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Tag: Rupert Murdoch

  • ‘It is better to play in the tier 1 GEC game and go out with full ammunition’ : Rajesh Kamat – Colors CEO

    ‘It is better to play in the tier 1 GEC game and go out with full ammunition’ : Rajesh Kamat – Colors CEO

    Viacom and Raghav Bahl-promoted Network18 are furiously working together to create an entertainment conglomerate in India. The central piece in their build-up plan is a Hindi general entertainment channel (GEC) that would support other blocks like a Hindi movie channel and a clutch of regional entertainment channels.

     

    Colors has had a dream nine-month run, ending Star Plus’ nine-year rule to become the No. 1 GEC for two consecutive weeks. Puffed with big reality format shows and movies, the channel has made a mark with “disruptive” and “differentiated” content. Family dramas like Balika Vadhu, which are contrarian to Balaji Telefilms’ “K” soaps, have been lapped up by audiences.

     

    Driving Colors’ growth is Rajesh Kamat, the strategist behind the big bang theory who loves to fire at his enemies from all sides. Crafting a plan built on costly but calculated bets, Kamat has shown that a direct play in the tier I GEC space is safer than a cautious, cost-conserving approach. Playing in the tier II game can extend the channel’s break even by four more years while the revenue upside for the tier I GEC is huge, he says.

     

    No wonder Colors is eyeing a revenue of Rs 5 billion and a fourth-quarter break even this fiscal as the channel sits on a stable GRP (gross rating points) base of over 250.

     

    Timing has been key to Kamat’s success as has been the ability to take risks. When Colors launched last year, TV audiences were already showing fatigue symptoms with an overdose of look alike, urban soaps. The movie syndication business had also caught on, allowing Colors to line up a formidable “second run” movie strategy within reasonable costs. Studio18, a sister company engaged in the movie production and distribution business, also churned out hits during the year.

     

    Having spent his previous years at Rupert Murdoch’s Star India, Kamat has learnt the art of scaling up. He is ready to stitch advertising deals that would place Colors in the big league with revenues of over Rs 5 billion, kick in pay income, and take it to the international markets.

     

    The distribution deal with TheOneAlliance, which has Indian Premier League (IPL) content through Max channel, will help Colors in making a smooth transition to pay. Besides, the deal guarantees the Viacom18 channels of Colors, MTV, Nick and VH1 a subscription revenue of Rs 3 billion over three years.

    In an interview with Indiantelevision.com’s Sibabrata Das, Colors CEO Kamat talks about the challenges that Hindi GECs face in a ring that has three close competitors.

    Excerpts:

    How significant a feeling is it to end Star Plus’ nine-year rule as the No. 1 Hindi GEC and yet continue to fight weekly for the top slot?
    For a challenger brand like Colors, it was important to breach the psychological barrier and feel life at the top. But we realise we are entering into a bloodbath as there would be no undisputed leader in the Hindi GEC space. From now on, it will be a weekly battle as Star Plus will not give up its nine-year rule so easily. Zee TV is also in the race. Like in the US, we are headed for a confused leadership status with dependence on spikes and seasonality.

    So you are still in an uncomfortable position?
    Not really. We have reached a stable base of 250 GRPs (gross rating points) from our programming. And we are not banking only on Balika Vadhu, which is the biggest perception driver show for us, for our ratings. We have a basket of shows that rate over 3 TVR. With movies, we are stable in the 280-300 GRP band.

    There are other healthy indicators. Our reach at 73 per cent is higher than that of Star Plus. Our prime time GRPs are also higher.

    Movies seem to be a divider between Star Plus and Colors at this stage. But isn’t this a fickle GRP base?
    Even if we fall by half, we will have around 25 GRPs from movies. And then there will be spikes. We have created a stable base for us. The idea is to grow from this.

    Are you in a position now to play first run movies on your channel?
    Absolutely. After establishing a base of over 250 GRPs, we are in a position to upgrade to a first run of movies on Colors as we can monetise our investments on such big premieres. Our plan is to have at least eight premieres in a year. Ghajani and Jaane Tu…Ya Jaane Na are steps in this direction.

    There is also the flexibility of launching the afternoon band. When will you be playing this card?
    We do 22-23 hours of weekly programming as against 33-38 hours done by Star Plus and Zee TV. Our weekends are not full blown and we have the afternoon band to create. So when the need arises, we can increase original content on our channel to drive in more GRPs.

