Tag: Thomas Abraham

Sports sponsorship industry grew by over 19% in 2016 in India: ESP

MUMBAI: Numbers don’t lie, and the numbers in the fourth edition of the ‘Sporting Nation in the Making’ India sports sponsorship report speak for themselves. Compiled by ESP Properties- the sports and entertainment programming specialist arm of GroupM, and SportzPower- leading sports portal, the report states that sports sponsorship spending grew by a little over 19%. Spending via sports sponsorship accounted for 11.5% of the Indian AdEx (AdEx numbers from GroupM This Year, Next Year 2016 report) in the Indian market. While media spends contributed to the largest chunk of the pie, followed by ground sponsorship, the total size of sports advertising rose to INR 6400 crore / $941 million, a big jump up from the INR 5363.3 crore / $825 million garnered in 2015.

Apart from an in-depth analysis of on-ground, media spends, team sponsorships, franchises and mobile and social media data, the new report delves deeply into the evolution of technology and its effects on the mainstream digital landscape. Beyond mere number crunching, the report also strives to educate stakeholders on the key developments that could affect their business, offering a roadmap to manoeuvre sponsorships going forward. The major insight of this report is that both Cricket and Non-Cricket held their own trajectory, and together pushed the industry forward. 2016 also seemed like a make-or-break year for some leagues, with some repositioning themselves to garner greater viewership, while others launching with a hungry audience base. Indian Cricket was on a high in 2016, both on the field and off it.

ESP Properties business head Vinit Karnik believes 2017 is definitely going to gain momentum in terms of the previous year’s high and opined, “The report insights are the key to devising more refined viewer engagement. Gone are the days of male dominance in sports viewership. The year’s biggest chunk of spectators came from women and kids. This is ground-breaking data for brands to take that much desired leap of faith and traverse new grounds. Cricket continues to be the poster child for sponsorships, and non-Cricket sports still have a fair leap to make to match revenue. However it is interesting to focus on the mushrooming of a very defined health and fitness consciousness within the country. Young digital India is breaking barriers and creating new records especially when it comes to live feeds. Their smartphones are their all access pass to the “insider world” of sports, sportsmen and their strengths and weaknesses. Sports start-ups are trending and the success achieved by league-based events across multiple sports indicates a strong potential to consume sports other than cricket.”

“Viewership data demographics have been an eye-opener in 2016,” emphasises SportzPower co-founder Thomas Abraham, and continues, “Demonetisation disruptions aside, 2016 was a great year for the industry and this year will be even more so. Team sponsorships may have experienced certain upheavals and newer leagues will change the sporting diaspora even more so this year. However, what remains to be seen is franchise sustenance, endorsement rates and the manner in which technology and data influence these numbers. We expect 2017 to only get bigger, not just on the back of growth from the leagues that are now up and running, but also from new kids on the block that are debuting in the year – Table Tennis being a notable one.” Thus, 2016 proved to be apocalyptic for some leagues that had risen out of the woodworks since 2011-12 and they finally culminated in imminent death

Going forward, a lot is in store for sports in 2017. The first two months have already provided an indication to what promises to be an action packed year for Sportainment. Digital and offline are now two sides of the same coin. Looking forward, ESP Properties and SportzPower expect India’s sports market to grow at a faster pace vis-à-vis the last few years, aided by government policy and an increasing demand for recreational sports.

March 16, 2017
“I may distribute a news channel. I just do not want to run one” : Kunal Dasgupta CEO SET

It’s the festival of lights. And for many the festival of noise courtesy exploding fireworks. In the hope of reducing the number of those belonging to the latter tribe, we, at indiantelevision.com, decided to put a display of firecracker articles for visitors this Diwali. We have had many top journalists reporting, analysing, over the many years of indiantelevision.com’s existence.

The articles we are presenting are representative of some of the best writing on the business of cable and satellite television and media for which we have gained renown. Read on to get a flavour and taste of indiantelevision.com over the years from some of its finest writers. And have a Happy and Safe Diwali!

