I still run into these questions every day. Just two days ago, a leading Indian business daily ran a big story wondering why Star had entered a business that usually never makes money. After all, one sports broadcaster had gone bankrupt trying to pay the bills for the Indian cricket rights, another is struggling to break even and yet another is trying to run a sports business without much sports content. Why would Star make such a big, bold move particularly at a time when the overall

     sentiment on the India story has gone cold?

    So, again, why did we do this? Did we lose the plot?

    In order to answer this question, it is important to take a close look at a few facts, some conventional wisdom and many myths that surround the Indian sports business.

    Everyone in this industry knows one thing. India is a single sport country. It is a country where cricket is a religion, where passion for the game is deep and where the country shuts down when the national team is playing.

    And yet, this is only half the truth. Even for a big match where India plays arch rival Pakistan, consumers do not view the entire match, they view only 15 per cent of the match on an average. The reality outside of really big tournaments is even starker. Out of more than 1000 hours that an Indian viewer spent watching television last year, only 20 hours was on cricket, about 2 percent.This is actually less than the time spent on a single successful show on Star Plus!Consumption of domestic cricket is even worse. Although matches are played round the year, only 50 matches are broadcast on television in a year.And very often, the best of the country’s talent do not participate in these games.

    Imagine if soccer crazy England manifested its interest in the game only by watching the FIFA World Cup once in four years and only really paid attention when England played Spain or Italy. That is the equivalent of India’s current state in cricket viewership. In fact, until the Board of Control for Cricket in India introduced the Indian Premier League, there was not even a domestic league, the equivalent of an EPL or an NFL.

    So, India is not a single-sport country, it is at the moment a zero-sport country that occasionally follows 11 Indian cricketers when they play a big marquee tournament.

    For us, though, the more interesting question is why this happened, and what has led to the current state of affairs. We believe that the biggest culprit is the Indian sports broadcaster. Let me explain why.

    A big shift happened in the last twenty years in cricket in the profile of its followership. It moved from being a sport for the urban elite to one that has a mass following across the country.The BCCI deserves credit for this transformation by making substantial investments to improve the quality of stadiums and infrastructure around the country.Today, some of the country’s best cricketers come from outside the large cities; and small towns host international matches on a regular basis. It is also a country where less than 1 per cent of the population has actually watched any sport in a stadium.

    And, yet, sports broadcasters have not made any effort to make their programming more relevant to the new audience.

    In a country where less than 10 per cent of the population understands English, and a much smaller number are native speakers, sports broadcasters programmed only in one language: guess which one? English. This, despite the fact that everyone knew that the big growth in entertainment consumption in the country came when programming on satellite switched to Hindi and other local languages. And even for the very few that actually understand English, it is quite a world they have to navigate to understand the diversity of commentator accents on television: from the Westernised Indian accent to the local Indian accent to the Aussie accent to the Kiwi accent to the Scottish accent to the West Indian accent. It is almost as if the sports broadcasters were not relaying sports, they were running extraordinarily painful accent training programs on television for the very small English speaking audience that came to watch in the first place.

    The pain did not stop there. Around the world, sports graphics is used to bring the game closer to the viewer and to help the viewer understand the game. Yet, in cricket, graphics is more a nuanced tool meant to tickle the sensibilities of the few deep masters of the game, not the 99 per cent of the country that has never even been to a stadium. The same story extends to television commentary too. Rather than being the anchors of the game who explain the game and bring the excitement of the stadium to the viewer’s living room, the cricket commentator is invariably an expert talking to his peers.

    It is no surprise then that the Indian viewer does not spend much time on sports on television.

    But, it would be unfair to put all the blame on just the sports broadcaster. The broadcaster has had many fellow partners-in-crime in ensuring that sports viewership remains miniscule.

    It’s biggest partner has been the cable and satellite platform. Around the world, sports have been a huge driver of revenue and profit for pay television operators. In India every operator complains about the low ARPUs they get from the business. And yet, instead of using compelling sports content to get more money from consumers and reduce churn, the cable and satellite operators make it difficult for their subscribers to discover and develop a habit of consuming sports.

    And this attitude shows up in the distribution of sports channels, which are treated less like the mass product that they should be, and more as premium add-on products for a small, rich, niche audience.

    To make matters worse, these platforms turn off the channel when a marquee event is not on. While this may have made sense in the old, bandwidth-limited analog world where you could only put 20-30 channels, it makes no sense that even DTH operators are employing the same tactic when they have 300 channels to offer. Compare this to other content categories. They do not switch off a news channel when a breaking news event is not on; they do not turn off the movies channel when a blockbuster is not on. But this is exactly what they do in sports. It is the worst kind of behaviour that limits the ability to build habit for the sports fan.

    Even worse is the behaviour of a few platforms that have created their own channels that switch to the most marquee sports events of multiple broadcasters. While they hide under the pretence that they are addressing a consumer need, what they are really doing is illegal piracy. But what is distressing is that they do not understand the long term damage they are doing to the business. Instead of multiplying choices and triggering demand, they are creating a structure that will ensure that viewers only watch a few cricket events.

    Put together, it is therefore not a surprise that the reach of sports channels lags that of even niche channels like Discovery and MTV!

    So in a zero-sport country, sports broadcasters and pay-TV platforms have worked very hard to make sure that it is only the deeply committed, rich expert fan comfortable with English that actually watches a match on television.

    Of course, if the sports broadcaster and the platform have done their part in eroding the value of sports franchise, the regulator and the government have not been far behind.

     
    For the regulator and the government, the overwhelming objective must be to further consumer interest. It is in the interest of consumers to have more and more sports available for them. It is in the interest of any country to have more and more people play sports. And the reality is that people play sports only when they passionately follow games and teams. If India has to break its poor status in international sports and use sports to create a virtuous cycle for the larger society, then the regulator and the polityhave a powerful role to play.

