1. Television still rules when it comes to monetisation: Sudhanshu Vats Group CEO, Viacom18

Television still rules when it comes to monetisation: Sudhanshu Vats Group CEO, Viacom18

Broadcasting company Viacom18, known best for its Hindi general entertainment channel (GEC) Colors, earlier this month announced its plans to launch English GEC Colors Infinity...

Updated: July 14, 2015 10:13 AM
sudhanshu vats viacom 18

Television pie in India, but sports is not high on our agenda: Sudhanshu Vats, Group CEO, Viacom18. (Express photo by Amit Chakravarty)

Face Off: Sudhanshu Vats, Group CEO, Viacom18: Broadcasting company Viacom18, known best for its Hindi general entertainment channel (GEC) Colors, earlier this month announced its plans to launch English GEC Colors Infinity (in standard and high definition). Viacom18 is perhaps the last among the big networks to enter the English GEC space, though it has English comedy channel Comedy Central and English music channel VH1. In the last three years, Sudhanshu Vats, Group CEO of Viacom18 has successfully steered the group into a profitable growth phase while expanding the channel network, driving content-led cinema and entering experiential entertainment through live events. Today the Viacom 18 network has a presence in almost every genre except for sports.

While it has MTV and MTV Indies in the youth and music space, it has Nick in the kids’ genre in as many as five languages, action, adventure and animated channel Sonic targeted at boys, Nick Junior for pre-school kids and Teen Nick broadcast post 7 pm, and tailored to teenagers’ interests, besides a second Hindi GEC Rishtey. In March this year, Viacom18 said that it is extending Colors brand, to the five regional ETV channels it had taken over in 2012.

As Vats says, the network has divided the 1.2 billion Indian audience into segments in such a way that it has an offering for everyone. However, the group has studiously avoided getting into the sports genre. In this interview with FE Brandwagon’s Anushree Chandran, Vatsexplains why sports is not high on its agenda, the network’s digital plans and the launch of English general entertainment channel Colors Infinity. Edited excerpts:

Why did you decide to launch Colors Infinity when you had Comedy Central and VH1?

Colors Infinity is curated with content from big names such as content partners Warner Bros, International Television Distribution, NBC Universal, Sony Pictures Television, Twentieth Century Fox, Lionsgate, MGM, BBC and Endemol Shine. There are many English channels in India, but the fact is that there is a much wider audience out there in towns outside of metros that should and could be consuming English content. They haven’t been invited to consume international entertainment. We aspire to make the pie bigger. Our content is the most contemporary. This kind of contemporary content is not being shown in India. In the last few years, the production quality has been dialed up by a few notches globally. This is the sort of content that one would enjoy in high definition. This genre is worth close to Rs1000 crore, and seeing 15-17% growth annually. While we do have channels such as Comedy Central and VH1, these are all segmented offerings. We wanted an English general entertainment offering in our portfolio.

Viacom18 has been around for seven years, but Star India still has a vice-like grip on the market. Do you plan to enter the sports genre and take Star head on?

We are leaders in many of the genres that we operate in. In general entertainment, Colors is a strong number two.

There are weeks when Colors has leadership in prime time bands. In the English genre, both VH1 and Comedy Central are in the top three. MTV is an iconic brand in youth and music. Post the Colors rebranding of ETV Kannada, we are already number one. We are a house of leading brands. But how we operate and what segments of audience are important to us—that is our choice.

Sports is a high gestation and high investment genre. India—unlike many other countries—is not a sporting nation.

There is a lot of pioneering work which needs to be done. We have a list of priorities to grow the television pie in India, but sports is not high on our agenda.

Star Network has been pushing its mobile application Hotstar in a big way. Isn’t Viacom18 falling behind?

The future for content is definitely digital and no one is disputing that. Therefore, we are also gearing up for our digital play and you will see some action very soon. I wouldn’t say that we have had a slow start on digital in India.

Before we launch into anything, we need to examine the market dynamics. Though digital is the platform of the future, the fact is that it cannot be greatly monetised as a platform in India. The big monetize-able platform for content is television. In the short term to medium term—it is likely to stay that way. But should we be future-ready? Absolutely.

What is the future for subscription-only models?

In India, the time is not right for a purely subscription based channel or a premium priced channel. It is an advertisement driven market.

In India, the time is not right for a purely subscription based channel or a premium priced channel. It is an advertisement driven market. For any purely subscription driven channel, the subscriber base would be 200,000 -300,000 people. Assuming that you get 30 bucks as a broadcaster, the total would add up to Rs 7 crore a year. How many people can pay R100 for a channel in India? If you look at global markets, subscription levels are very high and hence subscription-only models tend to do well. Both advertising driven and subscription models co-exist. In India, the problem is that the average revenue per user (ARPU) is as low as $4. Compare that with a market like the US where the ARPU is $400. Other Asian countries also have a higher count in the ARPU—they are nearly thrice our count. The big problem here is addressability. Digitisation is not just about a digital signal. It is also about subscriber information, so that we have the ability to understand what kind of consumers are out there and target them with offerings that are customised to their needs. That journey is slow. A lot of the digital growth that is happening in the country is happening because of direct-to-home operators. That side of the business is very systematic.

Would you look to get into newer platforms such as direct to home or radio?

All of us get fascinated by new toys, but we need to examine our core expertise. In seven years, we have grown our topline manifold. We have started making profits now (FY14 and FY15). But this is just the beginning. For instance, there are a lot of opportunities in filmed entertainment. There is room for more solid and profitable growth there as we focus on content led cinema, which is meaningful and yet commercially viable. Margarita With A Straw has done very well for us, and Drishyam will release shortly. In the last two years, we have entered the events space. The experiential space is very important, and to my mind, a futuristic space. We had low turnover there, and we are going to do close to R100 crore this year. There are clear synergies in us trying to do some of these things. And then we have to grow digital as a platform. We cannot afford to be distracted. On mergers and acquisitions—we will continue to examine all spaces for opportunities but there is nothing specific at this point in time. Since we are one of the youngest media companies, there could be new genres that we may want to get into.
Would you also look at producing content than just procuring content from partners?

It’s a good thought and we will certain consider it. As the country matures and we widen our audience base, I think there is definitely opportunity for such programming initiatives.

After rebranding the ETV channels to Colors, have there been any changes in rankings? Also, are the Foreign Investment Promotion Board (FIPB) approvals in place?

We had applied to the Ministry of Information and Broadcasting for the rebranding and we received the clearance.

But at the same time, we are also seeking FIPB approval for investment in Prism, the company which runs these channels. We put a lot of effort into the rebranding. We are now the clear number one channel in Kannada. It is almost twice the size of the second largest channel in Kannada as per ratings by Broadcast Audience Research Council (Barc). We are the number two channel in Marathi. In Gujarati, we are the only ones. We are number three in Bangla—there is more work to be done there.

Has Barc been accepted as a currency?

The Barc ratings have a much better representation of the country than the earlier measurement system. I am clear that it is the currency of the future. Barc will progress to the next phase soon, when they start reporting on rural homes. As far as the network goes—there are a few winners and few losers, but by and large, I am very happy with the data. In the initial phase, for any new measurement currency, there will be some amount of volatility. As the currency settles in, the volatility levels will come down. As far as the industry is concerned, this is the only currency for transaction.

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