     

    We were actually tempted a couple of months back to firm up our afternoon strategy. But we decided instead to replace our weaker prime time content at 9.30 pm and 10.30 pm as they were not delivering to the potential. The rejig strategy worked for us as Naa Ana Is Desh Ladoo started delivering. Since the afternoon slots are also doing well with repeats, we can launch an assault with original shows when the need arises. That part of the arsenal we are yet to use.
    ‘After establishing a base of over 250 GRPs, we are in a position to upgrade to a first run of movies as we can monetise our investments. Our plan is to have at least eight premieres in a year‘

    Stable GRPs, movies, afernoon band yet to launch – are these the selling points to advertisers?
    When we launched last year, we were clear in the head that we would only do short term ad deals and at rates we were comfortable with. The channel, in any case, was growing and we believed our product offering was worth much more. We did not want a hangover of the old deals. Come 1 April and we are operating on effective rates which is clearly off old deals. It’s a free run this year and we have stitched new deals at rates which have come from a position of over 250 GRPs. Yes, we tell advertisers that we are stable on GRPs, we have 14 hours to launch, and we have these rockets in form of reality shows which are to come up each quarter.

    Is Colors targeting a revenue of Rs 5 billion and a fourth-quarter break even this fiscal?
    I can’t comment on the financials, but monetising of GRPs is our primary task now. This year will become the base and benchmark for us. For our big properties, we have already signed with Idea as title sponsor for Khataron Ke Khiladi (Fear Factor) and Maruti Suzuki for India’s Got Talent.

    Is it true that Colors’ programming budget this fiscal is Rs 4.25 billion and the running cost is at 20 per cent above rival GECs?
    When I was at Coca-Cola, I learnt how they used to pump in 70 per cent of their ad budgets in seasons. That is what we did; our annual budget is like the other big GECs while the perception we have built in the market is that we spend big monies on content. You either pump in the money upfront or spread it out. When we launched, we had Khataron Ke Khiladi and backed it with Bigg Boss 2. We fired two missiles, hoping at least one would hit. As it turned out, both became hits. And we used Akshay Kumar for our content, which also helped in marketing our channel. Obviously, non-fiction can’t sustain on weekdays. But we used Bigg Boss to build Uttaran.

    Also, our concept of cost control is reducing the number of hours of original content. Unlike conventional media thinking, we provided alternative time slots for our prime time content and introduced repeats in the afternoon band. At a time when there is so much of audience fragmentation, this worked and maximised our reach. The afternoon repeats got us good ratings.

    Considering the Hindi GEC ecosystem, is it not strategically imperative to go for a big bang theory than fiddle in the mid-rung space with low costs?
    It is better to play in the tier 1 game and go out with full ammunition than take a cost-conserving approach and prepare for gradual growth. The revenue upside is much higher if you have touched 250 GRPs. By playing in the tier II race, you are effectively pushing back your break even by four more years. You would probably save in programming costs, but distribution expenses would be the same for both the players. And if you haven’t quickly moved from a consumer push to a pull situation, you would continue to pay high on distribution. In case of Colors, we will be actually reducing our payout to cable operators in the second year. On top of that, we could turn into a pay channel.

    Were you not fortunate in that viewers were looking for a change from the ‘K’ soaps (Kyunki…, Kasauti… and Kahani…) and nobody was willing to take a risk in providing differentiated content?
    The time was favourable in that there was a fatigue built in for the kind of soaps that were running on Indian television. We made disruptive and differentiated content our main plank. We were willing to take a calculated risk; our concepts were different and on the riskier side. But they worked.
    Even the movie syndication business caught on at the time of your launch. How helpful was this?
    The strategy was to go second run on movies. We could play on that gameplan because the syndication market opened up. This made it feasible for new players like us to keep our movie slot alive within reasonable costs.

    How was the content strategy drawn?
    Broadly, between 7 to 9 pm, we placed shows that had strong appeal among non-metro masses as that is the time zone which attracts viewers from smaller towns. The 9-10 pm slot had content tailored for smaller towns as well as metros as there is an overlap of viewership. The more urban shows like Fear Factor and Sajid’s Superstars were placed at 10 pm.