    I am reminded of an incident that happened in Canada last year. When the hockey union went on strike, the prime minister of the country got involved because his fear was that a prolonged strike would have an adverse impact on the GDP of Canada! More than anything, it showed the power of sports and its ability to be a huge economic growth engine. It also shows the lens with which politicians and executives approach sports globally.

    However, the regulator, the bureaucracy and the political class have not shown such an enlightened approach to sports in India.

    Of all things, the regulator has imposed a cap on prices. A price cap is never good for the long term health of a business but it is especially absurd in the context of sports, where the market we operate in is truly global, where the acquisition costs for rights reflects a global market.

     What is even more absurd is that a news channel, a general entertainment channel, an education channel and a sports channel are all capped at the same level, without any linkage to the underlying cost of content or the relevance of its shelf life. Shockingly, Star Sports which has the most compelling portfolio of content in the country can charge no more than the country’s weakest sports channel with practically no sports on it.

    To make matters worse, the government has mandated that the most expensive sports events are events of national importance that need to be made available to the public broadcaster – who in turn not only retransmits an unencrypted signal to all its subscribers for free, but also makes it available to private platforms to carry the content under a statutorily mandated ‘must carry’ law. So even as you are making no effort to ensure wider coverage for all sports for the long term, you are killing the economics of the sports broadcaster by forcing it to share the most popular content today without adequate compensationand also legitimizing piracy by permitting access to sports content by platforms for free.

    The entire eco system has therefore unwittingly conspired to ensure that sports broadcast is unprofitable, sports consumption is limited and sports followership is minimal.

    So, the question comes back to: if things are looking so bad, why did Star decide to make a big push into sports?

    For only one reason.The current state of affairs is just not right, is not sustainable and is not good for anyone. Somebody needs to change this unhealthy equilibrium which is hurtingthe country, the consumer and the media industry.

    And as the country’s media leader, and as a company that has faced such hurdles before and still managed to build an outstanding franchise, we believe that we can shape this change.

    Clearly, change will not happen overnight. It will require a lot of effort to break the status quo. We will have to ensure that we create compelling sports content, across multiple sports, across multiple languages, with an economic structure that will add value for all.

    But, we are patient, as we always have been in India. And our history, our parentage and the coherence of our approach gives us confidence that we will build India’s first successful and profitable sports franchise.

  • Expanding teledensity and broadband services major challenges: PM

    Expanding teledensity and broadband services major challenges: PM

    NEW DELHI: Prime Minister Manmohan Singh today flagged off three major challenges for the industry and the Government to take the Telecom revolution to the next level: deepening penetration of basic telecom services, providing affordable and accessible broadband services, and strengthening domestic manufacturing capabilities across the entire value chain in telecom and electronics.

    Addressing the Seventh edition of India Telecom under the theme ‘New Policy Framework: Envisioning the Next Telecom Revolution‘, Dr. Singh said: “The Indian telecom sector has seen phenomenal growth over the past decade or so. With around 965 million telephone connections, India is the second largest telecom market in the world as a whole. The telecom sector has also been the driver of foreign direct investment and FII flows into our country. It has contributed in a major way to the dynamism of our economy.”

    The three-day ‘India Telecom‘ is organised by FICCI in association with the Department of Telecommunications, Communications and Information Technology Ministry. This is the biggest telecom event in the Indian subcontinent and has been the forum for emerging knowledge center, inspiring innovation, technology transfer, exchange of innovative ideas and joint ventures in telecom sector since 2006.

    The Prime Minister said during the last one year, the government had taken a number of initiatives in the telecom sector. “We have announced the New Telecom Policy-2012. We have attempted to clarify the policy positions on a number of complex issues. We have attempted to ensure adequate availability of spectrum and its allocation in a transparent manner through market-related processes. I am confident that the futuristic policy regime that we are now putting in place will address, and address effectively, the concerns that have been worrying investors and will provide a new impetus to the growth of telecommunication industry in our country,” remarked Dr. Singh.

    He listed three broad aspects which should guide the collective efforts in telecommunications in the years to come.

    The first issue is the penetration of basic telecom services in our rural economy. The exponential growth of the telecom sector has been primarily driven by growth in the use of telephones in urban areas. The full potential of telecommunications in enabling higher growth will not be realised until the use of telephones spreads much wider in the rural economy of India as well. While urban India has today reached a teledensity of 169 per cent, the teledensity in rural India stands at only 41 per cent. Not only this, the bulk of the 59 per cent people who do not use phones in rural areas is perhaps from the socially and economically backward sections of our society.

    He added, “We must address this rural-urban divide if we have to achieve our goal of socially inclusive growth. Today, network coverage is there in most parts of our country and the bulk of the population is already covered. It is possible that there are economic or other barriers preventing the spread of telephone usage. There is also an economic case for investing in business at the bottom of the pyramid. I urge industry, which has shown great innovation in the telecom sector, to come up with strategies to expand teledensity in rural areas. I also urge the Department of Telecommunications to think big and think creatively to see how the resources available to it, either through the USO Fund or otherwise, are better used to achieve this purpose. We cannot and we should not have an India where lack of a phone is a hindrance to inclusive growth. The New Telecom Policy-2012 envisages 70 per cent rural penetration by 2017 and 100 per cent by 2020. We should all work together to achieve these targets and in fact do better than what we have promised.”

    On the issue of availability of broadband services,Singh said broadband improves the lives of people by providing affordable access to information and knowledge. Many Information and Communication Technology applications such as e-commerce, e-banking, e-governance, e-education and telemedicine require high speed Internet connectivity. Studies show that there is a direct correlation between an increase in broadband connectivity and growth in a country‘s GDP.

    “The advent of smart phones and tablets at reasonable prices along with wide availability of telecom infrastructure across our country would provide an opportunity for us to ensure an equitable spread of broadband services. We must, therefore, seize this opportunity. Recognizing the significance of broadband connectivity as a tool for empowering our rural masses, our government has launched the National Optical Fibre Network project to provide broadband connectivity to all our Panchayats. This unique project will usher a new era in telecommunications by establishing information highways across the whole length and breadth of our country, particularly in rural areas,” said Singh. In this context, he urged all government departments and the private sector to work creatively to ensure that this infrastructure is efficiently used to make broadband services truly affordable and accessible.

