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What’s the big picture in the television industry as you see it?
Digital television and various delivery platforms for content are certain to make things exciting. The new digital wave is going to change the consumption patterns of electronic content. Platforms like DTH, IPTV, mobile TV, podcast and broadband will all happen and audiences would not be just passive onlookers, but participants and partners in the business of packaging, delivering and consuming content.
We will need to be ready for all these. For example, mobile video is going to be a big thing in India too in the near future.
At a time when all these things are poised to happen — and happening — the biggest challenge for any management is to figure out ways to cope with technological advances. In India, there are over 100 million mobile phones, over 100 million TV homes out of which approximately 60 million are cable and satellite homes. Just look at the consumer power of these various platforms. I see this as the future.
Any management that could figure out ways to make its content consumable worthy for people on such different platforms would be the real winner. In the next five years, I foresee Indian media companies scaling up their operations.
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Do you foresee multi-billion dollar Indian media companies, especially broadcasting companies, coming about in future?
Why not? If they can do it in other parts of the globe, why not in India? With ramping up of operations, valuations too would go up. If you can have a Viacom being valued at $25 billion, CBS at $20 billion, Walt Disney at $65 billion, News Corp at $20 billion and NTL at $ 7 billion (all valuations mentioned are approximate), why not a multi-billion India broadcaster?
As India globalises and broadcasters scale up operations, in the next five to six years we could see several multi-billion dollar media companies in India.
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How is Global Broadcast Network, managing CNN IBN and Channel 7, gearing up to take advantage of the developing scenario?
The first thing for us was to get CNN IBN on track and build it up as a strong, credible news source. After having done that, we are going in for increased interactivity as audiences are our partners and their involvement is very necessary. The programme Citizen Journalist is just one such initiative. Once people get used to that, then the advertising revenue will follow.
Second, as a news company we decided not only do we have to be present in the English space, but also in the Hindi segment. For this we decided to go the acquisition route for Channel7. From a management perspective, while CNN IBN is on a growth path — our ratings have been good — Channel7 gives us presence in the vast Hindi market. In future, we’ll launch more channels, but getting Channel7 up there with the big boys and increasing its market share is the big task ahead of us all.
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‘Getting Channel7 up there with the big boys is the big task ahead of us all‘
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How do you want to consolidate your position as a company?
As a group — GBN is part of the Television Eighteen Group — we do have synergies and from the management’s perspective it’s to build up an organization that would be present in all spheres of general and business news in both English and Hindi. (Television Eighteen runs CNBC TV18 and Hindi channel Awaaz).
As a bouquet of channels, over a period of time we’d go pay to exploit the various distribution platforms. When that happens, we would also tie-up with one of the existing distribution bouquets (Zee Turner, Star, and One Alliance).
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When will the group channels actually align with an existing distribution bouquet?
Pretty soon. We would engage in a dialogue and tie up with one of the existing distribution platforms. All such platforms need good content and we feel that our channels make compelling viewing. Within a year you’d see developments on this front.
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Would that mean both CNN IBN and Channel7 become pay channels?
CNN IBN certainly would as all other English news channels are. CNBC TV18 draws in a substantial amount of subscription revenue. We’d keep Channel7 free to air (like other Hindi news channels) till the time leaders in this space decide to make some radical moves.
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Has GBN given up altogether an option of foraying into non-news segment of TV broadcasting?
AT GBN, the charter is to concentrate on the news segment. Over a year’s time, we’d continue to launch more channels, but within the news segment. News is not just as we see it. It can be lifestyle and sports too as news encompass all these things. GBN would continue to operate within its core strength and there I don’t see an entertainment channel fitting in.
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How much of the expansion will depend on technologies like CAS and DTH proliferating in the Indian industry?
Our expansion plans are not too dependent on CAS or DTH or any other new technology. Things like CAS and DTH are already making their presence felt. However, we do assume that newer technologies will come in and we should be ready for the situation. But if the future doesn’t also arrive over the next 12-18 months, our expansion plans are unlikely to get affected.
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How would you describe the present distribution scenario? You are considered a wiz in that field having, reportedly, done wonders in your previous organisation, NDTV?
At this point of time distribution is an important component of the business. It’s like having good content. Look at FMCG companies like Coke and Pepsi. They are doing well because not only do they have popular products, but also great distribution and marketing strategies. The television business too is like that; at least evolving into one where it is important to not only have compelling content, but also good distribution. People are realizing this and have started investing in distribution to have the right mix.
Distribution will also play a key role as the TV business goes forward with newer technologies and platforms coming up. Whether a TV channel needs to be on all platforms, whether podcast is good for only news and not entertainment, whether long term deals are good…questions like these would have to be asked by a management and answered.
At GBN, we have decided that our channels should be on all platforms and available everywhere with the final aim of building up a rapport with the consumer in whichever way he wants to consume news. With India presently facing bandwidth problems where one TV channel is less clear than the other on a cable network, for example, it’s very important to be available on other platforms too. It’s all about building relationships with consumers, distribution partner(s) and clients.
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Though you said the company is planning to join hands with an existing distribution partner, there are reports that GBN and TV18 Group would like to build up a distribution team of its own. Comment.
As far as GBN is concerned, we’d join a bouquet as of now. We do have an in-house distribution team, which services the clients. But that’s more from the point of view of relationship building. You need a different arm to collect money from the market and a different set-up to build relationships. We feel it’s better to have two arms doing (seemingly) separate work.
Star, One Alliance and Zee Turner have built up an expertise in the area of collecting money and the feeling at GBN is that we should go along with it, even as an in-house team works on affiliates and relationships with them. Both can be complementary to each other.