     

    More specifically, we knew there was a vacuum, particularly among the Gujarati viewers, in the 8.30 pm slot after the exit of Kasauti. We placed Jai Shri Krishna (JSK) in that time slot. we worked out such micro details while planning our programming grid.

    When Star Plus launched Kaun Banega Crorepati, it built lead-in slots. Wasn’t your strategy different in that your showpiece programme Khataron Ka Khiladi was at 10 pm while the other main shows were before that?
    We couldn’t have launched Khataron Ke Khiladi at 9 pm; it had to be 10 pm. It was our differentiator show and Akshay Kumar gave it the scale.

     

    Our first task was to get noticed, invade into single TV households in prime time, and shake up the house. Outside this, we built slots through a different kind of programming slant. Balika Vadhu, for instance, was a family drama based on child marriage and carried a social message. What followed was the lead-in concept. We now own 8-9 pm and 10-10.30 pm.
    Any specific strategy for timing the launch of Colors on 21 July?
    Since IPL (Indian Premier League) was in April-May, we knew it would disrupt GEC viewership. We saw that as an opportunity to launch Colors post-IPL. It was also 2-3 months before the Diwali season, a hot time for advertisers. That gave us a window to settle in.
    The market talks of Rs 800 million as your distribution cost for the first year?
    Without getting into figures, let me tell you that we took a conscious decision to take space on cable networks next to Star Plus and Zee TV. That outlet was reasonably expensive, but it gave us strategic reach.
    Why did you decide on TheOneAlliance to distribute Colors when it turned pay?
    Besides the monetary offer (rumoured to be Rs 3 billion over three years for the Viacom18 channels of Colors, MTV, Nick and VH1), it was the IPL that swung the deal in favour of TheOneAlliance. Since we turned pay on 1 April and the IPL kicked off on 18 April, it was a good window to make the transition and yet not see impact on the ratings.
    Will there be any revenue inflow from subscription this fiscal or will it be offset against carriage fees?
    We may not see any net gain from pay revenues this fiscal, but we have a step up plan and the second and third years would be crucial. For the first six months, in fact, what we payout will be more than what we collect. If the cable operator switches us off, he will stand to lose more. This will act as a disincentive for him to switch us off. Importantly, we have done almost 80 per cent of the cable deals.
    Is Colors planning to spread its wings outside India?
    We will be launching in the US within 3-6 months. We then plan to reach Dubai before we land in the UK. International revenues fall straight into the bottomline.
    Colors has also opened up syndication revenues with JSK being licensed to Raj TV. How aggressive will you be on this?
    We are looking at syndicating our other shows like Balika Vadhu. We are getting queries from Doordarshan and other networks for some of our content. We are also eyeing the global syndication market. But we have to be careful and conscious that this doesn’t jeopardise our beam syndication plans.
    Will Viacom18 launch a Hindi movie channel and enter into regional language channels?
    Before diversifying into new products, we want to build on Colors. We want the international distribution and market to stabilise before we launch anything. We will prioritise then, based on which is the most growing pocket – a Hindi movie channel or regional channels. That is a call we will take at that stage.
  • ‘India is the only market where we pay carriage’ : Bruce Dover – Australia Network CEO

    ‘India is the only market where we pay carriage’ : Bruce Dover – Australia Network CEO

    Australia Network, the international channel from the stable of Australian Broadcasting Corporation (ABC), has a hybrid mix of news, drama, lifestyle and kids programming.

     

    The state-funded channel, which has an international presence in over 44 countries across Asia, the Pacific and Indian subcontinent, is planning to launch a kids channel for the pre-school and the 8-14-year-olds.

     

    The expansion plan in India also includes introduction of subtitles in English and Hindi. Co-production deals are part of the agenda to keep in line with India as a focus area for growth.

     

    In an interview with Indiantelevision.com’s Ashwin Pinto, Australia Network CEO Bruce Dover talks about how the hybrid programming model has worked in many markets. An old hand at media, Dover was Rupert Murdoch’s right hand man in Beijing. He went on to write a book titled Rupert Murdoch’s Adventures in China.

     

    Excerpts:

    Being a single channel broadcaster is a tough proposition. Are you planning to launch more channels in India?
    The ABC is looking at an Australian kids channel. This would cover both pre-school and the 8-14-year-olds. The idea is to roll the channel out early next year. But this would depend on the funding that we get from the Australian government.