    “I would also like to reflect on the thinning down of our domestic manufacturing capabilities in telecom in particular and in electronics in general over the past two decades. We need to strengthen our domestic manufacturing capabilities across the entire value chain in telecom and electronics. The new Telecom and Electronics Policies lay down the regime for enabling this to happen. Now it is for the captains of our industry, particularly in the private sector that they have to seize this unique initiative. As a major automobile buying country, we have developed a strong automotive sector. I believe this can be and must be replicated in telecom and electronics as well. We need leaders in telecom and electronics manufacturing who can break new ground and create the ecosystems to enable India to be a major producer of hardware,” stated Dr. Singh.

    Telecom Minister Kapil Sibal announced that nationwide Mobile Number Portability (MNP) is expected to be rolled out by February next year, which will allow users to retain their numbers even if they move from one state to another.

    Sibal said, “For the timely implementation of the National Telecom Policy (NTP) 2012, the Department of Telecom has finalised broad agenda for next three months from December 2012 to February 2013.”

    Some of the key initiatives to be completed by February 2013 mentioned by him were approval of spectrum assignment and pricing, unified licensing regime, M&A guidelines, finalisation of guidelines for spectrum sharing, creation of fund for R&D and manufacturing and MNP on a nationwide basis.

    Minister of State for Telecom Milind Deora pointed out that the telecom sector is at a nascent stage and technologies and policies are still evolving. “We need to create a data ecosystem and all Indians must have access to voice services, high-speed internet connection at affordable prices and New Telecom Policy 2012 aims to achieve this target by 2020. Also, unified license which is approved by the Cabinet will further help in penetrating rural India,” Deora explained.

    FICCI President R V Kanoria said the New Telecom Policy 2012 will provide a platform for socially inclusive growth of the telecom sector. “It will help in formulating the next step to sustain this growth and ensure affordable telephony, impact the services, delivery and will empower rural India,” he added.

  • ‘For strong ROI in India’s TV biz, price controls must go’ : Fox International Channels president & CEO Hernan Lopez

    ‘For strong ROI in India’s TV biz, price controls must go’ : Fox International Channels president & CEO Hernan Lopez

    Price controls are limiting the revenue growth for broadcasters in India as they earn net income of $700 million from subscription after paying out carriage fees of $400 million. Investments in programming are muted and, as a result, India is not able to export television formats and finished content while software, music and animation is travelling overseas.

     

    In an interview with Indiantelevision.com‘s Ashwin Pinto, Fox International channels president, CEO Hernan Lopex says price controls have to go if the industry is to see strong ROI. He also talks about the company‘s growth plans worldwide.

     

    Excerpts:

    Q. Do you see India‘s television broadcasting industry growing at the right pace?
    Broadcasters in India earn net income of $700 million from subscription after paying out carriage fees of $400 million. This is holding back investments in programming. India, as a result, is not able to export television formats and finished content while software, music and animation is travelling overseas. If the industry is to see strong ROI which would encourage greater investments in programming, then price controls must go.

    Q. What you are suggesting is that pay-revenues should scale up. What is the ideal revenue mix between subscription and advertising revenues?
    It should be in equal ratio, which is what it is in the US. But in India it is heavily skewed towards advertising. Broadcasters generate $2.6 billion a year in advertising. Subscription income is dismally low in comparison.

     

    Relative to the size of the Indian economy as measured by GDP, this is only 0.04 per cent, and this ratio keeps declining. By contrast, in Colombia, a country with 1/25th of the population, broadcasters get over $200 million in subscriber fees. That is equivalent to 0.07 per cent of the GDP in Colombia, and that ratio keeps rising – partially due to the efforts that Colombia is doing to fight content theft and subscriber under-declaration.

    Q. So India should learn from Colombia and allow its content industry to flourish?
    Price controls lead to creative shackles. At Fox we buy formats and content from different markets, but India is not there. This is surely not due to lack of talent, ambition and vision.

     

    In Colombia a TV episode costs $150,000 compared to India where an episode costs around $20,000. The turnaround there was the emphasis on creating a dual revenue stream. New channels were launched for underserved audiences. Consumers also wanted content in Spanish and Portugese.

     

    That is because Colombia has a strong system of TV production, has great writers, animators, actors and the country also fights strongly against piracy. In India under declaration, along with controls, means that the broadcasters are getting squeezed.

     

    Q. But ARPUs (average revenue per subscriber) are low in India. How do you make consumers pay more for quality content?
    When consumers see that spending more money results in better content, then they will be happy to pay more. In some markets, initially consumers thought that cable and satellite services were not worth paying for. But as more options were added, they realised that they were getting value. I am looking forward to a time when my children, when searching for content, find choices that come out of India. I am keen on buying Indian formats that can be shown elsewhere.
    ‘We have seen double-digit growth year-on-year. We run a profitable business in India that is based on strong fundamentals with dual revenue streams of affiliate and advertising‘

    Q. So you are not happy with FIC‘s growth in India?
    We have seen double-digit growth year-on-year. We run a profitable business that is based on strong fundamentals with dual revenue streams of affiliate and advertising, which are both showing a steady upward trend. Currently, we have six of our channels in the Documentary and Lifestyle space in India.

    Q. As a market how is India different from the rest of Asia in terms of challenges and opportunities?
    We run our channels in over 100 countries around the globe. While there are big similarities across markets, each has some of its own peculiarities and challenges. I think that the challenge of scarce bandwidth for channels coupled with price control and carriage fees put a limit on the revenue potential. However, India is a land of huge opportunity and with mandatory digitisation in the Metros slated to kick off in 2012, we believe that a very bright future is ahead.