Written By: Thomas Abraham

Sony Entertainment Television has secured the cable and satellite television rights for all ICC-designated One-Day cricket for the next seven years, which includes the next two World Cups. But with a reported $255 million acquisition tab, SET CEO Kunal Dasgupta has his task cut out to profit from it. At a media briefing last Friday, Sony presented the captain of India’s successful World Cup campaign of 1983, Kapil Dev, as its brand ambassador. Dasgupta talks of this and other issues like conditional access, DTH, uplinking from India to indiantelevision.com’s Thomas Abraham.

What made you plump for Kapil Dev as your brand ambassador?

The point is, just as Amitabh Bachchan is the icon of movies, Kapil Dev is the icon of cricket and we expect Kapil to do for Sony Entertainment what Bachchan did for Star.

There is this huge investment of $255 million that has been pumped into getting the rights to ICC-designated One Day cricket tournaments. Recovering that is a tough ask any way you look at it. At least as far as the ICC tourney in September and the World Cup next March, are there any programming initiatives that you have in mind?

There are a number of them we have lined up but I don’t want to talk about these initiatives at this juncture.

What about an outline of your overall strategy?

First and foremost, we want to take the game beyond the male and offer it as family entertainment. The programming initiatives that we are working on will take cricket beyond the boundary and get the families in. There will certainly be a focus on women in our plans.

Secondly, we have to generate interest beyond the matches India is playing. And we will have to create devices that provide for that.

And the ICC rights that we have include under-19 cricket tournaments. There is no interest for this now but we will have to generate it.

One way is to make the cricketers more media savvy. They will need to be groomed accordingly so as to give the proper sound bytes at the proper time. Tiger Woods is not just a sporting success story but a marketing one as well and this has been achieved by a great deal of coaching on how he conducts himself.

Now that you have acquired this massive cricket property, have you thought of an IPO. Would this not be a good time to raise funds from the market?
My board doesn’t think so.

“The big question is, will the law make it mandatory to declare the subscriber management systems, which are in the hands of the cable operators? How do you control this is a big worry?”

The big debate currently is around the government’s determination to introduce conditional access systems in the country. What is your stand on this?
Well I would have to see how it is implemented. My principal concern is that there should not be a disruption of services which is something I am sure the government would ensure when CAS is introduced.

The Cable TV Networks (Regulation) Amendment Bill, 2002 is almost certain to get cleared in the next session of Parliament in July. How long do you think the first phase of the rollout in the four metros will take?

It should take about a year or so at the very least, I would think.

What will happen to DTH in this scenario? The whole concept of having tiers means that high-end services can be offered to consumers which would incorporate interactivity and other options like pay-per-view. Would this not make the DTH option a non starter?

The introduction of CAS as is visualised would in fact speed up the entry of DTH. If the customer has any way to invest in a set top to access channels, the quality of service that DTH provides would make it quite a feasible option if the price is right. It should be noted that in India what we are talking about as far as CAS is concerned is an analog service. To digitise, massive investment is needed for cable TV headend upgradation as well as line upgradation. What we are looking at is costs of up to Rs 50,000 crores (Rs 500 billion). At the moment, it is only Reliance that is doing this kind of cabling.

The introduction of CAS would certainly alter the dynamics of the business. What sort of scenarios do you visualise?

Bundling of packages will certainly be there. It will ultimately boil down to who offers the best package. There will be possibilities of a number of currently rival networks like Sony, Star and Zee for instance coming together and offering a shared bundle. India is a unique market. Ultimately, market forces will settle the issue.

What other options are there available to the broadcaster?

One possibility is to supply boxes directly to the consumer. That way we bypass the cable operator altogether by entering into a direct relationship with the consumer.

If you are talking packages, then strong bouquets will still be important. Have you earmarked any candidates for joining “The One Alliance” (what the addition of the Discovery and Animal Planet channels to the Sony Entertainment bouquet of SET, MAX, AXN and CNBC India is called)?
An English movie channel is top of our wish list. Music and niche channels are our other options.

“We will be continuously introducing new shows but they will be short duration series. The days of the long-running serial are numbered”

_________

(Inset) A 1983 file picture of Kapil Dev with the Prudential World Cup trophy.

How many new channels can we expect on the platform by the end of the year?

Ask me on 20 June.

What about a news channel? There is a lot of buzz that a news channel is also on your list.

