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Tag: Sujatha Shreedharan

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

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

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

     

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

     

    Excerpts:

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

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

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

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

     

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

     

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

     

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

     

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

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

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

     

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

     

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

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

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

     

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

     

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

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

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

     

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

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

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

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

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

     

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

     

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

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

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

     

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

    How does this translate into sales?

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

     

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

     

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

     

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

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

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

     

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

     

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

     

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

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

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

     

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

     

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

     

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

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

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

     

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

     

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

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

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

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

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

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

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

     

    So it is great that the advertisers are looking at World Cup. For us the larger worry is the movement of eyeballs from the general entertainment channels to the sports and news channels. Finally it’s a question of checks and balances. Is this rupee spent worth it? Any advertiser would ask himself that before putting up his money. Otherwise it becomes like a punter’s game.
  • ‘Radio will certainly see consolidation next year’ : Apurva Purohit – Radio City CEO

    ‘Radio will certainly see consolidation next year’ : Apurva Purohit – Radio City CEO

    The radio industry is poised to make its next big leap as radio stations gear up to implement the Phase 2 licenses. The metros have been covered and it is now the turn of the smaller cities to experience FM magic. Radio City has been a pioneer in the FM boom with the first ever FM station in India- Radio City, Bangalore set up in 2001.

    Five years on Radio City CEO Apurva Purohit details the changes in this dynamic industry and all the challenges it’s yet to face in an interview with Sujatha Shreedharan from Indiantelevision.com

    Excerpts:

    The Phase 2 bidding has seen the major networks, including Radio City, expanding their footprints to cover mini metros. What are the unique challenges one would face when it comes to setting base in a small local setting?
    Clearly, when we had decided to go in for the second phase of bidding we had decided to restrict ourselves to metros and mini metros only. Essentially what we were saying is that we will go for the top 15 cities where we have over 70 per cent of the advertising revenue and they are in certain tone and manner and feel similar to the large towns we have been operating in.The only exception is the whole Maharashtra belt which includes Ahmednagar and the smaller stations. And this is a call that we took because networking is allowed only in these cities which means you set up your network in Ahmednagar and run Sangli and Nanded from that station. We took that call because we wanted a network station in our portfolio. Also Maharashtra is a rich state and works from the advertisers perspective. We also believe that our SEC A and B market are not dramatically different in these regions whether it is in terms of sophistication, exposure to media or even exposure to FM. They may be at different life stages but in terms of consumer, percentage of SEC AB population, income level or education or even ethos they are broadly similar. Also you must remember that we have been running the Lucknow FM station for five years. We have the experience of running a FM station in a mini metro and we hope to translate this experience into other smaller cities.

    What about the language and flavor of these upcoming FM stations?
    Radio City does believe in typically adapting itself to the local flavor. At the same time you must remember that we are positioned as a premium, up market SEC AB kind of stations. Therefore our language mix does tend to be different from the typical mix than a mass station is concerned. For instance in Bangalore we do run a lot of English, Hindi and Kannada whereas the other stations are typically Kanada stations. In Chennai, we are very much English and Tamil. In that sense, the kind of RJ talk will be focused on the premium market.

    What about a city like Pune?
    You know Pune is culturally very similar to Mumbai, so that is the kind of mix one is likely to find. Of course it will be adapted to the local culture of Pune which is rich in theatre or Marathi music.

    With the setting up of stations in mini metros, Radio City will now look at dual competition – from existing network players who are also setting up their stations as well as from single city players. How will you tackle that?
    Certainly the local players have taken a single city or selected a particular city because of various reasons like their already established status in say print or publishing. So they are very focused and are able to get into a mass position because they are local. Besides radio while it may have a national brand, does tend to also try to be local. So there is competition. Big, small, single city networks – they are equal competition. The other thing is that I think the position we have taken which has evolved over the last five years is differentiated not only from single city players who are local or mass but also the network player. What I am trying to say is that single city players tend to take the bottom end of the pyramid – local, regional, SEC ABC, while network players have taken the SEC AB kind of position which is mass but on a network level. Direct competition is therefore the network players, while local stations tend to be competition to players like RED FM.

    What about advertising revenue accruing from mini metro stations?
    In fact content is where you could say that differentiation gets greyer. As far as revenue is concerned, that’s a no-brainer since we are trying to get ads from the corporate clients and large national players. In that sense the local players are no competition. The question to ask is – Is the advertiser trying to buy radio because you also have print or is the advertiser trying to buy a good network which is either number one or two. We are very clear that we as a network focus on the right kind of network in 15 of the top cities. In revenues there is no competition. As far as content goes, there will be competion with local players.