    Q. With digitisation set to take off in India, do you see the carriage fee structure being rationalised based on the experience in other markets or will disputes happen with big operators like what happened in the US with Comcast?
    We believe that digitisation will help all the stakeholders in the business to realise the true value – Last Mile Operators, MSOs and broadcasters.

     

    There will be teething issues like in any new technology, but market forces will aid the stakeholders in arriving at an understanding.

    Q. News Corp restructured the Fox Networks Group last year. What was the aim and how did this impact Fox International Channels?
    The goal was to foster stronger cooperation between various units. As a result, Fox International Channels has strengthened its ties with the US networks in entertainment, factual and sports.

    Q. Aren‘t you looking at doubling operating profit and reaching $1 billion by 2015? 
    The gameplan is very simple: to continue to deliver to platforms, advertisers and viewers a portfolio of must-have brands.

     

    This is what we call “brands with fans” – and get a fair share of wallet for it. In order to do that, we are investing more in content (both global and local), marketing and our teams.

    Q. How much revenue does Fox International Channels contribute to News Corp’s TV business and what growth has been experienced year on year?
    In FY‘11, we made a little over $1.5 billion in revenues and we‘re growing at double-digit rates.

    Q. How do you split up the global market into regions and which are your three biggest markets globally?
    We run Latin America and US Hispanic; Italy and Germany; the rest of Europe and Africa; and the Asia/Pacific/Middle East. We don‘t disclose the ranking at the country level.

    Q. Globally what is the split between subscription and ad sales and which area do you see growing faster?
    About two-third of our revenues come from subscription, with the balance coming from advertising, syndication, and other fees. We strive to make all revenue sources grow at the same rate.

    Q. Pay TV you have said is turning from a “nice to have” to “must have” service. How is this changing the dynamics of your business?
    Whereas in the past we programmed primarily shows produced in the US, we are now broadening the scope of our lineup. The aim is to include more local shows, as well as different genres.

    Q. What challenges is the current economic slowdown posing?
    In a handful of cycles we‘ve seen ad revenues decline, but overall our profits continue to increase.

    Q. Has Fox International Channels done recent research to find out what consumers globally want and how they view your brands?
    We are indeed finalising a brand audit in 10 countries as we speak.

    Q. Digitisation globally is allowing FIC to have more specialised offerings in genres like Crime. How has their offtake been?
    Very positive! Fox Crime, for instance, is the number one channel in Italy, surpassing even Fox.

    Q. Are there any genres that are currently underserved globally? If so, how do you plan to service them?
    Our portfolio globally includes entertainment, sports, factual and lifestyle – we‘re quite content with it.

    Q. What role does sports play in your portfolio as it is a challenge to control costs given the intense competition for rights?
    Sports is the ultimate must-have content. But because of it, there is intense competition for rights.

     

    We simply must be disciplined in our approach, but we have the benefit of a wide portfolio of channels – includingentertainment channels – that can both contribute to and benefit from having sports in the portfolio.

    Q. Globally, how has FIC expanded?
    These are exciting times! We now have 1.1 billion cumulative subscribers, and have a presence in 57 offices. I have been to 40 of them.

     

    We have added Fox Sports to our portfolio in Latin America, and continue to increase ratings at the National Geographic Channels. And yet there is still so much more to be done.

    Q. How difficult is China due to government regulation?
    We have a small but profitable business in China.

    Q. New media is growing globally. Are you launching channels for the mobile and Internet?
    We are launching mobile extensions of our TV brands, like the Fox Movies Premium Player in Asia.

    Q. How is Fox International Channels leveraging high definition?
    My goal is to launch nearly every TV channel from now on simultaneously on HD and SD.
  • ‘Scaling up through film acquisitions is a risky model’ : Mahesh Ramanathan- Big Pictures COO

    ‘Scaling up through film acquisitions is a risky model’ : Mahesh Ramanathan- Big Pictures COO

    Rock On! was only the beginning. After going on to create a new set of cult audience with their first co-production, Reliance ADAG's Big Pictures is bullish on its 18-movie slate for 2009.

    On the distribution front, Big Pictures rode on the success of Ghajini at the fag end of 2008 to get a slice of the overseas business with Rs 390 million. The challenge this year is to step up the film production and distribution business.

    In an interview with Indiantelevision.com's Anindita Sarkar & Gaurav Laghate, Big Pictures COO Mahesh Ramanathan talks about the company’s production plans and the revenue scope that the film business offers as different studios scale up.

    Excerpts:

    Big Pictures had made a grandiose announcement of producing 18 movies in 2009. But with the economy slowing down, is there a revised plan?
    With the Indian film industry growing at a CAGR of 17 per cent, which is almost double the GDP growth rate, box office definitely remains unaffected. Though there is a slowdown in the economy, that definitely does not lead to any de-growth in demand. If the content remains right, there can't be any downturn in consumer sentiments when it comes to movies.

    Having the financial muscle of Reliance ADAG, why has Big Pictures gone in for six Bollywood co-productions out of this roster of 18?
    Co-production deals for us actually bring in a perfect marriage between creativity and commercial acumen. While we bring in certain virtues like financing, marketing, promotion and distribution of content through our various platforms (online, home video, mobile, DTH), the director still calls the shots. However, he has to align his creativity with us to bring in the viability for the product for commercial exploitation.

    You will also be producing seven regional films this year. What kind of potential do you see in the regional film space?
    The regional film space currently accounts for 50 per cent of the Indian film market and is growing. While there is a huge appetite for Bengali films, the Southern region is definitely a huge market to tap. Marathi film industry is also revamping. So the potential to commercially exploit these markets remains huge.

    Any plans of entering the Bhojpuri market?
    We don't plan to step into the Bhojpuri market as of now as there are huge distribution challenges.

