‘If anybody can bounce back quickly it is the news channels’

Media veteran Avinash Kaul’s rise in Network18 hierarchy has been swift ever since he joined the organisation in mid-2014. Currently, he is Network18 CEO and AETN18 MD and looks after news and infotainment businesses of the media group.

In an extensive interview, he spoke to TelevisionPost.com’s Ashwin Pinto about the new tariff order (NTO), ad slowdown, challenges in the TV news business and the plans for the infotainment businesses.

Excerpts:

2019 has been challenging due to the NTO and the economic slowdown. On the plus side, there were the elections. How did these factors impact the news channel business?

Since we are a paid platform it has worked out reasonably okay for us. There has been a substantial jump in subscription income. Advertising during the elections was good. The slowdown post that has muted things a bit but I think that overall we should be doing fine.

The NTO did have an impact since we are a paid platform. But eventually things settled down and we corrected ourselves and we are back in the corrected zone. We are back to being the number one network.

TV18’s Q2 revenue for news fell marginally. What is the projection for the fiscal?

I cannot talk about financial numbers but subscription income is growing. The ad revenue benefited from the elections. So we should be fine.

Is the mood in the ad market expected to improve in the second half of the fiscal?

For news channels, the election season is gone. There is only the budget left in the first quarter of next year. The state elections are also mostly done like Maharashtra and Haryana. We are hoping that the economic slump does not stay that deep. We hope that it corrects itself. But to expect that revenue for news will be higher in the second than the first half is a challenge.

This time the state assembly elections have not been that fruitful. It depends on the political scene. This season has been relatively muted compared to five years back. Also, not enough action has happened on the corporate front. So it has been a challenging time.

In this challenging time since news is a low hanging fruit and do you think that the impact on the news genre will be more severe than entertainment?

This is a perspective that you have but I would like to think of news as being a diversified platform. The number of clients who advertise on news channels is far in excess of those who advertise on general entertainment channels.

The spread is across many categories and so if any genre can bounce back it is news. The ticket size is much lesser and the client base is far wider. News advertisers are spread across multiple sectors. News does not heavily depend on one ad category like entertainment does on FMCG. I look at it in an optimistic way. If anybody can bounce back quickly it is the news channels.

But right now most ad categories are not kicking up as much as expected. Financial services, real estate are not keeping too well. The auto sector is undergoing stress. We will have to see what stimulus is provided and if that happens the first thing that they will do is advertise.

Is there scope for growing branded content?

There is a lot of work that keeps happening in this area. This is something that we are still bullish on. We are hopeful that this should come in handy for us.

What targets has Network18 set for itself in terms of market share? What is the game plan to get there?

In terms of market share, we want to be number one in the news segment which we are. To cement that position, each individual channel has to perform better. We are number two in Hindi right now. We have some way to go in English. In most of the Hindi speaking markets, we are either number one or number two. In the South, we have larger challenges as we are number three or number four in some markets. In each of the markets, there is a substantial amount of work and catchup to be done. Eventually, when we become number one everywhere then we should be in a position where it won’t be easy for anybody to come close to us. This is all a work in progress. Initiatives are on-going progress. We constantly look at how to make the business better, improve ratings. We tweak things.

What is your view on TRAI’s consultation paper?

In terms of the consultation paper, there is a view from the regulator that things need to happen in a certain direction. There are various constituents in this ecosystem. Everybody comes and has a conversation. Finally, the decision is left to the regulator on what to do with that. It is a part of the process. There is no right and wrong about it. When the will is there then things happened. The NTO happened just before the elections, the World Cup. Things did move on from there. The industry learns to take things in its stride and move forward. For instance, nobody planned on the economy going South at this point in time.

Why are news channels priced so low under the NTO?

It is a question of competition. There is a level of competition in the entire mix if you see. News has almost 200 channels. Each and every language has 7-10 players. That brings pressure on the pricing. Nothing is impossible short of being free. It is an economic supply and demand situation. Plus there is competition from digital, notifications from platforms like Twitter.

So you do see consolidation happening?

Well if it had to happen it would have. For many years, we have seen 200 news channels. So far we have not seen any consolidation happen. I don’t know what everybody’s game plan is because clearly not everybody is making money. It is up to those individual owners of those channels to decide what to do next. If no significant brands are being built then no significant value will come.

