A Hindi Channel Would Be The Next Logical Step

Chennai: | Updated: Jul 30 2002, 05:30am hrs
The Sun Network is the biggest success story in South Indias television history. One can judge its dominance from the fact that within two years of their launch its main channels in each South Indian language have become the leaders in their respective markets and now control over 60 per cent of the marketshare in all the four Southern states. Now, it is foraying into other areas like FM Radio, High-speed Internet, video-on-demand, etc., aiming to become a complete communications company. At present the Sun Network runs nine satellite TV channels, one cable channel and an MSO (multi-system operator) which is also an ISP. In an interview with eFE, Sun Network chairman and managing director Kalanithi Maran talks about his company as well as satellite TV industry issues. Excerpts:

The introduction of the Cable Amendment Bill in the Rajya Sabha has now been delayed. How do you feel about the proposal to make conditional access system (CAS) mandatory
CAS will reveal the truth about all the pay channels popularity. Though there are a lot of issues to be resolved before the implementation of CAS, I am all for it. The Sun Network has nothing to fear. Our channels occupy the number one slot wherever they are present Sun TV in Tamil Nadu, Gemini in Andhra Pradesh (AP), Udaya in Karnataka and Surya in Kerala both in terms of reach and advertising revenues.

Could you put a finger on the reason for the success
We always work towards keeping our content in sync with the preferences of the people. We have an audience group comprising 100 viewers from a cross-section of the populace, whom we call after every episode of a new serial for their opinion. If any soap/programme gets negative feedback from the majority of these viewers for four consecutive weeks, we just take the programme off air. Also, we stick to working with the best production houses with a proven record.

Further, cinema is the most popular form of entertainment and we own the telecast rights to 80 to 90 per cent of all movies released in the four southern states in the last two years.

When you are doing so well as a free-to-air broadcaster, does your decision to turn your channels into pay channels now, make sense
Well, if subscribers are paying for channels they dont even see, they certainly wouldnt mind paying for what they really like to watch. However, penetration is a more important criteria for us than earning some extra money. If we find our subscriber-base dwindling by even 5 per cent, we will not go ahead with the plan. For the present, we will shortly start test-marketing pay TV in AP, the largest cable and satellite market in the country, before going to other states. However, this will be done after each and every cable operator has our decoder and all other necessary infrastructure is in place.

Where do you go from here. Are you planning more regional language channels
No. We found that Hindi channels do better than local languages in Marathi and Gujarati markets. We even test-marketed a Bengali channel, but found that it was not viable. Therefore, Hindi would be the next logical step, but there are too many players in that space. So, we will wait and watch for the right time and opportunity instead of making the blunder of jumping in recklessly.

What happened to your IPO and acquisition plans
For the IPO the markets are not conducive at present. Also, our internal funds are adequate for now and we prefer to take things a step at a time. As for acquisitions, we were in talks with a few channels, but we dropped these talks as the channels either had very huge liabilities or had very bad libraries.

There are 100 plus channels in the country and more are coming. Is the market growing as fast as the number of channels
No. Most of them will either close down or be taken-over. Ultimately, therewill be only two channels in each region/language.

Why do you think DTH didnt take off
It is very expensive both for the consumer and the operator. Apart from the Rs 10 crore up-front fee, the condition that the operator also share 25 per cent of the revenues with the government doesnt seem to gel. Also, the cap of of 20 per cent on broadcasters stake is ridiculous.

What are the latest technological developments in the industry
Digital compression on transponders, which enables 14 channels to be compressed on one transponder is the biggest development, resulting in huge savings for broadcasters. Also, production has become more non-linear with tapes giving way to hard discs and computers.

Once the Convergence Bill is enacted, it is expected to bring all media of communication under one roof. How do you think the satellite and cable TV industry will be affected by it
There may not be many pure players left be it in the area of satellite and Cable TV, telecom or Internet after the Convergence Bill is passed. Media companies are likely to get into telecom and vice-versa, either through mergers and acquisitions or via expansions. Also, since separate licences wont be required for different types of communication, they could all be put into one pipe. However, passing the bill alone wont make this happen. For real convergence to take place, there has to be a ready network on the ground, connecting every nook and corner of the country. And that could take anywhere between 5 and 10 years.