    Recently, we have seen a lot of small and mid budget films raking in good numbers at the box office which also includes your first Hindi production Rock On. Do you plan to create more small budget movies?
    Our business model is not based on budgets. While we do have a few low budget films like Sikander and Chaloo lined up for 2009, we will begin the year with our big budget Luck By Chance. Budget is purely a derived figure based on the demands of the script. Our approach is more towards building a portfolio across a variety of genres that include small, medium and mid-budget movies.
    'Our business model is not based on budgets. Our approach is more towards building a portfolio across a variety of genres that include small, medium and mid-budget movies'
     

    Year 2008 was a year of film acquisitions for some major studios. Why did you decide to stay away from it?
    Scaling up through film acquisitions remains a very risky model. When you are acquiring a film, there is a lot of producer profit that is built in which jacks up the price. Our business model focuses on creating original content. Not only can you keep your costs low but also ensure that the viability of the film remains secured.

    If you are into acquiring of films, you are entitled to exploit the product only for a stipulated time period. This is not the same case with content creation. Original content helps you build your own catalogue and once the catalogue is built you can use it to create more revenue streams.

    What role does marketing and promotion play in increasing a film's occupancy in theatres and multiplexes?
    Huge! Take Ghajini for example. The pre-release marketing and promotional activities for the film induced extreme interests amongst audiences and as a result Ghajini witnessed almost 100 per cent occupancy in its first week at theatres. The marketing activities that we did across 40 territories overseas also helped us generate a lot of eyeballs. So marketing is definitely very important to tap the right audiences.

    How difficult is it to tap the right set of audiences?
    Because of media fragmentation, it is becoming very difficult to reach the right set of audiences and engage them. Today, you cannot pin your hopes onto only the press and television. You have to have a 360 degree approach and mass customise your communication to audiences – and this is where we score. We have a presence across almost all media and entertainment platforms – be it radio, home video, online, mobile, social network etc. Thus, synergising all these platforms helps market and promote our films in a much focused way. It is also very cost effective.

    How do you strategise your film marketing activities in the international space?
    Unlike India, it is more of micro-marketing in the overseas market where you target the diaspora. Hence, the choice of media vehicles is more local there. You have to be aware of the local newspapers and have to have a local expertise and channelise them smartly.

    Though in terms of value the Indian film industry is only 2 per cent of the entire global box office, it is generating interests across international studios. Why?
    When it comes to the number of films produced in a year, we are definitely the largest in the world. India produces over 1000 films a year. We are also the largest box office in the world with 3.5 billion admissions a year. While Hindi films account for approximately Rs 50 billion, a similar amount is generated from regional movies. So it's definitely an attractive market for international studios that have long term plans in this country.

    When it comes to value, our box office stands at only 2 per cent of the global box office. But that is because our collections are still dependent a lot on single screens where ticket rates are really low. However, with the establishment of 3700-3800 multiplex screens in the next five years, we will see a lot of value being added to the box office.

    How much of the revenue generation potential of a film is inflicted by piracy?
    Between theatrical, home video and cable, it is estimated that the overall piracy eats away almost 80 per cent of the film's entire revenue potential.
  • ‘Media and entertainment sector has lost a whopping Rs 640 billion of market value since last year’ : Sadanand Shetty – Kotak Securities vice president

    ‘Media and entertainment sector has lost a whopping Rs 640 billion of market value since last year’ : Sadanand Shetty – Kotak Securities vice president

    Media and entertainment companies have been riding the market boom to expand and fund their diversified ventures. But the tide has turned against them and they are faced with a scarce capital situation.

    Being in the equitties market for over 14 years, Kotak Securities vice president Sadanand Shetty knows best how rough the path is going to be for media companies to tide over the slowdown phase. Managing money on behalf of investors, he is one of the few fund managers to have caught early the trends across verticals within the media and entertainment sector.

    In an interview with Sibabrata Das, Shetty talks candidly about the massive erosion of values media companies have seen over the last one year and how grim the real world is for most of them.

    Excerpts:

    Aren’t these companies seeing a massive skid in valuations?
    The media and entertainment sector has lost a whopping Rs 640 billion of market value since last year due to the global economic meltdown. There is a massive collateral damage to the wealth of media owners. Valuation corrections for most of these companies are far greater than the broad market.

    Most media companies fall under mid cap and small cap categories. These categories have lost much more in stock value than the large cap companies. September ’08 has been the worst quarter in recent times for most media companies that are part of the broad-based BSE 500 Indices. The profits of aggregate listed companies are down by 60 per cent for the said quarter, including losses of new Hindi GECs (general entertainment channels). Slowdown in revenue and rising costs have hit earnings.

    The market has not even spared large companies like Zee Entertainment Enterprises Ltd and Sun TV Network Ltd; they together have lost market value of close to around Rs 160 billion (as of 10 January 2009 over the year ago period). The broadcasting space has alone lost market value of nearly Rs 280 billion. Economic slowdown in general has impacted the advertising revenues of the sector. Subscription revenues, to some extend, provide the much needed cushion to falling profitability of the broadcasting companies.

    Why were media valuations so unrealistic?
    Being emerging businesses, the Indian media and entertainment companies commanded higher valuations. Most media companies have demonstrated robust sales, expanding margins and rapid growth in profits in recent times. The stock market rewards high growth with high valuations. A favourable equity market has also helped companies to raise large funds and command these valuations.

    Weren’t companies stretching themselves too thin in a market hype situation?
    Still, I wouldn’t call these moves as mistakes. Expansions were planned in a growth environment, which now, though, is hitting the speed breakers. But certainly in some cases large capacities have been created ahead of demand curve and investors are suffering in those ventures.

    The industry also witnessed entry of new players with other objectives. For some it was pure market capitalisation as easy money poured into the sector. Investors – foreign and local – have jumped the gun and funded some of the unviable projects. Shortsighted foray into ‘new media’ business verticals that some companies have ventured into will be hard hit.