    A few years ago, differentiators were perhaps easy to identify within the few radio players. With the numbers growing how does one still hold on to or reinvent that differentiator?
    I think the whole industry is in a state of flux. My opinion is that now, when the newer players come in they will have to recognize that if they want to grow the listenership pie they better come in with different options. The newer guys have to come in with different languages or different formats and personally if you ask me that is not happening right now. All the newer guys have really not lived up to our expectations of trying to build a differentiator and as you are rightly saying therefore today there is a mass of similar feel players. You could also say that there are certain brands which have been there for five years and therefore they have equity and there are others which are just entering the market and they are broadly similar. You must also remember that the investments in brand building have happened only recently. Before this the whole industry was struggling to find its own feet. In that sense the industry is still very nascent in terms of trying to build an image for itself. Given those kind of issues and challenges, we have been trying to portray Radio City as a brand, say, which is different from a Radio Mirchi perceived as a more aggressive and in your face – teeny bop kind of station to our more softer, slightly older 25- 30 years, premium listenership. And that has developed over a period of time and is becoming clearer only over the past year or so. Sure, the differentiation worked in a non competing market. Today, however, you have to take it to the next level and we at Radio City are doing exactly that- pushing this whole process of identifiable branding to the next level.

    Could you explain how you plan to do so?
    It is a little premature to say that, except that the intent is very much there. But if you had to look at international examples certainly there are differentiations that could be built in at the psychographic and demographic segment. Even demographically, what an 18-year-old youngster wants is different from what a 25- year-old youth wants although they may fall under the similar youth category. So if there is a difference in the kind of music they aspire to hear, they must be given that. And the radio that pushes this difference will be the radio station that stands out in the long run. I think where people have failed is that they have tinkered with the branding or marketing story but have done nothing different with the product. At Radio City we are very clear that we will only talk about the differentiation when we can actually demonstrate it in the product. No one has made that differentiation although we have tried various innovations. With Mughal-e- Azam or Babbar Sher or more chat shows. But we believe that we can really fine tune the product far far better.

    Is there a sense that this overdependence on Bollywood by all FM stations is the real cause of similarity in programming?
    I think that there is Bollywood and then there is an equally vibrant music industry although we tend to put them all in the same basket. But if you remove the animal out of the Bollywood cage, then you will realize that there is almost a 100 years worth of beautiful music. It’s just that a lot of it happens to be mostly from Hindi cinema. Ultimately it’s the music of the nation. All of us are using popular music and that is a fact of life. We are ultimately mass stations aren’t we? If we were niche stations we would have jazz. But it’s not fair to say that Indian radio stations are equal to Bollywood and therefore ‘Che!’ They are not different. Internationally also all mass stations do look at popular music. Almost 80 per cent of international stations play popular music except that they are able to differentiate themselves in terms of appealing to a particular target group or by playing only a particular ‘sound’. Unfortunately in India, we are yet to go to that second level. This can be due to various reasons- nascent industry, unsound policies. Besides how old is this industry? About five years old. Out of which four years we spent struggling to stay afloat. It’s very easy to beat up this industry with the ‘Bollywood tag’. But we’ve barely stabilized over the past two years. So there’s no doubt that the differentiation has to come and will come. And it will be led by pioneers like Radio City. If you ask me, even within the context of popular music you can differentiate.

    How long do you think this process of evolution will take place?
    According to me FM started evolving last year when the government announced regulatory corrections and a fresh package. Look at the growth since then. We have grown in stations. The number of players in each city has also increased and even in terms of content – you have an Indigo which plays English music or a Fever FM which experiments with format radio. So one phase of evolution has already happened. The second phase of evolution will start now where players like us really chart out our different positions which will happen in the coming six months. Then there will be an era where there will be more consolidation and regrouping. Some players will fall by the wayside, some players will push ahead. In the next year there will certainly be a lot of consolidation. Then there is the station setup, scaling up. A year ago radio city had about 100 people. We are now looking at having about 300-500 people in the next few months. Isn’t that a spurt? The natural evolution in any other industry would have been ten years; we have done that in three years.
    ‘The natural evolution in any other industry would have been ten years; we have done that in three years’

    Do you believe that there is bound to be a clutter with the number of radio stations coming in?
    I don’t think there will be a clutter, but in the frenzy to launch radio stations I believe that learning will not happen as it should. Learning and qualitative inputs. There is no luxury to actually test market a product or try a pilot launch. Now you say, lets launch first and we’ll figure out in the market if it needs to be changed.

