ITV

Tag: Tarachand Wanvari

  • Games, network services raise Sony Q2-2015 revenue, impairment of goodwill widens loss

    Games, network services raise Sony Q2-2015 revenue, impairment of goodwill widens loss

    BENGALURU: Sony Corporation (Sony) reported sales of ? 1,901.5 billion (US$ 17,445 million) in Q2-2015, (quarter ended 30 September 2014, current quarter) an increase of 7.2 percent compared to ? 1774.2 billion in Q2-2014. An operating loss of Y 85.6 billion yen (US$ 785 million) was recorded in the current quarter, compared to operating income of 13.9 billion yen in Q2-2014. This significant deterioration was primarily due the ? 176.0 billion yen (US$ 1615 million) impairment of goodwill recorded in the company’s Mobile Communications (MC) segment says the company.

    Sony says that increase in sales was primarily due to a significant increase in its games and network services segment (G&NS) sales, reflecting the contribution of the PlayStation 4 (PS4), a significant increase in devices segment sales primarily due to the strong performance of image sensors, as well as the favourable impact of foreign exchange rates. This increase was partially offset by a significant decrease in sales in All Other, primarily related to Sony’s exit from the PC business, explains the company.

    Mobile Communications Segment (MC)

    Sony’s MC segment’s sales increased 1.2 percent in Q2-2015 to ? 308.4 billion (US$ 2829 million) from ? 304.6 billion, primarily due to the favourable impact of foreign exchange rates, partially offset by a decrease in sales mainly in Japan.

    Operating loss of ? 172.0 billion (US$ 1578 million) in Q2-2015 was recorded, compared to operating income of ? 8.8 billion in Q2-2014. As mentioned above, this deterioration was primarily due to the impairment charge of goodwill recorded in this segment. Further, in the current quarter, marketing expenses and research and development expenses increased year-on-year in order to expand sales channels adding to the loss says Sony.

    Games & Network Services Segment

    G&NS sales increased 83.2 percent in Q2-2015 to ? 309.5 billion (US$ 2839 million) from ? 169 million in Q2-2014. This significant increase was primarily due to the contribution from PS4 hardware sales, a significant increase in network services revenue related to the introduction of the PS4 and the contribution from PS4 software sales, partially offset by a decrease in PlayStation3 (PS3) hardware and PS3 software sales. Sales to external customers increased 97.0 per cent year-on-year.

    Operating income of ? 21.8 billion (US$ 200 million) was recorded, compared to an operating loss of ? 4.2 billion in Q2-2014. This improvement was primarily due to the impact of the above-mentioned increase in sales related to the introduction of the PS4, partially offset by the impact of the above-mentioned decrease in PS3 software sales says the company.

    Imaging and Print Services (I&PS)

    I&PS sales increased 1.8 percent year-on-year to ? 178.6 billion (US$ 1639 million) in Q2-2015 from ? 175.5 billion in Q2-2014. Sales were essentially flat year-on-year primarily due to the favourable impact of foreign exchange rates and an improvement in the product mix of digital cameras reflecting a shift to high value-added models, partially offset by a significant decrease in unit sales of digital cameras.

    Operating income of ? 20.1 billion (US$ 184 million) was recorded, compared to an operating loss of ? 2.3 billion in the same quarter of the previous fiscal year. Sony says that this improvement was mainly due to a reduction in selling, general and administrative expenses, the above-mentioned improvement in product mix reflecting a shift to high value-added models and the favourable impact of exchange rates.

    Home Entertainment & Sound (HE&S)

    HE&S sales increased 7 percent year-on-year to ? 282.4 billion (US$ 2590 million) from ? 263.8 billion in Q2-2014. This increase was primarily due to a significant increase in sales of televisions and the favourable impact of foreign exchange rates. The company says that unit sales of LCD televisions increased significantly in Europe, North America, and Asia-Pacific, partially offset by a significant decrease in unit sales in Latin America. Audio and video  category sales decreased mainly due to a decrease in sales in Latin America reflecting adverse market conditions.

    Operating income of ? 8.0 billion (US$ 73 million) was recorded, compared to an operating loss of ? 12.1 billion in the same quarter of the previous fiscal year. This improvement was primarily due to cost reductions and an improvement in the product mix reflecting the shift to high value-added models, partially offset by a decrease in the average selling price of LCD televisions.

    Sony reveals that television sales increased 14.7 per cent year-on-year to ? 199.7 billion (US$ 1832 million) in Q2-2015. This significant increase was primarily due to the above-mentioned significant increase in unit sales of LCD televisions, and the favourable impact of foreign exchange rates.

    Operating income of ? 4.9 billion (US$ 45 million) was recorded, compared to an operating loss of ? 9.3 billion in Q2-2014. This improvement was primarily due to cost reductions and an improvement in the product mix of LCD televisions reflecting a shift to high value-added models, partially offset by a decrease in the average selling price.

    Devices

    Devices segment sales increased 23.1 percent in Q2-2015 to ? 247.7 billion (US$ 2273 million) from ? 203.1 billion in Q2-2014. This increase was primarily due to a significant increase in sales of image sensors reflecting higher demand for mobile products, an increase in sales of camera modules, as well as the favourable impact of foreign exchange rates. Sales to external customers increased 25.1 percent in Q2-2015 reveals the company.

    Operating income increased ? 17.7 billion to ? 29.6 billion yen (US$ 271 million). This increase was primarily due to the above-mentioned increase in sales of image sensors, the favourable impact of foreign exchange rates and an improvement in the results of the battery business.

    Pictures

    Pictures segment sales increased 2.4 percent to ? 182.2 billion yen (US$ 1671 million) in Q2-2015 from ? 177.8 billion in Q2-2104 primarily due to the favourable impact of the depreciation of the yen against the US dollar. The decrease on a US dollar basis was primarily due to a decrease in sales for Motion Pictures, reflecting lower theatrical revenues, partially offset by higher home entertainment and television licensing revenues.

    Theatrical revenues decreased as the same quarter of the previous fiscal year benefited from a higher number of theatrical releases. Home entertainment and television licensing revenues were higher as the current year benefited from the home entertainment releases of ‘The Amazing Spider-Man 2’ and ‘Heaven is for Real’ and from the television licensing sales of ‘Men In Black 3’ and ‘The Amazing Spider-Man’.