As long as I am CEO, a news channel will not happen. We do not want to get into issues of editorial management as that would involve taking sides on issues. The issue we have with running a news channel is that we prefer to remain neutral. We have a lot of products that we promote in India besides our channels. There is the movie business, music and electronics goods that we have as well, so that is the position that we are comfortable with.

That is not to say I cannot have a news channel on my platform. I can certainly distribute a channel. I just do not want to run one.

Now that the government has liberalised uplinking, there is talk that broadcasters who uplink abroad will be looking at transferring operations to India so as to bring in new avenues for advertising. Is Sony considering such an option?

Not for the near term at least. If at some later date, we feel there are clear advantages to be derived, then we would have to reassess the situation.

What of programming? Is there anything new happening on Sony?

We will be introducing a new blockbuster series slotted for the weekend prime time. The weekend has been associated with blockbuster movies. Now we are working on a blockbuster series that will run for 39 episodes. With it, we expect to carve out the weekend prime time slot.

Balaji has said it is readying a 39-part weekend series that is going on air within the next two months, slated to run as a one-hour show on Fridays, Saturdays and Sundays. And the talk is that you are doing a big new show with Balaji. Is this that show?
Yes it is.

Still, it is the weekday programming that ultimately decides the success of a channel. What have you lined up for the weekdays?

We will be continuously introducing new shows but they will be short duration series. The days of the long-running serial are numbered.

Do you have any big ticket shows lined up?

One show we are seriously looking at is a game show called Russian Roulette.

From whom are you acquiring the rights?

It is a Columbia Tristar property.

(Russian Roulette, produced by Columbia TriStar Domestic Television [CTDT], is a game of chance where every question could cause a contestant to literally “drop out” of the game and has been a hit in countries as wide apart as Russia and Spain. In this knowledge test, four strangers challenge each other to answer a series of multiple-choice questions. If a contestant answers incorrectly, he must pull the lever potentially triggering one or more “drop zones”. When only one contestant is left standing, that person keeps all of the money won and proceeds to the final round. In the US version, the final winner takes home an additional $100,000.)

What about Shubh Vivaah (Sony’s blockbuster marriage reality show)? When do you see it finally launching?

There is a hearing scheduled for 8 July. After that, we will know for certain.

But I thought the issue was settled. Didn’t the Delhi high court ruling (of 3 March) state that Taal (which went to court over claimed copyright violation) gets a lead time of two months if its own show Swayamvar launches on or before 30 June, otherwise Sony would be free to launch Shubh Vivaah?

Well, Taal went in appeal of that ruling. So the judge has put 8 July as the date for final hearing of the case. Basically, Taal is only employing delaying tactics. In any case, we expect to have the show out in the next few months.

November 10, 2015
Dentsu Aegis appointed as digital agency for Hachette book

MUMBAI: Hachette book publishing India has appointed a digital agency, Isobar, from the Dentsu Aegis Network.

“As a part of our larger commitment to exploring newer ways of reaching our readers we’ve brought Isobar on-board to help us with our social media presence. Isobar’s pitch captured the heart of why books endure and how people connect with books. Their clear understanding of what we need and the enthusiasm of the team assures us that our brand and our books are in good hands,” asserted Hachette India managing director Thomas Abraham.

Isobar India managing director Shamsuddin Jasani added, “We are very happy to be associated with Hachette India, as we are always looking at experiences across different sectors and different types of clients. This win adds a very important category of books and publications to our ever expanding repertoire.”

“We recently instituted a focused business development unit to go after interesting brands. This win is just the beginning of many more to come. Happy to be working with Hachette India, it’s an interesting category and the team is excited to create innovative and creative work for them,” added Isobar India Vice President Gopa Kumar

October 20, 2015
ASN joins hand with SportzPower for South Asian region

MUMBAI: ASN (formerly Asia Sponsorship News) has entered into a strategic business partnership with SportzPower for the South Asian market, which includes Pakistan, Sri Lanka, Bangladesh and India.

ASN is an independent intelligence service for non-traditional media that has been tracking and analysing over 10,000 ‘sponsorship’ deals for almost a decade over a varied fields including sports, branded content, native advertising, movie partnerships and celebrity endorsements.