    What are the lessons to be learnt from this?
    This is the first true slowdown that the industry is witnessing today. It would be interesting to see how managements of the media companies respond to the situation. In general, business plans built on easy liquidity do not sustain for long. Vision, commitment and excellent execution do. Media, like any other services business, is people driven. Backing the right talent with appropriate incentives will yield large gains.

    ‘Economic slowdown will force companies to focus on few verticals. They will have to maintain their market share without burning too much cash‘

    Have media companies become dependent on foreign capital?
    Global media companies except perhaps News Corp. were late to react to opportunities in India. But today almost all the top studios of the world have their presence in India across different media verticals. Favourable economic growth and rapid rise of domestic companies have compelled the global media giants to look at India. For some of these companies, Indian operations have started contributing majorly to their profits in the Asian region.

    We are also witnessing rapid rise in FDI (foreign direct investments) and portfolio investments in media companies. You, after all, can’t ignore the second fastest growing economy of the world. India is also in a sweet spot today because of its huge youth population.

    What are the challenges the Indian media companies face due to slowdown?
    Slowing ad spend, increase in operating costs (specially distribution), and tight liquidity will impact the industry in the medium term. The sector will also have to grapple with excess inventories that have been created in the last few years. Most importantly, economic slowdown will force companies to rethink on their expansion plans and focus on few verticals. Companies will have to maintain their market share without burning too much cash in the process.
    The process of consolidation will also accelerate. I expect incumbents with sound financials to take advantage of the current dismal valuations to further their business interests. Venture capital and private equity participation can’t also be ruled out. We have already seen certain GECs feel the heat. Consolidation in regional markets is also happening and expansion plans have been put on hold in some cases.

    Overall, the economic slowdown will impact the growth plans of most of the companies. Priorities have shifted to consolidating the existing businesses; expansion can wait.

    It is testing time for media companies. There will be no better time to demonstrate the strength of their respective market/channel shares as we expect ad spend to consolidate towards the top.
    ‘TV content companies have suffered for long due to their fractured business model. Lack of revenue visibility and pricing power have impacted them. There is also lack of long term relationship between content and broadcasting companies‘

    Will news channels have a free fall as they operate in a highly cluttered environment?
    News channels in India have grown significantly over the last few years. But for most companies, it has not significantly added to their profitability due to high operating costs (including distribution). Lack of robust subscription revenues have also impacted the bottom lines of many of these companies. Noise value has gone up due to entry of players with other objectives. We have witnessed the entry of so many non-serious players in the market that I think most of them will fold up in the next two years.

    Only few news channels with strong brand equity and distribution network would be able to make reasonable profits. Companies with strong balance sheets will survive. Rest all will fade away.

    What do you think of the television content companies?
    TV content companies have suffered for long due to their fractured business model. Lack of revenue visibility and pricing power have impacted them. There is also lack of long term relationship between content and broadcasting (who own the IPR) companies. The benefit of new distribution platforms has not reached most of these companies.

    Unless there is substantial change in the current business model, I do not see real scalability coming to companies. TV content companies also suffer from fragmentation. Having said that, this year has been particularly good for content companies as some of the dominant incumbent players have witnessed loss of market. New players have emerged and done well. I expect few credible players to emerge in the future.

    Do you find the cable industry attractive?
    Institutional investors have shown interest in the sector in recent times. Investments have flown into the large incumbents and fledging entrepreneurial-led companies. Investors are betting on eventual consolidation and digitalization of last mile to unlock huge value in the sector. Investors seem to be willing to wait for the interim painful process to unlock long term value. We expect increased investments will go into infrastructure creation and customer acquisition.
  • Government committed to bridging digital divide: President

    Government committed to bridging digital divide: President

    NEW DELHI: Appreciating the need for empowering the citizen with modern information technology, President APJ Abdul Kalam today announced that the year 2007 will be the ‘Year of Broadband’ as the government was committed to bridging the digital divide by providing broadband coverage throughout the country.

    In his address to the joint sitting of both Houses of Parliament on the opening day of the Budget session, Dr Kalam said, “Our Information Technology sector continues to develop and remain globally competitive,” adding that, “My government will take forward the National Identity Card Project under the National e-Governance Plan for nationwide roll-out in a phased manner so as to ensure better delivery of services to our citizens.”

    He said the government was encouraging the growth of the electronic hardware industry and the semiconductor industry.

    He also said the Right to Information Act was one means of empowering citizens, adding that it had often been said that eternal vigilance is the price of democracy.

    The President said a Vision for the development of an empowered S&T base by 2015 had been prepared. Steps will be taken to attract talent, rejuvenate university research, enable women scientists to re-enter careers in science, strengthen technology business incubation processes, promote excellence in research, engage private sector in R&D and create greater science awareness and a scientific temper among the people. The financial allocation for science and technology will be increased from less than 1% of GDP to 2% of GDP.

    He said that to sustain the efforts in the advanced fields of modern science and technology, there was need to increase the number of scientists and improve the quality of Indian science. The Government was deeply concerned about the inadequate enrolment of students in basic sciences and said Indian science is lagging behind other newly industrializing economies. India needs a new thrust in the field of science and technology.

    The National Knowledge Commission had submitted its first report placing emphasis on the need to invest in education at all levels of the knowledge pyramid. Several new Indian Institutes of Science Education and Research, Indian Institutes of Technology and Indian Institutes of Information Technology were proposed to be set up in various parts of the country.
     

  • NBC Universal’s Wright calls for greater cooperation between govts for piracy fight

    NBC Universal’s Wright calls for greater cooperation between govts for piracy fight

    MUMBAI: NBC Universal chairman and CEO Bob Wright has called for governments and businesses to join forces in a rigorous alliance to combat piracy and counterfeiting.

    At the Third Global Congress on Combating Counterfeiting and Piracy, organised by the World Intellectual Property Organisation, he appealed to broadband providers, Internet auction sites, financial intermediaries and shipping companies to act more promptly in controlling the flow of illegal downloads and trading on their watch.