    Operating loss decreased ? 16.7 billion y-o-y to ? 1.0 billion (US$ 10 million), as Q2-2014 included higher marketing expenses as a result of a higher number of theatrical releases as well as the underperformance of ‘White House Down’.

    Music

    Music segment sales increased 1.5 percent in Q2-2015 to ? 116.8 billion (US$ 1071 million) from ? 115 billion. The decrease in sales on a constant currency basis is primarily due to lower music publishing and recorded music sales, partially offset by higher visual media and platform sales. On a constant currency basis, sales of music publishing decreased primarily due to a decrease in revenue outside of the US recorded music sales decreased slightly as the worldwide decline in physical and digital download sales were partially offset by higher digital streaming revenues. Visual media and platform sales increased mainly due to higher sales of animation products. Best-selling titles included Barbra Streisand’s ‘Partners’, Chris Brown’s ‘X’ and Sia’s ‘1000 Forms of Fear’.

    Operating income increased ?2.1 billion in Q2-2015 to ? 11.8 billion (US$ 108 million). This increase was primarily due to an improvement in equity in net income (loss) from EMI Music Publishing and a reduction in selling, general and administrative expenses.

    Financial services

    Financial services revenue increased 10.6 percent in Q2-2015 to ? 269.6 billion (US$ 2473 million) from ? 243.7 billion primarily due to an increase in revenue at Sony Life. Revenue at Sony Life increased 12.1 percent in the current quarter to ? 242.5 billion (US$ 2225 million), mainly due to an improvement in investment performance in the separate account resulting from a larger rise in the Japanese stock market compared to the same quarter of the previous fiscal year, as well as an increase in insurance premium revenue reflecting an increase in policy amount in force.

    Operating income increased ? 9.3 billion to ? 47.7 billion (US$ 437 million). This increase was mainly due to an increase in operating income at Sony Life. Operating income at Sony Life increased ? 9.3 billion y-o-y to ? 45.7 billion (US$ 419 million) primarily due to an improvement in investment performance in the general account.

    All Other

    All Other segment sales decreased 48.8 percent in Q2-2015 to ? 108.6 billion yen (US$ 997 million) from ? 212 billion in Q2-2014. This decrease was primarily due to a significant decrease year-on-year in unit sales of PCs reflecting Sony’s exit from the PC business.

    Operating loss increased ? 15.7 billion year-on-year to ? 18.2 billion (US$ 165 million). This deterioration was primarily due to a gain of ? 12.8 billion from the sale of certain shares of M3 recorded in the same quarter of the previous fiscal year and the recording of PC exit costs in the current quarter.

  • IRF 2013: James Cridland: Indians love their radio II

    IRF 2013: James Cridland: Indians love their radio II

    This is the second part of the excerpts/summary of radio futurologist James Cridlands session on “How People Are Listening to Radio in Today’s Multiplatform World – and what your station needs to do about it” at the recently concluded International Radio Festival 2013 in Zurich (IRF 2013) by The Indian Television Dot Com Pvt. Ltd. South India Head Tarachand Wanvari. You can read the first part here: IRF 2013: James Cridland: Indians love their radio.

    In Norway, a little piece of research was done where a man called Gunnar listened to internet radio on a full battery charge of his exciting Android device. He got six hours 53 minutes worth of radio streaming on 3G through his mobile phone until his battery ran down. He used it for nothing else, just streaming and then you look at how much he got in terms of FM – he got 48 hours out of the same battery. FM on mobile is a pretty good thing as compared to radio on mobile phone internet on the same device, opined Cridland.

    My definition of radio is a live simulcast, Pandora is a not a radio station. My definition of approved mobile phones is that they are a little more than a transmitter-receiver which put the cord in touch with the personalised operator who dials up the number you want and then connects your remote radio extension with the rest of the telephone network.

    Who is using mobile phones to tune in to radio?

    “In the UK, there is a growth of adult population from a little more than 10 per cent in 2010 to 20 per cent now. If you look at young people then it is considerably higher from about 30 per cent in 2010 to about 40 per cent. Radio on the mobile is definitely a young person’s thing and that’s good news for the future of radio because younger people are by and large tuning into less radio than they ever have. Over 50 per cent of the adults in the UK own smart phones and that number is similar for most other European countries.”

    “They are listening to FM mobile radio on their mobile phones by streaming. Back in 2010, 53 per cent of the listeners tuned into FM on their mobile phones, while 16 per cent ran a branded radio ad from a radio station. If only Apple would listen and included radio into its iPhones, there would be a lot more.”

    “There are discussions in the US about many mobile phones not having FM radio. Many of the US mobile cell operators don’t want to put FM radio into phones because they sell bandwidth and they think its competing. That is a perception that is changing there, partially because of the work that Next Radio has been doing. Now you find less and less mobile phone companies 

    deliberately taking out the FM from phones. I don’t really understand why Apple has not put FM into the iPhone.  One story that I have heard is that Apple do not consider the user experience of FM on a mobile phone to be good enough.”

    Apple v/s Android

    “53 per cent of the mobile applications downloads are happening on the Apple iPhone and 31 per cent on Android devices because most of the Android devices are of poor quality and cheap. So people are not installing too many apps on their Android phones.”

    “In terms of usage in the US, they say that Apple and Android have very similar usage patterns, but Android delivers more users on the apps. Apple delivers more average time spent listening, almost twice the amount of time spent on listening.”

    “I talked to a few research companies about this and one of them said that probably because Apple phones are premium, and are likely to be in peoples’ pockets while they are at work and they are more likely to be at work in an office with Wifi. Androids, which are sometimes cheaper and might be used by construction workers or people who are not necessarily in the office and do not have as much access to Wifi.”

    Understanding the listening habits

    “UK listeners tune into radio for roughly three hours per day across all platforms.  I asked three different mobile phone app manufacturers how long people tune into the radio through their mobile phone? One came back and said 12 minutes 46 seconds. Another one came and said its between 12 and 16 minutes and the third one came back and said that it depends and could be anywhere between 14 to 45 minutes.”

    “But when you look at other research for example O2, one of the large mobile companies in the UK, they say that 15 minutes a day is spent listening to music.”

    “It is interesting to know what’s happening in the Indian market now, because it’s exploding with the amount of new commercial licenses, India has been relatively late in getting 3G as well, so what will that do in terms of consumption of media as a whole? India is very different in terms of culture of music and news and everything else.”