Shedding light upon what this alliance means for India, ASN founder and CEO Ben Heyhoe Flint says, “Our data shows India as the second biggest market for sponsorship and branded content in Asia, next to China, so our partnership with Sportz Network Pvt Ltd is pivotal in enabling us to get under the skin of this enormous marketplace. With them, we look forward to unlocking even more insights into this seemingly complex trading environment.”

This is backed by the fact that ASN’s India Index, ASN’s tracker of all non-traditional investment in India alone reached $740 million in 2014, representing a 9.2 per cent YoY gain and a 15 per cent share of the entire ASN Index.

Sportz Network co-founder Thomas Abraham stresses upon India’s fast growing sponsorship market and ASN’s potential in the local markets where brands need the right information and analysis to buy, sell or plan their sponsorship activity.

May 9, 2015
GroupM ESP India and SportzPower launch sports sponsorship report 2014

MUMBAI: The sports & entertainment arm of GroupM, GroupM ESP and provider of sports business news and knowledge, SportzPower, have collaborated to bring the most comprehensive report on sports sponsorship.

The study will capture the trends and developments in the Indian Sports Industry from 2008 to 2013. The report for the Indian Sports industry, documents important events during these years including the emergence of league-format sports in India like the Indian Premier League (IPL), Hockey India League (HIL), and Indian Badminton League (IBL) and traces developments in the Indian sports industry when sports business was in its nascent stages.

Elaborating on the future of sports marketing in India, Group M south Asia CEO CVL Srinivas says, “This decade will transformational for Sports in India with a spectator base of over a billio n people, a dozen sports television channels beaming content round the clock and a rapidly growing list of keen corporates and brands waiting to invest in cricket and other alternate sports. The next few years marketing investment in sports will no longer be peripheral, and it will be paralleled with that of entertainment and mainstream cinema.”

The report examined advertising investments in Indian Sport from four angles – On Ground, Team Sponsorship, Athlete Management, and Media Spends, and offers a comprehensive overview of sponsorship in Sport. The key takeaway the study offers is as follows:

·    Spend in Sport in India are dominated by cricket, and within it the Indian Premier League in particular.

·    Sports marketing spends between 2008- 2013 advertising investments in Indian sport rose roughly two fold with a total spend of Rs 21.39 billion in 2008 which rose by 92% to Rs 41.1 billion in 2014.

·    The market is slotted to grow exponentially in the next few years with other sports like Football, Basketball, Distance Running, Golf, Motorsports, Tennis, Hockey, Badminton and Contact sports complementing the Cricket Story since the real opportunity lies in these under-leveraged and monetized areas.

Focusing on the key developments expected in 2014, GroupM ESP national director sports and live events Vinit Karnik says, “Even though the IPL is off to a rough start this year, in the long run accountability, better corporate governance, more transparency, are all good for not just the IPL, but the BCCI too. The successful launch of HIL and IBL has set the stage for an action-packed 2014 as far as franchise-based leagues are concerned in cricket, football, hockey, badminton, tennis, wrestling and kabaddi. The big news of 2014 will be the inaugural edition of the IMG-Reliance-Star co-owned Indian Super League, which is set to bring all the bells and whistles associated with the IPL to football. There is also the commitment that IMG-Reliance, the commercial rights holders for football in the country, to improve the country’s top-tier soccer tournament. The I-League clubs will be hoping that IMG-R walks the talk on that front, though the prevailing sentiment is one of wariness as to what the future holds.”

SportzPowerco-founder Thomas Abraham further discusses the future of sports broadcasting inIndia, “Indian sports TV broadcasting was, is, and will continue to be dominated by Cricket for theforeseeable future, contributing to 80 to 85% of the total television sports media revenues. However, other sports are also gaining prominence, especially Football, though interest remains predominantly for international leagues/tournaments. That is expected as the I-League improves as a television- friendly product and also with the launch of the Indian Super League (ISL) later this year. Other sports such as Badminton and Hockey have also started making their presence felt because of improved performances by Indian players in the international arena, coupled with increased investments flowing into the two sports due to the launch of the Indian Badminton League (IBL) and the Hockey India League (HIL) respectively.”