    The BBC made an entry into India after syndicating their content to the pubcaster. Do you have any such plans?
    We have to be careful not to cannibalise our content. Otherwise you might want to start a kids channel, but find that you have already sold your content to other channels.

    How do you plan to grow in India?
    We are planning to introduce subtitles in the fourth quarter of this year. Perhaps, this is necessary because of the Australian accent that our coverage would have. We are also looking at Hindi subtitling for our movies, dramas and documentaries.We already do subtitling in Vietnam. Indonesian subtitles have been introduced this week.

    India is flooded with strong English international channels. How would Australia Network make a mark in India?
    Our speciality is that we are a hybrid channel with a varied programming mix. We have news and current affairs which make up 25 per cent. Then there is lifestyle and dramas, documentaries and children’s programming.

    Earlier the thinking was that TV channels fit single genres the best. International channels like NHK, though, are now following our model.

     

    The lifestyle content is in terms of travel shows and what it is like to be an Indian student in Australia and vice versa. We have a show called Student Postcard where one learns about the good, the bad and the ugly of studying in an Australian university. Can you go out? Can you meet girls? You want to know if certain areas are safe to go out at night.

     

    Our aim is to give Indians more insight into Australia. We do English language learning which is popular in India. This is for students who want to study overseas. We have programming as well as a site which helps you learn and become more proficient in English. Also, there is the cricket link. This helps drive interest in our channel.

    India is a difficult market to get such a niche channel like yours distributed. How much is Australia Network spending on carriage?
    India is the only market where we pay carriage fees. I can’t get into the specifics of that, but we are working with the Setpro team and they have good relations with the operators. We have a five-year deal with them.

     

    Almost 70 per cent of our viewership comes from the South. We are on the Sun Direct DTH platform. We are also available on several cable networks across the country. We have identified 15 towns where we want a sizeable presence.
    ‘Though the government funds us, the people of Australia support us. We fill up a void left by the commercial broadcasters in kids programming. Our news and current affairs content also does not carry ads‘

    Are you looking at co-productions in India?
    It is one of the areas we are looking at. We feel there is a big opportunity here. You could get an Australian cricketer and an Indian cricketer coming together for a show. Factual content around interesting issues would be our area of focus.

     

    We are also looking at doing co-productions around children’s content. We have some IP software. We do kids science programming in other countries. The software and the textbooks can be recreated.

    How many feeds does Australia Network have?
    We have three. One is for the Pacific region, which is important as there are not many channels carrying independent news in this belt. Then there is one for North and Southeast Asia. A third feed is for South Asia. We are now looking to have a feed for the Middle East.

    Which are your key markets?
    Indonesia, Singapore and Hong Kong are key markets for us. We recently launched in Indonesia and Malaysia and are satisfied with the progress we have made.

     

    India is also an important market for us. We just went through a re-branding process with the tagline ‘From Our World to Yours.’ It is about introducing Australia to India.

    What was the aim of the rebranding?
    We wanted to make it more relevant. We did work with Saatchi and Saatchi as they had the Tourism Australia advertising contract. They spent half a million dollars on research and focus groups as the contract was worth $40 million. We went to them to find out how brand Australia is being perceived in the market.

    How difficult is it to be a public service broadcaster when you have to depend on government for funding?
    We only earn 10 per cent of our costs. The government funds us. The ABC gets its budget every three years. But the people in Australia have no problem with that. The ABC has a long history of producing world class children’s programming. There is an educational bent to it and we have shows like Wiggles. Besides, we do not carry ads, something which parents love. We fill in a void left by the commercial broadcasters.

    Our news and current affairs content also does not carry ads.

    How has the global downturn affected ABC?
    The current economic situation provides an opportunity for us as private networks scale back on their expensive dramas, news and current affairs. They are forced to focus more on studio-based cheap reality shows.