    “As I have said earlier, radio has a future in India because 94 per cent of the listeners in Mumbai who tune into radio do on a mobile phone; only 16 per cent is on radio receiver. By the way all of this is FM, and it’s a really very amazing thing.”

    “Absolute Radio published figures for July 2013- they have 232,000 active users that use 

    1,040,000 app sessions per month which means that people are using their mobile phone apps once a week, which probably means 15 minutes a week. Now, we listen to 23 hours of radio a week and 15 minutes of that is through a mobile device and it could be potentially quite expensive for people as well in terms of data and bandwidth. In the UK, 26 TB of radio a month is steamed over mobile.”

    Where are people tuning in on mobile phone?

    “In Germany they call the mobile phone ‘Handy’, I think that’s a brilliant name. In the UK, the European Union and Australia, 70-75 per cent of the listening requests are on Wifi of which 25 per cent is over 3G. That shows where people are actually tuning in.”

    When to advertise Mobile Apps?

    “If you want to know when to advertise your apps – advertise them at the end of the week because most people will install them on a Sunday when they have the time to do that.”  “Here is some research -What do people do with their mobile phones? The first thing that they do is to change the background.  Secondly is click on sponsors and ads, which is really surprising.”

    Here are a few takeaways that I have:

    (1)    The majority of app users are not ‘mobile’ but on Wifi at home or at work.

    (2)    Usage is similar to a spare radio when you don’t have anything better – not a replacement to a radio receiver.

    (3)    Apps may increase audience recall of your brand (because of app on home screen) but unlikely to have a massive effect on audience figures right now. Having your radio station logo is going to do very good things to your audience figures.

    (4)    Advertising on them appears to work; but it simply hides the app. Time to add more to your app than just audio? I think you can earn quite significantly from that.

    (5)     Consumers want FM (and HD and DAB+) chips on their phones because that will save them battery life, save them bandwidth and a variety of other things.

    “Even if we get all this stuff, you also have to remember content, because without the content, we won’t make our audiences smile,” concluded Cridland.

  • ‘TV is the only medium that does not have geographic targeting’ : Amagi Media Labs co-founder Srinivasan K A

    ‘TV is the only medium that does not have geographic targeting’ : Amagi Media Labs co-founder Srinivasan K A

    Geographic targeting of television advertising is a business that is still in a nascent stage in India. Once adopted by various players in the television advertising chain, it has the potential to be a game-changer in the way brands and products are promoted and aired in India. 

    Bangalore headquartered Amagi Media Labs (Amagi) has the advantage of being one of the first players in this space in India. Amongst the Amagi team are investor and board member N S Raghavan, who was one of the co-founders and joint managing director at Infosys, former ZeeEntertainment Enterprises Ltd CEO Pradeep Guha and ex-CEO of Tata Sky Vikram Kaushik as advisors.

    Amongst the three founders at Amagi who run the show are Baskar S who works on strategy, investments and R&D, and Srividhya S who works on engineering and technology deployment.

    In an interview with Indiantelevision.com‘s Tarachand Wanvari, Amagi‘s third co-founder Srinivasan K A. (Srini as he is called by his friends) talks about the company‘s strategy and growth plans.

    Excerpts:

    How does Amagi tap into advertisers who look at geographic targeting?

    We at Amagi make TV advertising smarter. If you look at all the media options available to an advertiser now, except at a language level, TV is the only medium that does not have geographic targeting. We look to strike out that disadvantage for TV by bringing targeted advertising on this medium.

    By rolling out our patent-pending technology infrastructure across the country, we enable different ads to be run in different regions on the exact same ad spot. So a single 30-sec ad spot can have different creatives running in different cities across the country.

     

    So you have a business model that can assist local as well as national advertisers?

    We have two business models. The first is local ads. Purchasing power across the top 100 cities in India is growing dramatically. This has been good for a variety of regional businesses in FMCG, retail, real-estate and education catering to the local population.

    These businesses have the capacity to spend significantly in advertising to build their brand, but are limited by the absence of a viable TV advertising option.

    Advertising on satellite TV is expensive and there is a significant spillage beyond their target geography for these businesses. So a lot of them have stayed away from satellite TV, except in pockets like Chennai, where a viable local option was available.

    Amagi for the first time in the country has brought the option of advertising on satellite TV channels for a specific region at a fraction of the national price. This enables local businesses to build brands that emotionally connect with the local audience and unleashes the power of TV advertising for these businesses in the most cost-effective manner. 

    The second model is Ad Versioning. This business option is specifically targeted at large national advertisers. Ad versioning allows able to play different creatives in different parts of the country on the ad spots that they have already bought from the channel.

    One example could be an advertiser can have different creatives for the same brand in different parts of the country – one with Aamir Khan in the north and Vijay in the south, say during an ad spot in a cricket match.

    Another example could be to have different local promotions and offers on products in different regions which today are entirely done in print as TV is not isolatable by market.

    This is the Holy Grail for advertisers who want to target Internet, but want the reach of TV. Amagi‘s platform enables this for advertisers. 

    Amagi also works with TV channels and operators to enable this option for advertisers.

     

    How have the various players in the equation taken your offering – advertisers, agencies, television channels, MSOs and the cable operators?

    This is a change in the way TV advertising is currently done. Amagi is working with multiple partners in the TV ecosystem to speed up adoption – obviously, anything as dramatic as this option requires time and patience and we are seeing adoption rate accelerating now.

    We believe that this is good for advertisers and the broadcasters – as this brings more advertising monies to TV and improves productivity and effectiveness for the advertiser.

    In the US, local advertising on TV is a $5 billion business, and has been working great for the whole TV ecosystem, and we believe that we can replicate the same success here in India. Like the US, India has a vibrant local economy that has largely been underserved from media availability perspective. We are filling that gap.

    Amagi is bringing in a new set of advertisers at the local level, and a new set of product advertising from larger advertisers which never looked at TV as a viable option. We believe that this a great boon for TV channels as more advertisers and product categories would advertise on their channels, leading to higher yield and revenues. 

    Amagi partners with MSOs who for the first time have the opportunity to participate in sharing advertising revenue.

     

    What is the size of the market for your services? 