All in all, 2014 has more upsides than down. While there will be no Indian Grand Prix next year, there will be more leagues, sports like basketball are making rapid strides, and the whole wellness and fitness movement is gaining ever increasing traction, which in turn means more interest in sport as a participation activity and not just as spectator engagement.

March 4, 2014

‘With IPL you have the power of 10’ : Kunal Dasgupta – Set India CEO

The Indian Premier League (IPL) has got off to a solid start. The ratings have been positive and crowds have thronged the stadiums. For Sony the IPL marks their return to cricket. Set India CEO Kunal Dasgupta offers Thomas Abraham and Ashwin Pinto his views on what he expects IPL to do for the game, telecast channel Max, as well as the importance of sustaining the brand.

Excerpts:

As a broadcaster what do you expect?
T20 is a made for television format. When India played a T20 match against Australia at the Wankhede stadium, ratings touched 20. I am looking for a rating of 4 or 5, which is possible, given that ICL, which has retired players, got 2.5. This is a good base for us to take off from.

The format will mean that besides country against country, one will also view it as being team versus team. This is what exists in other sports like soccer, hockey, and baseball.

IPL is being pushed as being the ultimate in reality television. In that case how do you get that competitive environment?
The prize money (Rs 48 million goes to the winner) will ensure this. This is much more than you get for playing for the country and so the players will go all out. The matches will be hard fought. Here all the teams are evenly balanced and so you do not know the result. It will be unpredictable and matches will go down the wire. All teams have a good mix of batsmen, bowlers and youth.

What are you hoping for in the first year as the telecast partner?
Ideally I would want the IPL to be a successful brand that has a long term play. After June, I will continue to do promotions to keep the team brands alive. This was one of the conditions on which we bid.

We will do shows around the IPL. You could see teams (franchises) practicing and discussing strategies for the next season.

‘The trick for us is not getting ratings for the first season. The challenge is to sustain the excitement after that‘

But wouldn’t an ideal situation be for a franchise to build a brand without the big names who might be on national duty?
This might happen. Apart from April-May, you cannot have another period where all the stars are available. What will happen is that once the league is built the new players who are playing will become the core. You can then have matches in different parts of the world to popularise the game there using these new players.

The trick for us is not getting ratings for the first season. This will happen as a matter of course because of the way the IPL has been hyped. The challenge is to sustain the excitement after that and it is here where we will have to take a leaf out of the book of the EPL. Teams have marketed themselves and have thus become iconic brands.

So Mallya for instance, will use the Royal Challenger brand name to go out there and create opportunities for exhibition matches. They can do charity work in Bangalore and build a fan base. Each franchise will have its own website where clips will be available. They can create merchandise.

Sony will pitch in through magazine shows. Otherwise it will just be a flash in the pan. As we come closer to the next season you will see transfers and there will be speculation.

New heroes will be born. It is possible that the likes of current heroes like Glenn McGrath, Kumble, and Saurav will not play beyond two seasons. Once that happens, then the brand will live outside the big names.

One of the aims is to broaden the viewer base is to get in more children, women, But for that you have to create marketing that speaks to those demographics. What is Sony planning?
One of the major attractions will be the presence of big Bollywood stars. Akshay Kumar will perform for Delhi. SRK will perform for Kolkata You will see proper Bollywood entertainment.

We have even tweaked the timings of some of the matches to accommodate our entertainment specials. One match was supposed to start at 4 pm but we have pushed it back to 5:30 pm. We will even have stand up comedy for Extraaa Innings. On air we have gone in for fresh faces. We did not want Mandira (Bedi) for this. She is more suited for ODI cricket. I want 20-year-olds in T20. We also did not want Kapil Dev, Gavaskar. We wanted anchors who represent today’s kids. With the ICC World Cup we broke the mould and brought in females. Now we are breaking the mould back

What is the distribution upside from IPL?
This is a question mark. We are supposed to have a dip but we will retain the same level. There is no minimum guarantee now. Had Ten Sports still been present it would have been difficult to determine the value of IPL. Our team is happy as they are closing deals for the year and it is one of the distribution cornerstones.