    There is a huge debate over the tools used to measure listenership and advertising on radio. What does Radio City turn to?
    Of course the first thing that this industry needs to do is set up a robust currency to determine advertising and listenership. There is a strong movement towards it and sooner rather than later it will have to evolve. We prefer to use NRS and then we have Synovate which does our brand research for the last three quarters. We are just waiting for the industry to stabilize before we declare these findings publicly. We are looking at listenership understanding, listenership pattern in different cities, psychographic and demographic pattern.

    Is the industry complaining about the FDI regulation in radio which allows for only 20 per cent foreign equity?
    Currently we are happy with whatever the government has allowed considering we spent five years working hard to convince them. We are quite ecstatic about what we got. I think the government itself needs to realize that the industry is in a state of buoyancy and it must give whatever impetus it can – news and current affairs license, networking, multiple frequencies or FDI. Quite honestly, the first three rather than FDI.

    Is Radio City looking at multiple licenses and what kind of stations would you be interested in?
    Yes we would. But for now it would be like blue sky gazing. We would look at news and current affairs, different genres of music, spirituality or even different languages.

    Is there a worry about lack of a sizeable talent pool to choose from?
    Talented and skilled people is something all radio stations are worried about. Where does one get trained people from? You have to do your own training. Fortunately we realized sometime ago and we have invested reasonably in increasing the skill set. Since we’ve been here for five years, we have had a large number of people working for us. Even then it has been a challenge for us.The other problem is of course being attractive enough as an employer for a talent pool to come to us. We try to build ourselves as a brand which is informal or a fun place to work. Very ‘un media’ is how I would describe it.
    What does the re entry of Star mean to Radio City?
    It is purely an investment decision at a shareholder level. At the operational level of the company it has zero impact. And besides we have alliances with most networks as clients or media partners – DNA, Zee, Sony and Star. So there won’t be any special content tie ups with Star. So operationally nothing, it’s purely an investment decision.

    Can you give a comparative understanding of how radio looks – 2006 versus 2007?
    In terms of the ad pie there has been no dramatic change. While there has been a 30 to 40 per cent growth, there will be no big change since the new stations have not been all set up and operational. Between 2005 and 2008 one is looking at doubling the industry. It will grow from 2.5 to a minimum 5 per cent simply due to geographical coverage area. In fact we would have more than doubled if there were far more genres on offer. It won’t go up to a 60 per cent unless people start segmenting and providing different products. If I were a new player, that’s a question I would ask.
    What about the revenue and listenership growth at Radio City in the past year?
    Revenue wise we have clocked a 40 per cent growth last year. As for listenership, if I were to give a Bangalore example it has grown from 1.5 million to about 2.5 million listeners which is almost 60 per cent growth.
    Radio City has also jumped on the bandwagon to have celebrity RJs on air?
    We are very clear that a celebrity won’t work unless it’s what the programme wants or what the brand wants. Using a celebrity just for the heck of it won’t work. Taking a TV star and putting him on radio is just gimmicky. We concentrate on RJs in terms of their music understanding power. Sonu Nigam speaks about Mohammed Rafi, Roop Kumar Rathod talks about ghazal maestros. In so far as the celebrity enhances the music experience on our audience, we’ll entertain the concept. And this is the case for all radio stations, not just Radio City.
    What about the music industry and the high rate of fees it charges radio stations?
    Somewhere we will have to understand that radio will only help drive their CD and DVD sales.The cost of purchasing music must be justified. We as a large network may deal with it but what about smaller stations.
    Radio City recently tied up with Vibgyor Brand Services for on ground activation? What kind of details have been discussed since the launch?
    We are in the process of client briefings with various advertisers. We are already offering one level of on ground activity. But our clients are asking us for more than just sales promotions. They want more exciting ways of integrating our client’s needs.
    What according to you would be the next fillip for radio?
    The next fillip is of course the launch of stations in 91 cities. After that, the sky is the limit. How we use radio with net, outdoors, events, with new age media will also come under sharp focus. Look at radio and mobile. Radio used mobile much better than television. We receive 2-3 million text messages from one city, while television sees that number nationally. As for us, currently we are in the process of setting up our stations in Gujarat – Surat and Ahmedabad – and are in the process of employing people.
  • ‘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.