    His speech was called “Hear No Evil No Longer”. He urged business leaders to put the issue of dealing with piracy at the top of their agendas. “The days of ‘hear no evil, see no evil’ must come to an end. The scale of the epidemic leaves no choice. Legitimate businesses have to step forward and declare that they will not profit on the back of IP theft. And if they don’t step forward, governments need to adopt laws to require cooperation.”

    He noted that the technology-based, information-based society of tomorrow depends on innovation, invention, and creativity. These are the drivers of growth and progress. He warned that if they are not protected, tomorrow’s world will suffer greatly.

    “And from where I sit, we are losing ground in this battle. Much more urgent and concerted action must be taken if we are to turn back a rising global surge of counterfeiting and pirating, which threatens not just to dampen but to seriously threaten the fire of innovation and invention that creates economic growth.”

    He noted that one challenge involves raising the profile of the vast extent of intellectual property theft — and explaining and quantifying the threat to it. He stressed the need for action that goes beyond just modest measures.

    Piracy results in a ripple effect that magnifies the losses suffered by any individual sector of the economy. For every dollar a nation’s industry loses to counterfeiting and piracy, that nation will lose at least three dollars of GDP.

    When a movie studio loses revenues to piracy, it doesn’t have that money to reinvest into making more movies and television. Not only does this affect the individual studio but it also impacts all the companies that would have contributed to or benefited from these unmade productions. It reduces the revenue of the upstream suppliers to movie producers, and of the downstream industries, like movie theaters, DVD retailers, and video rentals.

    He went on to note that counterfeiting and piracy depends on legitimate businesses for distribution and resale. It is these businesses that must be enlisted in order to reduce trade in counterfeit and pirated product.

  • ‘Channels building bouquets to provide the advertiser discounts is an unfortunate and shortsighted perception’ : Sunil Lulla – Times Now CEO

    ‘Channels building bouquets to provide the advertiser discounts is an unfortunate and shortsighted perception’ : Sunil Lulla – Times Now CEO

    Times Now CEO, Sunil Lulla has been associated with the business of television over the last two decades. His strength lies in building brands from scratch. And the channel is going to need all that experience as it continues to find its feet. 30 January would mark the completion of one year for Times Now but the man at the helm knows that he still has a long way to go.

    Indiantelevision.com’s Sujatha Shreedharan caught up with Lulla to discuss the channel’s performance over the past year and how it hopes to take on the competition in what is turning out to be the most fiercely competitive space on television.

    Excerpts:

    What’s the big picture in the news broadcast industry as you see it?
    While news channels are trying new formats, there are certain restrictions as an English news channel that we have to contend with. Our audience is niche, the kind of formats they have adapted to so far dictate our content too. We need to break out of that mould.

    That said, is there space for a focused or niche channel? Yes of course there is. While weather does not play such an important part in our news unlike the US – there is a space for a specialized Weather news channel or Sports news channel. But as of now we are confined to the (general) news space and this is where we will bat it out. There was a time when we had five channels gunning for about 80 per cent viewership. Today we have over 30 channels looking at the same viewership. There is audience fragmentation but that has also meant a certain rating system and therefore a certain level of accountability. Look at our ad to GDP ratio. It is perhaps better only than a Bangladesh.

    As the market grows, the consumer will have more choice. This proliferation is necessary as it will grow the ad curve. One of the more underleveraged areas in my knowledge is India’s ability to produce content for international markets. We need to take our content and license it to other players.

    The last year seems to have been as much about sorting out what exactly is the personality of the channel as anything else. Have you arrived at clarity on this?
    We were always clear that we were and are a general news channel and as such our competition is also in the general news space. When we started out NDTV was the only dominant player and our natural competition in this space. The launch of CNN IBN was a surprising entry. This meant that there was a huge amount of viewership traction.

    So in terms of competition you would name NDTV 24×7
    I have no problems naming NDTV 24×7 as our competitor. I think NDTV 24×7 being the first English news channel in India and the vast experience it has behind it will remain a competition and a benchmark for all the following channels.

    But you were also competing with the English business news channels in the 8 to 4 band?
    Yes, we do have a business band that we took a re look at and decided to restructure it. We have now made our business band slimmer. The restructuring of the business band happened around 16 July and I think we’ve bounced back pretty fast.

    Our focus is on the ‘Big story’. This is what has worked for us. So if that big story is Abhishek and Aishwarya, then we’ll cover that. If it is Sourav Ganguly and cricket then we will track that.

    What improvisation is being made on the content side to build up a loyal audience?
    On the cusp of our one year completion, we can only plan things for ahead. But using this as an anchor point, we will have announcements and changes to make on the content front. We are in the process of launching an entertainment based show to air during prime time weekend. We are already experimenting with different formats. We have our sports show ‘The Game’ repackaged and presented in a fresh format especially focusing on the World Cup.

    We will start the new entertainment based show in February while March and April will see us beefing up and fine tuning the weekend programming. Prime time for the weekend would be a combination of news and programming. Wraparounds are the way forward.

    Times Now will also launch its campaign coinciding with its completion of one year on 31 January called ‘One year: In tune with what’s next’. It will be launched as both a print and television campaign.

    Speaking of content, due to cut throat competition, news channels are increasingly resorting to sensationalizing what they broadcast and even becoming quite sordid. This is only giving a greater handle for regulation to come into the sector which is hardly what anyone wants. Isn’t this a cause for concern for all news broadcasters?
    Within the breaking news format, it has always been the combination of activism, regulation and media that has pushed up the immediacy of news. So whether it is Bollywood or cricket – both of which have shown pretty dismal performances – is always covered by the Indian media. I think where the idea of sensationalizing news needs to be questioned is by the news network itself. That is a matter or an individual call of what one must not do. There is a certain sense of values the news network follows or maturity it shows in handling issues.