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You mean to say the in-house distribution team would just concentrate on building relationships, while the actual work is outsourced. Seems a bit strange to me, but what do you feel? That’s how the Indian market has developed so far and we are not here to change things overnight. Our distribution team may help a foreign client, which we are doing. We have just signed up to be the Indian agent of Australian Broadcasting Corporation (ABC), an infotainment channel with large doses of news and travel shows. We don’t mind forging relationships with such foreign channels.
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Did GBN pay carriage fee when it launched its first channel?
We did pay some amount, but that’s a standard practice. Whenever a new product is launched, one pays for visibility. Even abroad TV channels pay for visibility in the initial stage. These are considered part of the overall expenses.
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Would GBN go in for CNN-type of licensing deals as it expands its portfolio?
We are very clear that we want to build on our existing relationships and forge new ones. We have learnt a lot from CNN at CNN IBN. Would we do similar deals as we move ahead? It depends on the value a foreign partner, or for that matter any partner, brings on the table. If for a future channel, we feel a partner can bring some value on the table, we’d explore all possibilities.
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‘We have just signed up to be the Indian agent of the Australian Broadcasting Corporation‘
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Was it a tough task integrating the working of Channel7 with the group?
Some of the integration process is still on, but on the whole the exercise has been smooth and quite seamless. People have been busy with the re-launch, but over a period of time the management would concentrate on the integration in its entirety. The former owners understand our goals and appreciate that a lot of effort is being put in to build value.
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How did GBN/TV18 Group zero down on Channel7 for acquisition?
I think it just happened. But two things contributed to the deal going through. One, the promoters of Jagran (which formerly owned Channel7) were professionals and, second, there was hardly any baggage in the sense that the channel was barely one- year old. We felt that the management expertise at GBN and TV18 Group could do wonders with Channel7 and, as I said, it just happened.
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What’s the next stage for Channel7?
When we took it over, Channel7’s market share was between 6-7 per cent. Not bad for a year-old channel, but Hindi is a very competitive market. That it’s also big, makes us optimistic. So, we started off with 6-7 per cent market share of Channel7 and have managed to ramp up the share up to slightly over 10 (based on data of a week before the interview took place). The need is to carry on growing.
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From a management perspective, do you foresee any trend emerging in the mass Hindi news market?
Aaj Tak continues to be the leader, remarkably hanging on to the advantage it took when it started several years back, but the viewership pattern for other channels are changing. In recent times, Star News has occupied the No. 2 slot, which was earlier ruled by NDTV India. This changing viewership pattern gives us some hope. It’s a long haul for Channel7, but we would certainly like to build it up as the next most credible platform for news in Hindi.
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As subsets of the TV business, what are the other revenue streams being tapped by GBN?
Making content enabled and customized for different platforms is certainly one. Syndication of programming from the archives is another. And, taking the channels international would be a big thing. Especially if we can manage to strike lucrative deals abroad in markets like the Middle East, the US and the UK.
We have signed a non-exclusive pact with a telecom major to make mobile handset-enabled content and feel that such relationships with other telecom companies would bring in substantial revenue over the years.
I also feel the company needs to have a separate division where people think and make customized content for various delivery platforms. It’s not easy to encapsulate 30-minute news bulletins into one and two-minute capsules. All over the world, people are experimenting and so are we on various aspects of this business like which content will work on mobile TV, for example, and what will not.
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What percentage of the overall revenue do you think is likely to accrue from such subsets of the business?
Quite significant over the years. In the next five to six years about 10-12 per cent of the revenue would come from content tailored for various platforms. At the moment, we are trying to form relationships for the convenience of the consumer. Going forward, this would increase also. It’s all in the future, but for that we need to be prepared. We are very clear that we are doing it and that’s why we are also building up a strong tech team.
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What sort of investment has gone into GBN up till now?
I think in the excess of Rs 100 crore (Rs 1 billion), excluding the acquisition cost of Channel7).
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As the management head of a young company what’s your priority — the topline growth or would you rather watch the bottomline?
We would do both. First, we’d build value, which we are doing. Second, we are also focused on the balance sheet. We are very clear that apart from building values and credibility, we are here to do business too.
It’s too early to comment on the topline growth, but it’s picking up and doing better than our expectations. By the time we complete a year around January 2007, as a company our financials should be healthy. Unless, of course, something very dramatic happens with the economy and it goes into a tailspin over the next six months.
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When do you think the company would reach a breakeven point?
Very soon. I am confident that by March 2007, we should be in a position to tell our shareholders some good news. Presently, we are doing well quarter-wise and the company is fairly comfortable even now. We have got the viewership, which will lead to revenues. It’s amplified in the fact that we have about 80-100 brands on our channels.
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What made you get into the entrepreneurial mode? Was it lack of due recognition at NDTV where you spent almost two decades engineering lucrative deals for the company?
It was a combination of various factors. As a distribution and finance person, I could foresee the changes that would take place in India — changes where you need to move in and be part of. Such opportunities don’t come every day.
Moreover, the equation and mix was just perfect to try taking advantages of the changes happening in the Indian industry. Rajdeep (Sardesai) brings in the editorial strength, I bring in the business acumen, while Raghav (Bahl, the promoter of TV18 Group) and Haresh (Chawla, the CEO of TV18) bring in the group synergies and infrastructure. It was a combination of like-minded people.
Let me make things clear that it was not that NDTV was giving me a short shrift or not agreeing with my vision. NDTV is a fantastic company. It was pure entrepreneurial spirit where one wanted to chart out one’s own path and take some risks. It has worked fairly well till now and let’s hope that in future also it does so.
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