At $ 59 million in Year 1 and an average of $ 61 million over five years, IPL was literally sold at floor price. Wasn’t that a great deal?
It was. Most of the payout ($ 612 million) is from the next five years. ESPN’s bid was $150 million for the first five years. They had put in conditions that the top players should be there. We did not put in any conditions.

Anyway, the way it has turned out, all the top players are taking part.

April 28, 2008

‘Working on an umbrella brand strategy is a good way to build a presence in the entertainment space’ : Rajesh Sawhney – Reliance Entertainment President

As 2007 comes to a close, Reliance Entertainment president Rajesh Sawhney is an apt choice for our year-ending interview, not necessarily in the context of what Anil Ambani’s company has done in the broadcast space this year, but because of the expectations from industry, going forward.

On the television front, the journey of being a broadcaster starts next year with the launch of two movie channels (first Hindi and later English), a logical extension from Reliance ADAG’s existing film production and distribution business. The broadcast piece will add to a list that ranges from multiplexes to movies, home video, FM radio, direct-to-home (DTH) and IPTV.

On radio, the aim is to consolidate its position. It will also be active in distribution with its DTH platform coming up. Thomas Abraham and Ashwin Pinto caught up with Sawhney to find out about the plans and the kind of impact that Reliance is looking to have on the entertainment space.

Excerpts:

Firstly, 2007 was the year when Reliance Entertainment sowed the seeds for what is to come. What were the landmarks for this year?
We are a young player only two years old. Our journey into entertainment kicked off with the Adlabs acquisition. Then we moved into radio in 2006. We started rolling it out by the end of last year. Then we moved into other ventures like Zapak, our gaming portal. From my perspective, we are still in the incubation phase and the larger consideration is that the entertainment and media industry is where telecom was five years back. The media industry will be worth $25 billion in five years time. A lot of value creation will happen in the coming five years similar to what was seen in telecom.

The second big thing will be the emergence of digital entertainment. Platforms are now set. This will be a large driver.

The third thing is that with the economy growing at 10 per cent, the Indian consumer is spending more and more on entertainment. The first indication of this is the multiplex boom. Now even monies spent on entertainment at home like DVD rentals, pay per view are growing.

The entertainment industry is worth $ 11-12 billion out of a trillion dollar economy, which means 1 per cent of the economy. Globally it is 3 per cent. In the US, it is 5 per cent. If we take the telecom parallel, revenue is 3-4 per cent. In India it is 2.5 per cent. India has a convergence deficit in this sense. This is where the real opportunity is going forward.

I see Indian players having strengths in certain verticals. Some are strong in print, others in movies while others focus on radio. Nobody is building a comprehensive brand presence across media. This strategy would allow you to capture the three per cent deficit. This is what we are chasing.

What is the kind of impact that Reliance is hoping to have on the entertainment space across the different verticals?
Let us take the movie industry. It is on a huge cusp of change. If you go back 10 years there were no multiplexes, no DVD formats. Home entertainment will be the next value driver for the movie industry in the coming decade. DVD and home entertainment revenues are the biggest source of revenue for Hollywood. Here it is less than 10 per cent. We are going through the first phase which is theatrical revenues. Home entertainment will be the next phase.

For this you need concepts like Big Flicks which will make organised retailing possible. It will make home entertainment delivery through broadband, DTH, IPTV possible. Pay per view revenues will be created for the Indian movie industry. Content in the long tail form across different platforms will offer more choice. The companies who are preparing for this will gain big time as far as the movie industry is concerned.

The second revolution happening in the Indian movie industry is on the content side. So production values have risen. Talent is getting a huge amount of value which is getting aligned to global values. Content will get value from overseas markets, home entertainment, satellite markets. A $10 million movie has become the norm. I can see a situation where $100 million movie is viable but this will take time to happen. You will see Hollywood and Bollywood collaborating more.

How will Reliance benefit from the synergy between Reliance Communication and Reliance Entertainment?
Reliance Communication is building distribution capabilities on mobile, DTH, IPTV and broadband platform. Reliance Entertainment is building a presence and capabilities on the content side across different verticals – content, broadcasting, themed entertainment and new media.

A large part of your plan involves targeting the youth across different verticals. How are you going about this?
We are a youth focussed company. This has a commercial reason. We believe that youth drives entertainment. Youth is driving the movie consumption business. India has the best youth demographic platform in the world. We are the youngest country in the world. We keep youth in mind in whatever we do whether it is radio with Big FM or making movies or Zapak.