A news channel is mostly as good as its people. If they don’t exist then you do not have anything else. Distribution is not permanent with you. If the brand is not strong then there is no significant value to it. Sometimes a news channel might pop on the ground without a strong brand but then business interest is clearly not paramount in the owner’s mind.

You spoke about the importance of a strong brand and investing in talent is key in that. What has Network18 done in this regard?

Network18 has been in the midst of integrating regional and national operations and there are a lot of activities that we have done. We rebranded ourselves as News18 Network. ETV is not standalone channels. They are branded News18 Network. That all takes time as we are a 6000 person company with 20 news channels. It takes time to ensure culture assimilation, talent pool expansion, figuring out the best structures. It is not something that gets done in a day. Where else would you draw talent from?

We are watched by 70 crore people in a year. It is an iterative process for us to figure out what works. If something does not work then you look for alternatives. It is a work in progress. Yes, we do try to attract and retain the best talent available but for that, we also need to make sure that the workflows are easy so that people do not sit and collide with each other. We want to be the employer of choice for most of the top talent in the country. We are working hard towards it.

Are you looking to add to your network of 20 news channels?

We have all the languages with us. So I don’t think that there is any immediate plan of making any additions to the bouquet.

How does having a network of 20 news channels allow you to leverage talent, technology, and infrastructure in a more optimum manner?

This is what iterative process that I told you about is. So in technology when we pilot it in one place if it succeeds then we pilot it across the organisation. The efficiency and focus on cost is significant. We are looking at getting in efficiencies more and more from a technological perspective. We are also looking at leveraging our talent in multiple directions. A talent should not be resident on one channel but should be spread across a few channels at least. It does enable people to have different experiences. We can get the synergies in place.

What is the time frame for the regional news channels to become profitable?

We have had late launches. Most of the earlier channels are already in profit. For the later launches the gestation period depends on the market and the market position. We are looking at improvement in Marathi, Bengali and the Southern channels. These are the big pockets where there is a significant amount of work to be done so that our channel share and revenue goes up.

How do you reduce gestation losses in the regional news channel business?

It is not an issue of reducing. It is a tradeoff between what you get by reaching the number one position and how much time it takes to get there. It is not dependent on money but on people. You cannot just double the amount of money thrown in and expect to be number one. It does not work like that. It is an iterative process. You get into the market. Then you tweak and change certain things.

You make sure that your distribution is right. You invest in marketing. Once you reach the desired level there is a gestation period for ad sales to catch up. You have to be in the game. You cannot say that you do not have the appetite for this.

From a P&L perspective, is the dependence on advertising a big challenge?

If you have a revenue stream that is largely coming from advertising then you can it as a challenge or an opportunity depending on how you look at it. For us if we were number one everywhere then the glass ceiling is fairly high. This then takes care of profitability. The work for us is to get in the ratings. Our subscription income is not non-existent as is the case with some of our competitors.

Is commoditisation of news where anchors and studio guests shout at each other during primetime a challenge?

It depends on what each channel’s thinking is. It doesn’t necessarily happen everywhere. It depends on what they think the winning formula is. This happens spontaneously. You can have plain vanilla news but audiences prefer some amount of debate. The livelier they are the better is the audience response. What audiences prefer is what they end up getting.

TV news in India is very personality-driven. In that context, how important is it for a channel to have a strong personality to drive a news channel?

Each network has its own strategy. It is probably better to have a team approach rather than individuals. This is far better to manage as an overall ecosystem as we have 20 news channels. This is better than singling out an individual to deliver things.

Where is the whitespace when it comes to news consumption?

Today the news brand is more important than where it gets consumed. It can be short-form or long-form. It can be on TV or on digital or on social media. You have to make sure that your branding and product consistency is across mediums. The branding has to be uniform and your product should not be seen out of context. This is the winning strategy of today. Do not expect people to come to just one platform.

What is your view on the landing page issue?

It should be a level playing field for everybody. It should not be higher for one and lower for another. If it is not there for anybody then there is no problem. There is nothing right or wrong about these things. It needs to be equal for all. Right now there are some who are there and some who are not. It depends on how you see it. How industry bodies see it is an entirely different discussion that is happening in many places.

What is Network18’s strategy to drive digital assets?

We have been working hard in this area and the results have come in. We are now doing extremely well in languages besides English. The ComScore numbers have been excellent.

Do you see scope for the subscription model as far as digital products are concerned?