    Do you have plans for the digital space?
    We will take this up as our focus area next year. We are looking at English learning applications. We will also provide news and current affairs video content on the mobile platform.
  • ‘We are identifying short term tasks and medium term tasks to get to a new, bigger Star’

    ‘We are identifying short term tasks and medium term tasks to get to a new, bigger Star’

    It’s the festival of lights. And for many the festival of noise courtesy exploding fireworks. In the hope of reducing the number of those belonging to the latter tribe, we, at indiantelevision.com, decided to put a display of firecracker articles for visitors this Diwali. We have had many top journalists reporting, analysing, over the many years of indiantelevision.com’s existence. The articles we are presenting are representative of some of the best writing on the business of cable and satellite television and media for which we have gained renown. Read on to get a flavour and taste of indiantelevision.com over the years from some of its finest writers. And have a happy and safe Diwali!

     (Written by: Thomas Abraham in 2007)

    Two men under whose collective leadership rest the fortunes of Asia’s most powerful media conglomerate. In a way, there is a commonality in how both have risen to the top at Rupert Murdoch’s Asian media arm – from the blue as it were. It was just under ten months ago that Paul Aiello, a one time investment banker, was pitchforked into the hot seat of a company riven by internal power politics and stalled growth stories in the key markets it was operating in.

    Three months later, Aiello opted for another dark horse in then Star News CEO Uday Shankar, giving the newshound turned corporate honcho operational charge of India’s lead broadcast network and the difficult task of setting things right there.

    In conversation with Indiantelevision.com’s Thomas Abraham a day after Shankar was elevated to Star India CEO (on 25 October), the two offer their most detailed overview yet, of the media conglomerate’s plans for this market and the region as a whole. Excerpts:

    These are exciting times for the industry with the economy booming and the sector seeing 20-25 % growth. How does Star view all this? What are the key factors that will drive its growth? What could work as impediments?
    Aiello: I continue to be extremely excited about the market and its growth, even though there are numerous uncertainties. You can argue that there are regulatory uncertainties, uncertainties created by increased fragmentation in viewership and increased competition. But these things are to be expected in a highly dynamic market place.

    The challenge for us is not about focusing on what Star is. It is really about what should the next Star be? What should Star be in the next five to ten years from now? That requires a lot of internal focus and development of strategies. 

    So whether it’s about our core broadcast business where we must deal with increased fragmentation, regionalization… all the phenomena that everyone looks at, we need to be there. As well as looking at the overall growth in the media market and knowing that there are other areas that we’re not in as Star; but areas where we have tremendous capabilities within News Corp and in Star, that we should move in to and make sense of.

    So we’ve been through a strategic review process and now we are coming out of that and are identifying the short term tasks and the medium term tasks to get to a new and bigger Star.

    If you get detracted by a noise event like a new show that someone else has come up with in the last one week or some uncertain ruling or regulatory decision, you can get paralysed and miss what is the more important strategic initiative on where you want to be.

    It is really important to keep that strategic vision because then you become really disciplined to stand by what the vision is and do the execution of the steps necessary, whether it is people moves or moving into new areas of business.

    So which are the new areas?
    Aiello: Certainly we need to expand the footprint of our core business of our channels. In the next six to nine months, we are going to be launching more channels.

    Five channels?
    Aiello:     Five, six channels, yes. That is one manifestation of the extension of our core business. But we are looking at many other ways to build our business.

    Like for example?
    Aiello: News Corp has tremendous capabilities when it comes to films.

    Everybody was waiting for that. Are you going to go the Sony Pictures route? Will you be getting into movies big time and will that be under your mandate?
    Aiello:     It is something for not just me to decide, but Fox to decide. We work very closely with our sister companies at New Corp. Let us see what we can do together if such opportunities make sense.

    News Corp is pretty strong in new media, internet as well.

    MySpace?
    Aiello: Yes, MySpace, Fox Interactive Media.

    Ajay Vidyasagar will be on that I am told.
    Aiello: Ajay is very involved in our new media strategy.

    If Ajay will be overseeing that side of the business, there are also the content challenges that lie ahead. How will all this be managed?
    Shankar: Ajay did an amazing job in the last eight-nine months when there was a creative management vacuum when people had left and gone away. Now we have ramped up our content team. So there is Anupama (Mandloi), there is Vivek (Behl), there is Monica and two or three others who have come in. We’ve also created a structure which is more channel focused. So there is a general manager of Star Plus, who’s Keertan (Adyanthaya). There is a GM of Star One, that’s Ravi (Menon). So the day to day channel management activities have become pretty much independent and self contained.