‘The government should allow news and current affairs. This is why you do not have talk radio‘

You have taken the brand name Big for your businesses like Big FM, Big Flicks. Is the aim here to convey to the consumer an idea about the size and scale of the brand?
Unlike many companies that work with a house of brands strategy we believe that working on an umbrella brand strategy is a good way to build a presence in the entertainment space. The choice of the name is predicated on three reasons. Firstly it is simple to understand. Everyone, regardless of language, understands Big. The second reason is it is simple to communicate. A mass brand needs to be understood by everyone. And third, the brand name must give people an understanding of the scale at which we want to bring entertainment to consumers.

How important is the broadcasting space for Reliance?
It is very important for us. Our first investment has been in radio with Big FM. We won 145 licenses in 2006. We will take part in the next round of bidding when the government goes ahead. We are the largest radio station in the country with 40 stations. With the execution of radio we have shown a clear commitment by executing the fastest. In Delhi, Bangalore and Mumbai we have emerged as a top player. We have created a leadership position not just by the number of stations but also in the markets where they operate, including those that are entrenched. We want to consolidate our position next year.

Radio needs to differentiate itself instead of just going after the widest lane with popular Hindi songs. Why isn’t this happening?
I do not blame the private players for this. I blame government policy. The government should allow news and current affairs. This is why you do not have talk radio. Multiple stations should be allowed. At the moment only five to six stations are available in the Metros. The government should ensure that 30-40 stations are available. One company can run five channels in a state. The government should introduce policies to facilitate the next growth phase. Niche formats become viable if frequencies are made available at lower rates. Running a Gujarati channel at a license fee of Rs 30 crores (Rs 300 million) does not make sense in Mumbai.

Are you also looking at online radio?
Yes! In the West, radio is a mature industry. Online is a growth industry there. In India FM and online are coming at the same time. The biggest opportunity is in FM. It is hugely underserved India should have 10,000 FM stations. Now there are less than 300 stations. I can run stations in different languages in Mumbai with viability as long as I am allowed to do so. There is also an opportunity to serve the non resident markets.

December 31, 2007

‘Working on an umbrella brand strategy is a good way to build a presence in the entertainment space’

As 2007 comes to a close, Reliance Entertainment president Rajesh Sawhney is an apt choice for our year-ending interview, not necessarily in the context of what Anil Ambani’s company has done in the broadcast space this year, but because of the expectations from industry, going forward.

On the television front, the journey of being a broadcaster starts next year with the launch of two movie channels (first Hindi and later English), a logical extension from Reliance ADAG’s existing film production and distribution business. The broadcast piece will add to a list that ranges from multiplexes to movies, home video, FM radio, direct-to-home (DTH) and IPTV.

On radio, the aim is to consolidate its position. It will also be active in distribution with its DTH platform coming up. Thomas Abraham and Ashwin Pinto caught up with Sawhney to find out about the plans and the kind of impact that Reliance is looking to have on the entertainment space.

Excerpts:

Firstly, 2007 was the year when Reliance Entertainment sowed the seeds for what is to come. What were the landmarks for this year?
We are a young player only two years old. Our journey into entertainment kicked off with the Adlabs acquisition. Then we moved into radio in 2006. We started rolling it out by the end of last year. Then we moved into other ventures like Zapak, our gaming portal. From my perspective, we are still in the incubation phase and the larger consideration is that the entertainment and media industry is where telecom was five years back. The media industry will be worth $25 billion in five years time. A lot of value creation will happen in the coming five years similar to what was seen in telecom.

The second big thing will be the emergence of digital entertainment. Platforms are now set. This will be a large driver.

The third thing is that with the economy growing at 10 per cent, the Indian consumer is spending more and more on entertainment. The first indication of this is the multiplex boom. Now even monies spent on entertainment at home like DVD rentals, pay per view are growing.

The entertainment industry is worth $ 11-12 billion out of a trillion dollar economy, which means 1 per cent of the economy. Globally it is 3 per cent. In the US, it is 5 per cent. If we take the telecom parallel, revenue is 3-4 per cent. In India it is 2.5 per cent. India has a convergence deficit in this sense. This is where the real opportunity is going forward.

