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“M&E space will see consolidation in the near future”
The calm yet aggressively practical Singh first brought a new hand at flagship channel Sony Entertainment Television (SET) by roping in Nachiket Pantvaidya. He then followed it up by bringing Ajay Bhalwankar from rival Zee TV as SET’s chief creative director.
Singh turned his attention to sports channel Sony Six. He acquired key properties like the Fifa World Cup 2014–2018, Uefa Euro 2016 and Australian Open (Tennis) to complement MSM’s cash cow, the Indian Premier League (IPL).
Ready to power MSM’s new growth areas, Singh launched a second movie channel Max2 and Pix HD.
He is gunning for more. Next on the anvil is a third Hindi general entertainment channel. The MSM head honcho also stated that there might be a second sports channel from the group if the company manages to pocket more live telecast rights.
The network is poised for inorganic as well as organic growth. Singh revealed that the talks with Maa Television Network have been revived. He also said that digitisation and the 12-minute ad cap will lead to consolidation in the M&E sector.
In an interview with TelevisionPost.com’s Sibabrata Das, Singh talks about his revival plans for the flagship channel SET, sports rights, strategic importance of Fifa rights for the network and the company’s growth strategy for the Indian market.
Q. MSM runs a profitable business with a limited band of quality channels. Will we see this strategy being followed or the company will decide to aggressively widen its bouquet of channels under your rule?
We will continue the way we did in the past—build quality television channels and robust businesses. We are not going to run after a width of channels just for posting top line growth. Profitable growth will continue to be our focus.
Q. We have had digitisation, ad cap regulation and a framework that dilutes the earlier role of content aggregators. Isn’t the marketplace demanding a lot more aggression from the bigger networks in terms of channel launches?
We are not averse to launching new channels. We have launched Max 2 [second Hindi movie channel] and are planning to launch a third GEC [alongside Sony and SAB] this fiscal. If we are able to acquire rights to more live sports properties, we may launch a second sports channel to complement Six, if required. We are growing the network both through channels and digital offerings.
Q. Will the new GEC be positioned to address the LC1 markets where Sony’s programming currently has less appeal?
I am not yet ready to talk about the upcoming channel. But our shows on the existing channels travel beyond viewer TGs and have a mass appeal across all markets. In fact, we have the longest-running popular shows in India like ‘CID’, ‘FIR’ and ‘Tarak Mehta Ka Ooltah Chashma’, which cut across viewer segments. The new channel will complement the positioning and viewership of Sony and SAB.
Q. Fast-growing regional markets are becoming important for bigger networks to conquer. Has MSM been slow on merger and acquisition (M&A) activities to grow particularly in the Southern markets?
We haven’t missed any big M&A opportunity. We did throw our hat in the ring for acquisition of some regional networks but couldn’t conclude the deals for reasons I can’t state publicly. At a more generic level, we did acquire SAB for the Hindi-speaking market (HSM) and Aath for the Bengali market.
Q. The industry did see a spate of acquisitions like Asianet and Ten Sports. Weren’t they worth the price?
I wouldn’t like to comment on other’s acquisitions. For us, SAB has really worked well and it is now established as a very strong light-hearted family entertainment channel.
Q. MSM had inked an agreement to acquire 30 per cent stake in Hyderabad-based Maa Television Network two years back. Since the amount of stake to be acquired was announced, it is safe to assume that the acquisition price was fixed. Why is the deal taking so long to conclude or is it called off?
There were certain issues that were beyond our control, but the talks have revived.
Q. If the deal is consummated, will Maa Television Network, which runs a clutch of Telugu channels, be a springboard for launches in the other Southern-language markets? Or will Maa Television Network be confined to that single regional-language market like Sony Aath and you will individually weigh opportunities in other Southern languages?
All that I can say at this stage is that we continue to be interested in making inroads into regional markets. We are evaluating opportunities, both organic and inorganic. Currently, our regional investment is limited to Sony Aath.
Q. Will the industry see more M&As after the entry of Reliance Industries into the media and entertainment space?
We will see consolidation in the M&E space sometime in the near future. This could happen in multiple markets or genres. Digitisation in its true sense and ad cap regulation could trigger consolidation.