    So, for any of the other senior management, including myself, we don’t have that kind of daily interface. Our task has moved on to doing strategic and long term planning for the channels. Our internal understanding is that Ajay is going to primarily spend his time in building the internet business. And that’s in collaboration with MySpace wherever it’s possible. And internally, we will do a whole lot of other things.

    Where MySpace might not be a partner?
    Aiello: That’s right. Star will have its own new media strategy. At the same time Star will work with MySpace, Fox Interactive Media, in as many places as it makes sense. 


    The times of 50-on-50 top shows is history and we could soon well have a situation of three to four networks fighting it out for top honours. How do you see that panning out? 
    Shankar: I really feel that in this market, in the entertainment space, for a long time will continue to primarily be a two player market. Maybe there might be a third player who will have a little bit of traction. Who that first, second or third player is may change, in two or even in five years time. But I still think that for many years, that is what is going to be the situation.

    The big difference will be this. Typically in broadcasting globally, two key players will be the ones making money. In this market, in GEC, simply because of the size of the universe, it is possible that if people have a disciplined content approach, even the No. 3 and the No. 4 can make money.

    And our advertising space is becoming so segmented. Not everybody has to take big corporate advertisers. Not everybody has to target the same clients.

    What it requires is for people to clearly identify their TG, their target geography and smartly design unique or signature content for these TGs. My big problem is that in category after category you see, people are just cloning the leader.

    The fact is that it has worked because of the very size of the market. News is a classic example of that.

    Shankar: It has worked. But the returns are diminishing. If you see sustainable leadership in whichever category, somebody has been able to challenge the leader’s content model. Star News did whatever turnaround it could manage because it did not follow the Aaj Tak route of live breaking news. It went into appointment viewing and other kinds of signature programming.

    Now what you see is that everybody is chasing one or other player. The same thing is happening in music. You are seeing more and more commoditization of content and less and less differentiation. That is a big challenge.

    I think distribution is a huge challenge for this market; copy content is a big challenge. And the third, I am not saying necessarily in that order, huge challenge is the shortage of original quality talent; which nobody is really talking about. It is the same talent that is going around.

    If you are smart, you change three jobs in two years, your salary will go up four times, and you will get three more promotions. That does not mean that the person’s maturity has gone up or that person’s quality of skills have increased.

    Aiello: This is an issue that applies not only of India, but practically to all of Asia. You have to get fresh new talent. It is critical nurturing them and taking risks in developing them. 

     

    So the three biggest challenges over the next three years are distribution, commoditisation of content and talent management?

    Shankar: In distribution, if you were to further focus, the two challenges would be, 1) to strengthen the cable infrastructure to allow more and more channels to be delivered to the end customer, 2) is to create a regulatory environment where premium content is encouraged by monetizing.it.

    Not everybody has to pay Rs 500. There should be a good, decent family package available for Rs 75; but, somebody who wants to pay Rs 500 or Rs 1,000 and get great content, should have access to that. It is not to make an argument that people should pay through their noses; but people should have a choice.

    What is your view on Trai’s mandating pricing in non-Cas areas? I am told that broadcasters, as in the IBF, are debating challenging it legally. 

    Shankar: If there is a regulatory order, then everybody will have to comply with that. Obviously we have no choice.

    But this kind of price cap in non Cas areas, in an Indian environment where there is so much of opacity in declarations of subscriber base, is going to be extremely counterproductive for this industry. Because you’re operating in a situation where the cost of distribution has become a very important line item for all broadcasters. Except for one or two channels like Star Plus, everybody else has to shell out a large sum of money on distribution.

    The problem is that this kind of artificial cap on value, when the input costs are not being controlled, is very, very counterproductive. A whole bunch of broadcasters and many of the niches are going to become uncompetitive because of distortions in the distribution space. I think this is going to be highly detrimental.

    Yet you have all these new launches, new networks coming up.
    Shankar: Three reasons. People have faith in the Government, in God and the Regulator. 

    ‘You have to get fresh new talent. It is critical nurturing them and taking risks in developing them’

    It’s ‘karma’ then?
    Shankar: Seriously, if you look at it, there are niche channels where 30-40 per cent of their opex is the distribution fee. It is clearly unsustainable.