I see Indian players having strengths in certain verticals. Some are strong in print, others in movies while others focus on radio. Nobody is building a comprehensive brand presence across media. This strategy would allow you to capture the three per cent deficit. This is what we are chasing.

What is the kind of impact that Reliance is hoping to have on the entertainment space across the different verticals?
Let us take the movie industry. It is on a huge cusp of change. If you go back 10 years there were no multiplexes, no DVD formats. Home entertainment will be the next value driver for the movie industry in the coming decade. DVD and home entertainment revenues are the biggest source of revenue for Hollywood. Here it is less than 10 per cent. We are going through the first phase which is theatrical revenues. Home entertainment will be the next phase.

For this you need concepts like Big Flicks which will make organised retailing possible. It will make home entertainment delivery through broadband, DTH, IPTV possible. Pay per view revenues will be created for the Indian movie industry. Content in the long tail form across different platforms will offer more choice. The companies who are preparing for this will gain big time as far as the movie industry is concerned.

The second revolution happening in the Indian movie industry is on the content side. So production values have risen. Talent is getting a huge amount of value which is getting aligned to global values. Content will get value from overseas markets, home entertainment, satellite markets. A $10 million movie has become the norm. I can see a situation where $100 million movie is viable but this will take time to happen. You will see Hollywood and Bollywood collaborating more.

The government should allow news and current affairs. This is why you do not have talk radio
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How will Reliance benefit from the synergy between Reliance Communication and Reliance Entertainment?
Reliance Communication is building distribution capabilities on mobile, DTH, IPTV and broadband platform. Reliance Entertainment is building a presence and capabilities on the content side across different verticals – content, broadcasting, themed entertainment and new media.

A large part of your plan involves targeting the youth across different verticals. How are you going about this?
We are a youth focussed company. This has a commercial reason. We believe that youth drives entertainment. Youth is driving the movie consumption business. India has the best youth demographic platform in the world. We are the youngest country in the world. We keep youth in mind in whatever we do whether it is radio with Big FM or making movies or Zapak.

You have taken the brand name Big for your businesses like Big FM, Big Flicks. Is the aim here to convey to the consumer an idea about the size and scale of the brand?
Unlike many companies that work with a house of brands strategy we believe that working on an umbrella brand strategy is a good way to build a presence in the entertainment space. The choice of the name is predicated on three reasons. Firstly it is simple to understand. Everyone, regardless of language, understands Big. The second reason is it is simple to communicate. A mass brand needs to be understood by everyone. And third, the brand name must give people an understanding of the scale at which we want to bring entertainment to consumers.

How important is the broadcasting space for Reliance?
It is very important for us. Our first investment has been in radio with Big FM. We won 145 licenses in 2006. We will take part in the next round of bidding when the government goes ahead. We are the largest radio station in the country with 40 stations. With the execution of radio we have shown a clear commitment by executing the fastest. In Delhi, Bangalore and Mumbai we have emerged as a top player. We have created a leadership position not just by the number of stations but also in the markets where they operate, including those that are entrenched. We want to consolidate our position next year.

Radio needs to differentiate itself instead of just going after the widest lane with popular Hindi songs. Why isn’t this happening?
I do not blame the private players for this. I blame government policy. The government should allow news and current affairs. This is why you do not have talk radio. Multiple stations should be allowed. At the moment only five to six stations are available in the Metros. The government should ensure that 30-40 stations are available. One company can run five channels in a state. The government should introduce policies to facilitate the next growth phase. Niche formats become viable if frequencies are made available at lower rates. Running a Gujarati channel at a license fee of Rs 30 crores (Rs 300 million) does not make sense in Mumbai.

Are you also looking at online radio?
Yes! In the West, radio is a mature industry. Online is a growth industry there. In India FM and online are coming at the same time. The biggest opportunity is in FM. It is hugely underserved India should have 10,000 FM stations. Now there are less than 300 stations. I can run stations in different languages in Mumbai with viability as long as I am allowed to do so. There is also an opportunity to serve the non resident markets.

December 30, 2007