There is excellent scope as long as you provide a value-added service which is what Moneycontrol Pro does. It has seen good traction. You need a great product that people are willing to pay for. Moneycontrol Pro allows people to look at their finances far more closely. There is value addition. It is not as commoditised as the rest of the news business. There aren’t 200 other players like it. If you offer a differentiated product you will get the returns as long as the product is good.

What is Network18’s strategy to tackle the menace of fake news?

For fake news, people have to be careful about where they consume news. When you see a News18 logo then you know that it cannot be fake. But videos on a platform like WhatsApp do not have a logo. You do not know where the video is coming from. This is the larger menace. Established platforms with established brand names are the way to go.

There is a problem of plenty where you do not know whom to trust. Un-verified videos are floating around the internet. God knows who made them and god knows whose agenda they serve. If it is a brand that you trust then you know that you can rely on the news to be correct. None of the established brands will indulge in paid news. This is where brands will eventually score. They are credible as investments have been made in talent, infrastructure, etc.

What about paid news?

It is not a problem at the larger level. What you hear about is things at a small, grassroots level. We have not encountered these things. Different teams look at branded content and editorial content.

How is the JV with A+E Networks coming along?

It is chugging along fine. We are profitable. The ad scenario is challenging no doubt but we are hoping that it corrects itself. Subscription has shown good growth. FYI TV18 is the number one lifestyle channel in the country though the ad environment is a big challenge for the genre. History TV18 is number two in the country after Discovery. We have moved up significantly from where we were. We have made continued investments. The new season of ‘OMG’ is our latest local show. In 3.5 years we have done six seasons. It does spectacularly well on digital. HistoryTV18’s content is viral in nature.

Is OTT a challenge for lifestyle genre?

No! OTT has more fiction shows and less factual entertainment. That content stays within channels. English entertainment resides on OTT but factual and lifestyle content does not exist there.

What is the localisation strategy going to be for History TV18?

We will do roughly around 25-30 hours of originals content this year. There is no knee jerk reaction to anything including when Discovery Jeet launched. We make sure that the channel stays profitable, the channels keep growing and the shareholders’ interests are protected. We keep in mind viewers interests which reflect in the ratings.

There is a lot of emphasis on religious content for History TV18? Why is that so given that you target 22-35 year olds?

It is not about religion in that sense. It is about things that have a story behind them. We see things through the prism of telling a story. Things are seen from a historical perspective and not necessarily from a religious angle. There is a difference. We have done military which worked well. Now we are doing things on what you might term religion but these things look at interesting content, stories that can be told around them and some things that really stand out. For instance, we did the Ganpati festival.

It lends itself to a great visual story of the beats, the people, and the lakhs of devotees going for visarjans in the ocean. So it is more treatment in that sense. We are doing the Marvels of India, Mysteries of India. We are building different content pillars and seeing which ones resonate well. It is about doing things that fall in the ambit of history. We are fine with experimenting with various facets and finding out which one really stands out for us.

You have a successful home-grown property in ‘OMG! Yeh Mera India’? What are your plans for that show?

We are examining ideas but the economic environment right now is not conducive to starting another local format. We want to have more series on the channel eventually. That is a work in progress. The decision of whether or not to go ahead is based on economics. The decision on which direction to go is based purely on brand. These are the filters. This is not the time to unduly experiment as a series needs a lot of investment. A series needs a stronger commitment than a one off that you can get away with.

A series build up needs substantial investment including in marketing. A stronger economic environment allows you to take risks. With ‘OMG’ it is in its sixth season.

Has FYI TV18 achieved the three year breakeven target?

This year, the environment has not been conducive. Otherwise, it has met our expectations. Almost 60% of the lifestyle genre’s ratings are from FYI TV18. But we only wish that the economic environment was not as punishing for lifestyle. We are hoping that things will improve moving forward so that we can get back to our job of investing in local content. This has not been done this year. If the market corrects then we can invest in interesting, local content. Then FYI can get back on the curve that it had started out on. It can get back to fulfilling the objective that it had started out with. At the end of the day, we run a P&L. We want to stay profitable.

How has FYI TV18 broadened the definition of lifestyle programming?

Before it launched, lifestyle was seen as being about food and travel and people dressed in skimpy clothes. FYI includes other buckets like space, relationships. These expanded the definition of lifestyle. It worked at that point of time.

Do you have OTT plans?

We are having conversations with the Voot (Viacom18’s OTT platform) team. Conversations happen on negotiated terms.

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