    This is a market where the talent costs are going through the roof because of the supply side shortage. It is a market where new competitors are coming, so your content costs are going up. Because clutter is going up, your marketing costs are going up. And your distribution costs are going completely out of whack.

    There is not even a logical relationship. Last year what you spent has no bearing on what you will have to spend this year. And in this market what you spend has no correlation to what you spend for similar deliveries in an adjoining market. This is clearly an insane situation.

    Aiello: That is not to say that some of these people will not succeed.

  • News Corp to launch Fox Business Network on 15 October

    MUMBAI: News Corp. will launch Fox Business Network (FBN) on 15 October in a bid to rival business cable channels CNBC and Bloomberg Television, a company statement said.

    To be headquartered in New York with established news bureaus in Chicago, Los Angeles, San Francisco, Washington and London, FBN has secured distribution agreements with leading U.S. cable operators including Comcast and Time Warner cable. This is expected to provide the network with at least 30 million subscribers, when it debuts.
    News Corp. chairman Rupert Murdoch had previously said it would launch the business channel in the fourth quarter, but did not provide a date.

    FBN “will look and feel different”, with more emphasis on entertainment than mere market coverage. The past several months have been spent designing the channel under the eye of senior vice president Fox News veteran Brian Jones.

    Jones reports to Fox News executive VP Kevin McGee who will manage the day-to-day operations of FBN.

    Currently, Murdoch is in the midst of talks on a $5 billion offer for Wall Street Journal publisher Dow Jones & Co. The deal would provide the new FBN with reporting staff and content from one of the most respected business newspapers.

    However, if the deal is through, a content sharing deal between rival CNBC and the Journal that is active till 2012, is expected to complicate any possible synergies between FBN and the Journal.

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

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

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

     

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

     

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

     

    Excerpts:

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

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

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

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

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

     

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

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

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

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

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

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

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

     

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

     

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

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

     

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

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

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

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

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

     

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

     

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

     

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

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

     

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

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

     

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

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

     

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

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

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

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

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

    News Corp to launch business channel later this year

    MUMBAI: News Corp CEO Rupert Murdoch says that his media conglomerate plans to launch a more ‘business-friendly’ business channel in the US than its rival CNBC.

    The Fox Business Channel will launch in the fourth quarter in at least 30 million homes.

    The channel, which will directly challenge CNBC for domination in the small but lucrative financial news market, will be developed and overseen by Fox News Channel/Fox Television chairman and CEO Roger Ailes.

    Reports state that the business channel will be housed along with Fox News at the News Corp. headquarters in New York. It will have initial distribution across the US, including New York, with Time Warner Cable, Comcast, Charter and DirecTV.

    The project has been in the works for several years, and the company was waiting for distribution to be in place.

    Murdoch claims that CNBC is often too negative and focussed on financial scandals. He sounded a note of confidence by saying that CNBC would copy a lot of things that the new channel would do.

    Meanwhile, Murdoch also said that over 10 per cent of the media company’s sales will likely come from its digital businesses, from Internet to cell phones, in the next five years.

    The view excludes Internet properties owned by its local newspapers, such as the New York Post’s NYPost.com site, whose split of digital revenue could well go higher

    Revenue from sites including MySpace are expected to account for about 2 per cent of News Corp’s fiscal 2007 sales.

  • Vijay Singh to be next Star India COO; Peter Chernin flying in

    Vijay Singh to be next Star India COO; Peter Chernin flying in

    MUMBAI: After Star CEO Paul Aiello, it is News Corp president and COO Peter Chernin, Rupert Murdoch’s right hand man, who will be coming to these shores to shore up the morale of the Indian team. Chernin is flying in late on Thursday and will be in Mumbai over the following three days meeting the troops as it were.

    And in a related development, Indiantelevision.com learns that Vijay Singh, former CEO of Sony Music and currently Tata group company Tetley Tea’s managing director, developing markets, has been appointed as Star India COO.

    The main agenda of Chernin’s visit would appear to be to reinforce India’s importance, as well as to make clear how the new executive structure in Hong Kong and India (of which Singh is a key element) will mesh with News Corp’s overall growth plans.

    Singh, who will complete serving out his notice at Tetley by the month-end, is not taking up his new assignment immediately however. Indications are that he will join Star in the latter half of March. Singh will reportedly be taking up his new position just ahead of the departure of Star Entertainment India CEO Sameer Nair, whose last working day as head of India’s lead broadcaster is 26 March.