    Then there is regulation. Sure it’s a concern when it becomes interfering but the regulation is simple, lucid, clear to understand and detailed. We live in what is called the ‘google world’; we have information at the tip of our fingertips. So to shy away from news, whatever the content would not be fair. How we approach it is another issue.

    Now that Times Now has settled down, what’s the strategy to take it forward and drive up ad sales?
    There are a few things which come together to create ad sales – performance in a genre in which you are perceived to be a habit, traction in terms of ads, to hold prices and take them up, offer properties which will attract the advertiser. For instance, we will have a budget special coming up soon. But by the first week of January we had already sold that. Similarly we have the ET Awards. The idea is to ROS advertiser for which you are a reach vehicle. We need a pipeline that’s full but at a healthy price. We need to identify tent pole properties which will rope in the advertisers. Obviously we accept that NDTV has more advertisers than us.

    What do you think is the number of channels that are practically sustainable in each genre of news?
    Just last week, as I was talking to someone, the whole discussion about the number of channels in India came up. There was this realization that we are about 300 channels short. Within the next three years, there will be about 250 million homes with television out of which about 71 million homes have cable and satellite while about 30 million of these are what we know as urban homes. And these are only homes that are reported. The number increases as more and more black and white television sets are replaced by colour television. So we are talking here of a paucity and not an overcrowded situation.

    One unique aspect of the news channel business is that buyouts are the exception. The only one that comes to mind is Channel 7 in the recent past. Is that about to change soon? And if and when Times Now does view the regional market how would you go about it? Would you look at acquisitions or developing your own channel?

    You are right when you say that buy outs and acquisitions are new to the Indian news space. But if you are talking growth then we believe in both organic and inorganic growth. We have no phobia to either approach. But the reason for such growth should be stronger and better shareholder value.

    I personally think channels building bouquets to provide the advertiser discounts is an unfortunate and shortsighted perception. The priority should always be the value. I would rather have one channel at a good quality pricing than have 10 channels.

    That said, I think Zee has done a better job at being a bouquet. I wouldn’t count the regional channels because they are almost stand alone channels in that region. Star Plus and Star One again leave their other channels far behind.

    This is not the kind of orientation we have at Times Now.
    ‘Turning pay may have hurt us as a business’

    As management head of Times Now, what’s your priority — toplines or would you rather watch the bottomline?
    What is important is to generate quality content, build relative rank and close the distance between us and our competitor. We understand it’s not about a short term game. The more often we manage to satisfy our consumer or advertiser, revenue growth will increase accordingly. Right now the priority is to get the content mix right and secondly to get the channel across. This does mean investing in distribution.

    What sort of investment has gone into Times Now up until now?
    Blood, sweat, grime and lots of hard work and planning …. (Refuses to state numbers)

    Has the channel reached breakeven yet?
    Honestly, it won’t happen so soon. It will take at least 4-7 years.

    News channels no longer run on televised content alone. It has to have value add like online, mobile or on ground properties. What are the other revenue streams being tapped by Times Now? What is the overall percentage of revenue likely to come from these subsets?
    There is a need to develop our web property and that will be our focus in 2007. The web strategy was not focused because there was a need for monetizing opportunity. At that point, TV was a more important monetization opportunity so concentrated on getting that right.
    Now we will focus on building a stronger web connect for our advertiser and viewer.

    As for mobile properties we were the first to tie up with a telecom company, Reliance Infocomm and are in talks with Idea as well. The format will be similar with streaming feed and select videos. But if you ask me what the revenue we accrue from them is, well it is very marginal. The telecom operator keeps the majority chunk. If this needs to be explored as a prospective revenue stream, we will have to work out better partnerships.

    All indications are CAS will be spreading to cover the metros fully and later at least the Tier 1 cities. In such a scenario isn’t it better to stay in the pay tier rather than take the short term (some would say short-sighted) approach of going FTA?
    First of all, if you read the fine print on CAS, it clearly mentions that the channel can opt to a pay status given four weeks of notification. So it’s not like we are risking anything. We are just saying that given the situation today and subscription offers being limited we thought it best to stay FTA. In case you noticed, by January a whole lot of unprepared viewers were staring at blacked out screens. But Times Now was available. When we know that the timing is appropriate we will go pay.
    By that you mean that you would have a run a risk by going pay now…
    Yes, it may have hurt us as a business. But for now we are available on all platforms – digital, Sky, Dish, analogue…

    Times Now consistently topped the most watched news channel by India’s affluent sections in the first findings of TAM’s Elite Panel set up to understand TV viewing habits of the country’s elite…
    We are very clear that our ratings don’t begin or end with the findings of the TAM national or elite panel data. Also the Elite panel was set up recently and if you look at the last quarter percentage analysis Times Now has maintained its position between No. 1 and No.2 in the past 13 weeks in a row. (Counting up until the 31st). Look at the sampling used by the peoplemeter – 25+ males, 1 million population cities, etc- whether it is TAM or Amap or other broadcasters – this is how they set their benchmarks.

    The advertisers may worry about it but if we look at the news space itself – it started out with being a one horse race, then a two horse race and now they call it a three horse race. Either ways we are benefiting from the category but that does not mean we look at their findings to mould our content.

    One of the findings of the Elite panel suggested that most viewers watching English news channels prefer to watch news even on weekends. Has that finding been considered by the channel?
    We firmly believe that the heartland of news lies on prime time. But yes, we are bringing a sharper news focus to our weekend lineup.

    When Times Now launched it made no bones about the fact that it would be a urban channel? Is there a fear that you might be losing both an audience and an advertiser in a non metro by positioning yourself in this niche bracket?
    We maintain that we are a urban channel with a special focus on urban issues. We cannot satisfy everyone, we will have to choose and serve our target audience. The big focus in 2007 will be to prove our presence in the market place. Our intent is to make ourselves a habit.

    Every single property from the Times Group is a leader in its field. Does that mean mounting pressure on you?
    I think we are allowed to work fairly independently. But yes, we know the baggage we carry. The complexities to be a leader are far more severe in our case.