    The size of the market comes from two parts: Regional businesses which contribute 40 per cent of print advertising in the country today; and large businesses that see that Amagi platform enables their ad spends to work better and provide 20 per cent-30 per cent effective over their current ad spends. 

    With these two market opportunities combined, the potential for this capability is above Rs 50 billion by 2015. 

     

    ‘Amagi for the first time in the country has brought the option of advertising on satellite TV channels for a specific region at a fraction of the national price‘
    What is driving your growth?

    We are an ad marketplace. We connect right content with right advertisers at the local level. Our growth comes from expansion across geographies, and bringing in a portfolio of TV channels that cater to the needs of local businesses.

    We are currently in 15 cities across the country, including Mumbai and Delhi. We will be in 22 cities in the next 6 months. We believe that will give us the critical mass to bring a compelling bouquet of TV channels to local businesses; we will have established a local TV marketplace across the country.

     

    Could you tell us how your system works and the safeguards from failure and intrusion or misuse or piracy that you have in your system?

    Amagi places ad insertion systems in different cable MSO headends across the country. These systems uniquely and predictably identify the ad spot that is allocated for Amagi, and replaces them with different content in different regions.

    Amagi is a completely automated technology platform and are securely controlled and monitored from a centralised location. So essentially these ad insertion systems cannot be programmed, tampered or intruded at these headends. The only way to programme them to do their activities is from a secure Amagi control server located in Bangalore. So, essentially these boxes have no way to be tampered at the local level. 

    Amagi has been running this technology for the past two years and has done close to half a million seconds of local advertisements across multiple advertisers across the country. 

    Amagi‘s technology is one of the most advanced, robust and comprehensive technologies in the world, where this is the only system that can handle dynamic requirements of sports, news TV channels with their dynamic scheduling needs and abrupt end of ad spots during sports events. We are in discussions with broadcasters outside the country as well, as this need is universal. 

    So this is a mature system with a built-in secure work-flow that guarantees no possibility of any misuse whatsoever.

     

    How strong is competition in the space that you are in?

    Rediff is one company that started earlier than us in trying to address a similar opportunity. I cannot comment on where they are in their lifecycle.

     

    How scalable is Amagi?

    We have a scalable technology platform, large sales force across 15 cities and hundreds of installations across the country, and are exponentially increasing the number of deployments as we speak. More than 230 advertisers have advertised on our platform with close to half a million seconds of advertising. 

    We believe this the future of TV, and would be happy to see more people exploring this opportunity as it will help build a vibrant marketplace.

  • ‘If you don’t innovate, somebody else will take it from you’ : Sir John Hegarty – BBH chairman & worldwide creative director

    ‘If you don’t innovate, somebody else will take it from you’ : Sir John Hegarty – BBH chairman & worldwide creative director

    Sir John Hegarty stands tall in whatever he does. Starting Bartle Bogle Hegarty (BBH), of which he is chairman & worldwide creative director, four years into the run the agency was voted Campaign magazine’s Agency of the Year in 1986. Awards galore have seen been following the man who launched the famous Levis “Live Unbuttoned” campaign. In 2007, Hegarty received a knighthood in the Queen’s birthday honours for services to advertising.

     

    At Goafest 2009, Hegarty explained why recession is the best time to be in advertising as it induces innovation and makes change acceptable.

     

    In an interview with Indiantelevision.com’s Tarachand Wanvari, Hegarty talks about the current status of the advertising industry, the need to address the digital medium and the fantastic future of television as people can now watch it from anywhere.

     

    Excerpts:

    How different are the agencies and clients in India as opposed to those in the Western world?
    People always talk about what’s different, but there are more similarities. You really have to understand the complexities of India, the diversity of its culture. You also have to remember that advertising is about converting people, it’s about unifying people. Great ideas unify people, and that’s what you are looking to do. Music’s done it, painting’s done it, films have done it, why can’t advertising do it?

    Everyone’s speaking about the new media. But is the industry, the client ready for it?
    Yes, everyone’s speaking of the industry not being ready and responding to it. I mean, this is probably the most competitive business you can be in. I can start an agency tomorrow – we just started one. It’s not a difficult thing to start an agency. I think agencies are moving as fast their clients allow them. I think that it’s more often that I found that clients often talk a good digital story, but when it comes to actually doing it, they are rather hesitant. Certainly BBH is responding and so is the industry. We are looking at how we put these things together and how we create a roadmap for our client. I think we are doing as much as we can, but we can only be so far in front.

    Are the agencies ready for the new media – technologically and with manpower skills?
    I still think that it’s a developing market and you are looking at how far ahead are consumers. You can look at Japan, I mean they are tech-mad. They live their lives on the mobile. They are texting each other, which is not the case here in India. You have got to look at the market place and see what is it doing and how is it doing it and then respond to that. I think agencies are by and large doing that in India.

    Audio visual is one of the best forms of communication. What do you think is going to happen next – television episodes, internet access, voice communications on the mobile or a hand held device? Are we ready with the content?
    The first thing that we fundamentally believe is that the world’s going to go mobile. There’s no question. You are going to take your devices with you. You will still want to sit down in front of the television at home, you know three hours of cricket, it’s fantastic, I just love doing it. But you are also going to be taking it with you. Television has got a fantastic future if it realizes that people can now watch television anywhere. Imagine if you had a newspaper etched on stones, you couldn’t carry it with you to read. Television is going to have an ever expanding influence in my view, because people love watching it.

    But are we ready with the content?
    It’s very hard to be ready with the content when the audience is not there yet, when they haven’t got the devices. It’s going to take another five to ten years when we have fantastic devices with great screens that give us actual clarity of picture. I have watched bits of television on an i-Phone. It’s brilliant, and I think it will happen more and more, but it won’t stop me watching TV at home.
    ‘If you just narrowcast, then you are not going to be talking to the expanding market. And in a funny way, people talk about narrowcast. The world actually is going broadcast‘

    People are talking of mobisodes for TV consumption on mobile devices, because one can’t capture facial expressions and fine details on the small screen. Do you think that there is an opportunity to create more mobile-centric television content with which agencies could weave in their ad strategies?
    I think I’d rubbish that. People’s eyes adjust. I have watched a bit of Star Wars on the i-Phone. Of course it’s not the same as watching it on a flat screen television, but, then, that too is not the same as watching it on cinema screen. We are incredibly adaptable and will adjust. You put the device closer to your eyes, so the ratio changes. It’s got to do with entertaining the mind, how you embellish it with sound and visual. We’ll see what people want to watch on the very very small screen and what they want to watch on the big screen.