    Star officials were unavailable for comment on the issue of Singh’s appointment.

    As regards the announcement of a CEO, it will be made within the next one to two months is all that Indiantelevision.com had been able to garner from industry sources at the time of filing this report.

    With Singh’s arrival as COO, and with Aiello holding additional charge as Star India CEO, the jewel in News Corp’s Asian crown will have gone back to the structure it had before March of 2006 when Nair was COO and Peter Mukerjea was CEO. Mukerjea exited Star as of 1 February.

  • Murdoch to leave BSkyB later this year

    Murdoch to leave BSkyB later this year

    MUMBAI: UK pay TV platform BSkyB CEO James Murdoch is believed to be leaving the firm later this year to take up a position at US media conglomerate News Corp.

    A report in the Mail on Sunday says that Murdoch will be replaced at Sky by the head of Sky Italia, Tom Mockridge. Reports add that News Corp chairman and CEO Rupert Murdoch is understood to have wanted his son to return to America at the end of last year.

    However James wanted to remain at Sky at least until this summer to see through the introduction of both broadband and high definition television, both of which were projects he instigated.

  • Paul Aiello named Star CEO after Guthrie exit

    Paul Aiello named Star CEO after Guthrie exit

    MUMBAI: Star has appointed Paul Aiello, currently its president, as chief executive, replacing present CEO Michelle Guthrie, who has resigned. Guthrie’s departure will be effective 1 March.

    It was only last April that Aiello was appointed president in a newly created role and put in charge of developing strategic and business directions for the pan Asian broadcaster while overseeing corporate functions including business development, strategy and implementation, Star ventures, government affairs and corporate communications.

    The position of Steve Askew, chief operating officer (Star) & president (Star Entertainment) in the new dispensation is also unclear. Askew is presently on four months’ sick leave, according to industry sources.

    Commenting on the announcement, News Corp chairman Rupert Murdoch said, “Paul has done an exceptional job at Star since joining the company, leading its corporate team and overseeing its overall growth strategy. Paul’s business acumen, strong leadership and financial skills as well as in-depth knowledge of the diverse and complex media and telecommunications industries in Asia make him the ideal candidate to steer the long-term growth and success of the company.”

    Meanwhile, Star officials refused comment on reports that Star Entertainment India CEO Sameer Nair had resigned and would be joining Prannoy Roy’s NDTV. Attempts to contact Nair proved fruitless at the time of filing this report.

    When contacted, NDTV officials were quite categorical that reports of Nair’s joining the news major to head up their broadcast entertainment venture were without basis.

    Aiello’s appointment followed soon after the creation of a new, convoluted executive structure within Star wherein Steve Askew was named president of Star Entertainment in addition to COO of Star.

    The biggest news then was of course the shake up in the Indian operations wherein two units were created – Star Group and Star Entertainment – with Peter Mukerjea made CEO of Star Group India and Nair promoted from COO to CEO of Star Entertainment.

    As CEO of Star Entertainment, Nair was given the responsibility of overseeing all day-to-day operations including programming, marketing, advertising sales and distribution while pursuing growth opportunities in new media including wireless and internet.

    Nair was reporting to Askew while Mukerjea continued to report to Guthrie.

    Aiello, 42, joined Star from Morgan Stanley where he worked for more than nine years. Prior to joining Morgan Stanley, Aiello was vice president, mergers and acquisitions, Investment Banking Department of CS First Boston Limited, Hong Kong.

  • Star One, Star Gold launch on Sky in the UK

    Star One, Star Gold launch on Sky in the UK

    MUMBAI: Pan Asian broadcaster Star has announced the launch of Star One and Star Gold on the Sky digital TV platform in the UK.

    The launch expands Star’s Indian channel offering on BSkyB from the current line-up of Star Plus and Star News to a total of four channels.

    Indiantelevision.com was the first to report on 3 November that Entertainment channel Star One and movie platform Star Gold would debut in the UK later this month on BSkyB, which is over-35 per cent owned by Rupert Murdoch’s News Corp.

    Star One and Star Gold will be available on BSkyB’s Entertainment Pack. The channels will enhance South Asian programming for viewers in 8.2 million households across the UK and Ireland.