Q. Is there a need to change MSM’s strategy against this backdrop?
There is no need for a change in strategy. We will continue to focus on key areas of our business. My single biggest priority is to turn around our flagship channel Sony and grow its viewership so that it is in the top three channels in the Hindi GEC genre. Under the leadership of a new channel management team, with Nachiket Pantvaidya as senior EVP and business head of Sony, and Ajay Bhalwankar as chief creative director, we are revamping the content line-up and scheduling strategy. ‘Entertainment Ke Liye Kuch Bhi Karega’ and ‘Encounter’ have got in new viewers for us and viewership of the channel has gone up by 20 per cent in the last two months.
We are launching ‘Yudh’, our next marquee show where Indian film industry’s mega star Amitabh Bachchan is playing the role of a lead protagonist. There are six other shows under production which will be launched in a phased manner. In addition, we are preparing to launch another season of ‘Kaun Banega Crorepati’ (KBC) with new innovations.
Q. Was revamping the loyal franchise properties like ‘CID’ and ‘Crime Patrol’ the first task?
We are re-energising these properties. ‘CID’ and ‘Crime Patrol’ have moved from being twice to three times a week. They continue to work well for us.
Q. Has MSM seen a dip in revenue for FY14 due to the slump in viewership of Sony?
Our dependence on any one channel has reduced over a period of time. Other channels and businesses in the network are doing very well. SAB has a very strong and loyal viewer base, and Max, Mix and AXN are leaders in their respective genres. Pix and Six are also very strong channels and are either No. 1 or 2 in their respective genres. Digital revenues are also growing strongly for us through Sony LIV and LIV Sports.
Domestic and international distribution businesses are showing strong growth and so are our ad sales. We have also made investments in marquee sports properties which got us strong viewership. The ongoing Football World Cup is getting us strong traction on Six as well as Aath. So, collectively, all our channels and businesses help us achieve our revenue and profit growth.
“We are not averse to launching new channels. We have launched Max 2 and are planning to launch a third GEC this fiscal. If we are able to acquire rights to more live sports properties, we may launch a second sports channel to complement Six”
Q. MSM has earlier strategically used the cricket World Cup to boost the network. Will the soccer World Cup be used similarly?
All marquee properties we acquire or produce help us achieve strong viewership for the network and so will Fifa. It will further strengthen our sports channel Six. We also expect the reach of Sony Aath to get a boost. For the first time, a channel will show the World Cup with Bangla-language commentary. On the back of Fifa World Cup, we will launch new content on Sony Aath.
Q. The IPL is the most valuable sports property in India today. With Star getting aggressive and the possibility of RIL bidding for it, will protecting the IPL rights get expensive? Does MSM have the last look to match the highest bid for the IPL rights?
We have three more seasons to go. It is too early to talk about the renewal of the IPL. It is a very strong property and the final match of Season 7 achieved a TVR of 8.7 this year. The IPL reached out to over 190 million viewers this season, which is significant considering that we had a prolonged period of general elections this year.
Q. Do you think that there is a huge mismatch between the revenues and the rights fees?
The rights fees have ballooned over the last few years. In some cases, they have become economically unviable and we have stayed away from them. Even in cricket, in many cases revenue is not keeping pace with the rights fees. This is putting pressure on the sports networks.
Q. Why then is MSM interested in launching a second sports channel?
Sports is an important part of our network strategy. It is a huge opportunity to attract youth to our network. We have made strategic investments in sports properties for youth connect. We are showing the IPL, NBA, UFC, Australian Open, TNA Wrestling, Uefa Euro 2016 and Fifa World Cup. Youth engage with football in a big way. We also tap youth through digital and social media.
The rights that we have are enough for Six. Right now, launching a new sports channel is not on the horizon. If and when we acquire more sports rights in future, we will consider launching a second sports channel.
Q. Haven’t the movie acquisition costs also gone up abnormally high?
Movie acquisition costs have gone through the roof. It is imperative that costs come down for businesses to be economically viable.
Q. MSM has identified new areas of growth like movie production. What has been the progress there?
We are doing it under MSM Motion Pictures. We are starting with co-productions and have released a couple of movies.