    Where do you think the industry is headed here in India? I mean during one of panel discussions we had people saying that there is no recession in the industry, despite the fall in ad agencies revenue. Do you think that the industry needs a bigger shock to awaken and realise that they are going down economically?
    I can’t answer that. I think that people are being na?ve if they are saying that there is no recession. There is a recession, a downturn, that is a reality. If they don’t respond to it, they are going to go out of business. As I said before, this is an extremely competitive industry. You don’t need any special training to start an agency, you don’t need any licence. You don’t need a Phd, you just need courage. If you don’t innovate, if you don’t change, if you don’t move forward, somebody else will take it from you. But I think recessions are very good at getting to accept change and that’s what we should be focusing on. I think the advertising industry has a fantastic future.

    Digital has one of the best ways to measure the success of any campaign. For television advertisements, even today people depend on Tam’s peoplemeters which can never give a true reach picture. Yet, marketers are allocating a major chunk of their budgets for conventional media, rather than digital media.
    I consider digital as more than just a medium, it is a whole lifestyle change the way people communicate. I think you have got to be very careful about how you use it. I will quote a little – a very very important quote – ‘A brand isn’t just made by the people who buy it. A brand is also made by the people who know about it.’ That’s a very very important point! That is fundamental to the future. Broadcast – you define broadcast in some sense or another – you won’t convert, you won’t build a fantastic brand. If you just narrowcast, then you are not going to be talking to the expanding market. And in a funny way, people talk about narrowcast. The world actually is going broadcast.
  • ‘We see DT&L exploding over the next few years as an advertising category and a wish category’ : Aditya Tripathi- Discovery lifestyle networks VP

    ‘We see DT&L exploding over the next few years as an advertising category and a wish category’ : Aditya Tripathi- Discovery lifestyle networks VP

    Discovery Travel and Living VP -lifestyle networks Aditya Tripathi was in Bangalore to showcase the channel’s new local show ‘A Matter of Taste’ hosted by television anchor Vir Sanghvi. The show follows Sanghvi as he embarks on on a culinary journey to explore Indian tastes, debunk myths and discover the finest in Indian food and drink.

    Indiantelevision.com’s Tarachand Wanvari caught up with Tripathi to get a lowdown on the localisation plans, the challenges of shooting in India and client customisation.

    Excerpts:

    How would you describe the progress that Discovery has made this year?
    Discovery is growing really well. In the first 13 weeks of this calendar year, we’ve beaten everybody. That’s all English news, all English movies, all English music channels – MTV et al.

    Would this apply to Discovery alone or other channels – Animal Planet and Discovery Travel & Living (DTL)?
    This is Discovery alone. There is not even a comparison with the other channel in our genre (NGC).

    What’s new in the programming line-up on DTL, especially from India?
    The big one is of course A Matter of Taste with Vir Sanghvi. We are working on a couple of other programmes also. There’s one on Indian fashion and style which will come out towards the end of the year.

    Then there’s one based on a hotel (Taj Mahal Hotel in Mumbai) which will go on air by July or so, this year. We have actually gone into a hotel and spent three months there. It covers the hotel, about how a hotel functions. When you go to the reception of a hotel, some pretty girl smiles at you, they give you a room key, you go up, actually there are lots of people working behind the scenes that you don’t see. So how does the hotel function?

    The channel is an international channel and the intention has always been that it will be an international channel with some 15-20 per cent Indian content. The majority of the programming will always come from outside. You are looking at the Indian who wants to see the world, not an insular person who wants to see only content about India.

    And what about the fashion and style show that you mentioned?
    We have already started working on that. We have taken a well known fashion designer and we are working with him on this show. I’ll share the name with you when the show is closer to being completed.

    In this series we are traveling around India and outside the country also. We look at rural fashion, we look at pop art, we look at cheap fashion, it’s not only the high haute couture and the expensive fashion. We are at looking at the Indian style sensibilities across the board. And not only in clothes, in interiors, in hotels, in all kinds of things. It’s a very interesting show, but we have shot only two episodes right now, so we are still working on it.

    Some of the episodes will be location specific, so we’ll look at a part of the country. Other episodes will be following a story in preparing for a fashion show.

    How many episodes have you planned for? What about the sponsors for the series?
    It will be a 13-episode series. We’ve not yet lined up sponsors for the moment. We’ll wait till we have a little more polished stuff to show them. We’ve just shot two episodes. The concept has been talked about to a number of people who are interested.

    So is it mainly the garment industry that is interested?
    No, because it’s not only clothes and that kind of fashion. We’ve got interest from car brands, we’ve got interests from mobile phone companies, paints, even those categories. Then jewelry and accessories will also come in.

    Your first local show was ‘The Great Indian Wedding’ where one episode was aired. What is the status on that?
    Depending upon the press you read, we were covering so many things. According to The Times of India, we were covering the Bachchan-Ash wedding also, but that’s not true.

    We have created a brand, but we want to find very special weddings. For a lot of weddings that are special, either the people are not very comfortable to be in the public domain or there are a number of weddings where the people are scared of the tax authorities. And then there are some people who are very conscious of publicity and keen to get it, but it may not be a very classy wedding.

    We are going to keep this as an irregular one-off show. Every time there’s a wedding, we approach the family and if we can shoot, we’ll take it forward from there. But the original plan was to do a series of many weddings, we’ve decided not to do that.

    What are the challenges that you face while making something out of India?
    One challenge that we have is to convince our colleagues in other parts of the world that it will be a good story. Because we see now on Discovery channel, on our own channel DT&L there are now many programmes that are being made out of India. There’s a series like the one by Anthony Bourdain, or any of these international shows, they come and make one or two episodes out of India, but they come with their foreign crew, foreign anchor and cameramen and they come and shoot here and they go back and shoot the rest of the series everywhere.

    We are in the process of convincing them that an Indian production unit can make a show just as well, plus, we make them at a lower cost. The point is that the storytelling will be as good, the production quality will be as good. That’s one of the main challenges that we face.

