Sample this: the cost of a ten second ad spot during prime time—8 pm to 11pm—on NDTV 24×7 is Rs 3000-4000. A 10-second spot at prime time on the dual channel NDTV Profit-prime will set the advertiser back by Rs 2000-3000. And the bill for a 10-second ad spot on the Hindi channel, NDTV India, is Rs 1500-2000. Compared with this, a roadblock—when all ads on the page belong to just one advertiser— on NDTV.com for a day calls for a spend of
Rs 6-7 lakh while a banner on the web page is priced at Rs 150-200 cost per impression (CPM). If, on a day, 1,000 viewers click on a banner, the advertiser must fork out Rs 2,00,000. If you thought digital media is hard to monetise, think again. In FY15, revenues at NDTV Convergence —the digital arm of the NDTV Group—grew 47% to Rs 107 crore, In contrast, pickings from the television business grew 13% to Rs 508 crore.
In a conversation with Anushree Bhattacharyya, Vikram Chandra, ED and Group CEO, NDTV discusses the strategy behind NDTV’s digital success.
NDTV Group forayed into digital in 2000 with the launch of NDTV.com. Which are the key businesses today?
We see two-three crucial businesses. While our television business still remains a very important part of our DNA we are now adding new layers. The most significant layer is digital and digital content under NDTV Convergence. The digital business has grown from being a fraction of our revenues to being a distinct chunk so much so that it’s profitable today. We added the third layer with the launch of our e-commerce portal IndianRoots. Early this year we raised $5 million in a fresh round of funding from KJS Group upping the valuation to $85 million. What’s interesting is that in FY15, the division generated a gross merchandise value (GMV) worth Rs 61 crore and in FY14 it clocked a GMV worth Rs 8 crore. We will continue to build our digital assets by looking for new businesses to roll out as well as ways to monetise them.
How have you been able to grow revenues at NDTV Convergence and the television business?
We have a reasonably close and warm relation with the digital world. It wouldn’t be immodest to say that we have been ahead of the curve especially in some of the areas where we picked up a trend. Technology has been one area where we have ensured that we stay ahead of the curve, right from being the first one to provide news on mobile, start niche content sites such as NDTV Hindi, Cricket, Movies, Food, Tech, Auto and to building a mobile app.
How did you go about creating content for digital?
It is a big mistake to think that the content created for television or print will translate automatically into digital. Digital has its own requirements, right from the way a piece of news is written to the space at which one is required to update, etc. While the focus has always been to create differentiated content, we are now looking at bolstering our niche sites such as food, tech and cricket amongst others. We have observed that the traction of these sites is massive. For example, in terms of traffic, our tech site gets 20 million unique visitors every month, while food gets three million and sports gets five million unique visitors. The ultimate idea is to own a particular community online.
This gives us a powerful position as we can drive and influence the thoughts of consumers about a particular gadget or topic.
Is there any plan to introduce a subscription format, where one may have to pay for premium content in the future?
Compared to countries such as the US and the UK where digital ad spends account for 30-40% of the overall pie, in India digital ad spends occupy only a 3-4% share. Going forward, a massive surge in digital advertising can be expected. While we have a separate team handling the ad sales for NDTV Convergence, there are times when we opt for a joint deal and bundle and sell a few online properties and TV ad spots together. Presently, online advertising revenues are growing at the rate of 40-50% annually. So I have no reason to change the model. However, advertisers are missing the biggest opportunity by not looking at video advertising on platforms like ours. We are streaming close 2-3 billion videos a year. Our live video streams could offer one of the most attractive opportunities for an advertiser.