    Could you shed light on the logistical challenges?
    Shooting a series which is not based in a studio is always a challenge. For instance, each half hour episode of A Matter of Taste has involved seven to eight days of travelling and shooting around different cities, plus the dubbing and editing and other work. For each episode we’ll go to three or four cities. The logistics for that are challenging, but it’s not that they would be any different anywhere else.
    What about your programmes that are focused on communities such as the drinking community – The Thirsty Traveller?
    That is one guy, an anchor called Kevin Brauch who travels around the world, like you have food programs and travel programs, his program is to explore the drinking culture and the different local beverages. That’s a show that has been very popular.

    Is anything coming out of India on those lines?
    There was talk that they would come to India. I was in touch with the production company and there was a little problem with getting permission. So we are now working with them to try and get an episode out of India.

    Won’t there be conflict with the authorities on that? After all alcoholic drinks are products that you can’t even advertise about in India?
    Well, all that we have heard so far is that they had permission problems. We are not sure what they are. We are working with them to find out.

    What is the situation as far as advertising is concerned?
    Of the English entertainment channels including movies, we have sold more inventory, more secondage than any of the others in the last year. That is movies, Star World, Zee Café…

    But those are a different genres altogether?
    We are the only lifestyle channel. When we launched two and a half years ago, Zoom, Star One VH1 – we were launching at the same time and all four were saying that we are lifestyle. Now I think that all the others have changed their formula.

    Certainly among the advertising community, we are recognised as the only lifestyle channel. But being a single channel in a genre that is not defined by anyone, it’s very difficult to define, so we compare ourselves with English entertainment. Because generally the values of the programming are the same, it’s kind of an unwinding programme that you watch to entertain.
    ‘Depending upon the press you read, we were covering so many things. According to The Times of India, we were covering the Bachchan-Ash wedding also, but that’s not true.‘

    So have your advertiser numbers improved from the 236 brands that you had said sometime ago?
    Yes. The number of brands keep going up. The very interesting thing about the channel is that from the day we launched, actually even before we launched, we said that we’d be an upscale channel and we are trying to fill a niche for the advertiser of upscale products.

    Today, traditionally a lot of advertisers for upscale products are on print. They are not on TV, because most channels are not focused. So we said that we will come in and reach those kinds of advertisers. So Pepsi will not advertise on my channel, but Diet Pepsi will advertise or Crush will advertise. Now Airtel no longer advertises on our channel for their standard connections because they are much more of a mass product, but Blackberry Pearl will come on our channel, Samsung LCD screens will come on our channel. The battle for us is not to get as many advertisers as we can, the battle is to keep that focus.
    To return to the localisation issue how many of the Indian programmes are being broadcast abroad? Where do you get the best response from?
    In Discovery the way this works is that all the shows that we make here are offered to our colleagues and then it’s up to them to buy them. So our last production Indian Rendezvous is there outside the country, in UK, this was a six-episode series and all the six episodes will be there. In the case of A Matter of Taste which is now complete, we’ll be sending it to them. I am confident that this will also air around the world.

    Singapore, which is the whole of Asia region and the UK, these are the places where there is maximum affinity. But I am hoping that going forward the US will also start buying into the programming. Right now it is UK more than the rest of Europe. But now that India is on the top of mind for everyone around the world, I am expecting that our spread will be greater than it is now.
    As far as your international content is concerned and programme blocks, is there anything special happening?
    One show that we are looking forward to is Queer Eye For The Straight Guy which we will introduce later this year. This is a makeover show for men.

    Each episode features a new candidate usually a straight/heterosexual man ready to be culturally transformed. Each candidate prepares for a special event and receives generous guidance from each Fab Five member in their respective categories of expertise. Candidates are prepared for such events as a marriage proposal, a first dinner with a girlfriend’s parents, and a backyard barbecue.

    We have a women’s hour. However our viewership is homogeneous. So we have not focussed on building programme blocks.
    Have you done any further client customisation like you did for HSBC some time ago and what has been the response to such efforts? How effective has customization been for your clients?
    We do a lot of client customisation where we package programs. We had a Monday to Friday programme Off to the Caribbean with Pepsi Gold around the World Cup time. What we do is to pick up a selection of programmes.

    A few weeks ago we did something for HT Mint, a very upscale targeting was required, so we did a series that we already had for Europe. We packaged that as Mint Money Mantras. With the travel site yatra.scom we did Amazing Yatras.

    That kind of customisation happens all the time. In terms of product integration, we haven’t done that yet, but are looking at doing that as well. In terms of effectiveness the client keeps on coming back for more so obviously it is quite effective for them.
    Who are your repeat clients?
    Pepsi is a repeat client. They have come back on various occasions and we keep getting new clients also. So it’s obviously effective.

    What marketing activities does the channel do to create awareness?
    We don’t do a lot of marketing. Word of mouth has helped us a lot. The fact is that our target audience is tough to reach through the traditional mass media. Having said that, we did put in some ads in newspapers to create awareness about A Matter Of Taste.

    Discovery Lifestyle launched a couple of channels in Malaysia recently. Any plans to bring them into India?
    Not at the moment. While DTH and digital cable are growing this is not immediately on our radar.

    Who are the big advertisers from Bangalore ?
    Yeah, I do, to meet the advertisers. There’s Britannia, then you’ve got ITC here, they are the big ones. Titan, Tanishq, IBM-Lenovo, etc. ING is a big client, Kingfisher Airlines, lot of these are our clients. In the case of the IT software companies, it’s more of a B2B arrangement, so we don’t have these as our clients.

    Could you offer your views on the television scene in India?
    These are exciting times. Well, every time you open a website or a newspaper you see channels being launched left, right and center. Every one is launching channels. You’ve reported that Sun has started a Kids channel.

    So how long do you think these can be sustained?
    I’ve been working with media for a long time now. Even in the mid nineties, people were saying that so many channels are being launched and they won’t be able to sustain, but no high profile channel has really gone down. They are still able to financially keep going. Obviously there is a lot of money following the channels. You know especially when distribution money is not very substantial. Around the world, channels run on distribution money, the subscription route. If that is not substantial, then it’s very difficult.

    Finally where do you see DT&L over the next three years?
    We launched about two and a half years ago to fit into the upscale Indian. We were hoping to create a new category of advertisers. We’ve had success so far in shifting and attracting the TV advertisers. One thing that hasn’t happened yet is that a lot of print only advertisers haven’t yet moved onto TV. That’s one thing that we expect to do a lot on.

    As the economy booms, as more tourists start travelling, we are very well paced and we really see this channel as an advertising category and a wish category exploding over the next few years. I am very proud of what we have done so far. We are ahead of our advertising and revenue targets, but we expect that the next two or three years will really be boom time for us. The operations here are profitable, but we never disclose country specific breakup details.
  • We are confident of achieving a turnover of Rs 4.5 billion in the digital audio video segment by year end : Moon B Shin- LG managing director

    We are confident of achieving a turnover of Rs 4.5 billion in the digital audio video segment by year end : Moon B Shin- LG managing director

    Electronics major LG Electronics India Ltd (LGIL) recently announced their foray and focus on digital audio video products in Bangalore. LG showcased their latest offerings in the USA – the Super Multi Blue– a product they claim as the world’s first dual high definition player.

    LGIL managing director and LG Group president South West Asia Moon B Shin took on the reins of Indian operations in January 2007. A core member of the LG team, Shin is traveling over 100 countries including the Middle East, Africa and India.

    In an exclusive interview with Indiantelevision.com’s Tarachand Wanvari Shin highlights LG’s plans for India, with a special emphasis on the digital audio video segment.

    Excerpts:

    LGIL has a turnover of Rs 82.5 billion. Considering that the audio-video segment is expected to account for just Rs 4.5 billion, how are you planning to push your presence in this category?
    I know that comparatively this is a small amount, but these are the products that we expect good growth from. In the video category, we are placed number one with 26 per cent market share, Phillips is next with 22 per cent share. In audio we are far behind, we are around 13 per cent I think there number one is Sony and number two is Phillips because our presence at the moment is very small and we set the targets and these are the areas that we have to pickup. We have to beat Sony and Phillips. We have really worked very hard, product planning and selling, marketing for the last couple of years. We have come with really very new range of products.

    Phillips and Sony are strong in the cassette and audio tapes analog space. You don’t seem to have launched any products in that category?
    Today we launched MP3, MP4, the portable DVD player, the car audio system – from the lower end segment to the high-end, we have a really full range. That analog tape market is the rural market and is coming down. Our focus is on digital.

    How do your other products stack up against competition?
    Overall in India the presence is quite sound. In consumer electronics and home appliances we are around 28-29 per cent. For GSM this year we are going to sell around five million sets and we are going to reach minimum revenues of US$ 200million from this stream. AV is around US$ 100million. We expect a total revenue of Rs 95 billion or around US$ 2.2 billion, so the 300 million translates to a little less than 15 per cent of our overall revenues.

    How important is India as a market for LG?
    India accounts for around 6 per cent share of the global revenues. India is tremendously important for LG. By 2010, our target is to increase the India share to 10 per cent of LG’s global revenues. Our top management, they really pay attention to this market. The market conditions are very good and the government is very smart, they maintain an open policy, India is a market driven economy. All these things are very positive for us. The corporate attention on this market is really huge. Maybe even more than China.

    LG has a large amount of visibility as far as mass communications are concerned. What are marketing and advertisement spends?
    Every year for above the line and below the line, we spend around US$ 50 million in India. Last year we invested around US$ 46-48 million, this year we plan US$ 50 million. This figure may change because every month we are growing by 20 – 25 per cent. We are on right track.

    So which segment is driving the growth?
    The flat panel display, GSM, computer monitors, and now AV these are driving our growth. And they are also our future growth engines. Maybe PC’s too.

    What is your market share in PC’s?
    Laptops and desktops is around 6 million, and this will grow fast, so at the moment it is very minimal, around 3 per cent. But, we are coming up with good designs and technology so the PC potential is very good. The market size of laptops is area that we have to focus on.
    ‘Flat panel display, GSM, computer monitors, and now AV are driving our growth‘

    Do you have lower end laptops also?
    Yes we do, but we are not going to play in the low-end segment. We are going to really play in the top of the line products.

    What are your forecasts for the next year – your growth targets?
    Every year we have to grow by a minimum of 20 per cent. By all means we have to grow by this percentage. By mobilizing the attention from headquarters, from market surveys and through consultants like McKenzie, maybe work together with them if we feel that we cannot meet the targets.

    What is the proportion of the products that you sell here that are made in India?
    Almost 90 per cent. About 10 per cent we import as finished products or complete business units (CBU). The balance 90 per cent we manufacture and export too. Some are CKD, some completely manufactured in India. The local content varies product wise. But it’s between 50-70 per cent.

    Any plans to expand further here in India?
    Not for the next several years no. In Pune we have a large space at Ranjangaon. I would not say that we have idle capacity, we have other buildings-two as a matter of fact, one is full of operations and the second building is 20 per cent operational. So there is space. We have to invest only in the manufacturing facility. The building and everything else is ready. We have to invest only in the machinery, that we will go on within Pune.

    How long have you been in India and what is your experience here?
    I have been here two years. Over this time, I have travelled a lot, to almost every corner of the country, I have pretty much covered the A and B class towns. I was a real frequent flyer, I wanted to see what is taking place in every corner of India and I could observe and find that the potential in India is really good. I think India is the only country that can fight against China. India will definitely be in the forefront as far as economic growth, or the GDP growth is concerned, it will be neck to neck with China in the next 30 years or so. China is growing very fast, but India is also growing as fast. The potential is there and I am going to communicate with the headquarters about this marketplace and how it is important. My outlook for India is very positive.

    Could you speak about the infrastructure in India?
    I was born in a very tiny town in Korea and I have grown up there. Maybe at times the infrastructure was even worse than it is today in India. So I am really accustomed to the poor infrastructure in the rural areas. For me there’s no problem at all.

    What is your opinion about the skill levels, the knowledge quotient of Indians?
    They are good, they are very fast learners. We used to send people to Korea and train them over there and then bring them here. We sent them to our other subsidiaries to benchmark. Their adaptation is excellent. Skill levels are good. I really appreciate them.
    Any R&D work being done in India for the LG group globally?
    Not much. In India we have only around seven people working on design. They have not yet contribute to the designing for LG globally. We have our own design centers all over the world, in Europe, China, in the United States. We have design centers located in every corner of the world to come up with local design and also to supply global designs.
  • ‘Size of ready to eat market Rs 700 m.’ : Ravi Naware – ITC Foods Division CEO

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

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

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

    Excerpts:

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

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

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

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

    How big is the ready to eat market?

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

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

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

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

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

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

    How are your Pastas doing?

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

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

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

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

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

     

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

     

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

     

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

     

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

     

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

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

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

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

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

     

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

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

    I am very happy and very satisfied with the progress. Of course some things move much faster, some move slower. I think in Sunfeast we have had a very good run so far. Today we’re clearly the number 3 player and there is a very apparent and a visible gap between no. 3 and no. 4. A year ago that gap wasn’t so very visible. Apart from a size of 8 per cent, I think Sunfeast as a brand has acquired a good standing, a good stature in the market and in the consumers mind. And that to me is a prerequisite for building a business. If you are building a branded business, the brand must acquire power, stature and then you can generate the consumer pool from that.
  • ‘Mobiles will be the first introduction to the internet for an awful lot of people’ : Vinton G Serf – Google’s vice president and chief internet evangelist

    ‘Mobiles will be the first introduction to the internet for an awful lot of people’ : Vinton G Serf – Google’s vice president and chief internet evangelist

    Google’s Vice President and Chief Internet Evangelist Vinton G Serf is regarded as one of the fathers of the internet. While in Bangalore, he shared his views, Google’s objectives and the future of the internet, with Indiantelevision.com’s Tarachand Wanvari.

     

    Excerpts:

    IPR issues – You say that Google would like to make information available everywhere globally. Recently a Belgian court passed a ruling against Google over copyright. Google has been accused of dragging its feet in bringing in technology to take care of IP rights and help fight piracy. What does Google propose to do now on this issue?

    First of all, I’d like to point out that Google does not preview the content and we don’t claim any ownership or anything like that. Our intent is to make people aware of content which is already on the network. There are issues arising when someone who pulls copyright material and someone else has put that material improperly on the network. Google is unaware of any of the copyright claims when that information shows up on the net, it was there.

     

    Our package is very much like the package that was established in the US called the Digital Millennium Copyright Act.

    The US DRM is not as good as the framework in the EU.

    Actually, there is some tension in here between the piracy laws and the copyright laws and there is uncertainty as to how that is going to be resolved. The European Commission is trying to figure out how to adapt their intellectual property and content protection laws to match the US DRM laws.

    Google earth has run into several problems with regards to security. Lot of concerns have been raised about sensitive locations being viewed easily. What do you propose to do about this?

    Our policy is that whenever we have an issue arising with the national authorities, we take it away. We do understand their problems, and in fact there are any number of images that have been adapted. But I do need to point out to you that the data that we are using is not ours, typically it is available for free like the Nasa Landsat. Anyone could have access to it, and so removing it from Google Earth does not necessarily solve the problem, because the imagery is there. It’s also commercially accessible, in other words if you wanted that information, particularly if someone deliberately wanted the security overhead in order to mount an attack, if they have a coherent capability to attack, they probably also may have the ability to purchase this information quite independent from Google. So the problem is more complex than taking things out of Google Earth. The problem is that a lot of the overhead imagery is widely accessible. Period.

     

    I actually do not know of the specifics of the issues here in India, I can say that for some US installations we have removed or replaced information with less resolution or in some cases actually wiped out – like the White House for example, you can’t see the roof, it’s simply been covered up digitally. So those are things where actions have been taken.

     

    We face this all the time with regards to content that is indexed in different parts of the world you’ll find governments with different views, usually the Chinese example, the one everyone brings up, but I want to mention that there are other places. For example in France and Germany, it is illegal to profit form Nazi war memorabilia, and so it is considered illegal literally to put up images of these materials. So we have to consciously remove them form the google.de and the google.fr index. We understand that and we try to work with governments.

    The way mobile penetration is going on compared to laptops and desktops, do you see the internet more as a virtual net?

    In some ways yes. I think that we’re going to see expansion in all directions 802.11, Wifi, as opposed to physical networking technology. Lots and lots of mobiles which I think will be the first introduction to the internet for an awful lot of people in the world. Their first opportunity to interact with the internet may be on a mobile device.
    ‘The ability to respond to an individual interaction, and to produce relevant advertising material in these different media is very important for us to consider‘

    As evangelist at Google, is it right for Google to acquire companies like Youtube, etc. Basically your core competency lies in developing search engines, aren’t you moving away from those core competencies?

    I disagree that we are going away from our core competencies. First of all, we acquire a lot of companies, because their technology we think is helpful. It’s true that our primary business is search and we have never lost track of that. But remember what’s driving the company right now is advertising, because advertising is how we pay for everything. And so you have to remember that the core of the business is revenue generation through target advertising. And we are very interested in all the mediums, not just the online internet, which has turned out to be wonderful for us. But that doesn’t mean that the other advertisement mediums should be ignored. They are still quite valuable.

     

    Youtube and Google video are media and so is radio. So we have been experimenting with video advertising, with audio advertising and with print advertising. Using similar kinds of techniques, the thing which is probably the most critical is the ability to produce an intervention in real time as opposed to the traditional thing where you produce a video advertisement which is a part of a television show actually prepared months or weeks ahead. The ability to respond to an individual interaction and to produce relevant advertising material in these different media is very important for us to consider.

    Could you speak on Web 2.0 and Web 3.0?

    I actually think those are two marketing terms and I sort of reject them out of hand as being overly simple. I do think however that the web as we know it with xml and html and so on has created an infrastructure layer on top of which you can now do things and so to the extent that there is a Web 2.0, maybe it uses web services and Service Oriented Architecture, it’s still very nascent, still very infantile. Long ways to go before we see it grabbing hold. I even chatted with Infosys this morning abut that and we have a similar view that it is still very much in its infancy.

     

    But, the concept is very compelling that you could standardize interaction. I hope we do it right this time. We tried once before in 1980, we called it the Webtronic Data Interchange and it didn’t work out because it was too vertical. So I sort of don’t like the terms Web 2.0 and Web 3.0., the thought behind them is standardizing of exchanges creating a layer of infrastructure that everyone can use and build on.

    How much is your India R & D center involved in solving these issues and challenges?

    In very obvious terms, we have a large number of Indian researchers and engineers at Google working very hard on many of these problems. So it’s a direct contribution at least to Google.