Times Network recently had a spate of channel launches and re-launches, in a bid to expand its portfolio. It also saw increased reach and subscription revenues post its split from One Alliance.
Times Network recently had a spate of channel launches and re-launches, in a bid to expand its portfolio. It also saw increased reach and subscription revenues post its split from One Alliance. Having seen a 20-25% growth in FY16, the network aims to grow further with a digital portfolio. In conversation with BrandWagon’s Chandni Mathur, Times Network’s MK Anand lists the challenges and opportunities for the network ahead. Excerpts:
Times Network has seen a lot of action lately. How has the performance of the network been?
I think we have great products and content which stand out in the niches they occupy. We have tried to use the same infrastructure to put out more products. Whether it is MN+, Movies Now HD or Romedy Now HD, we are getting into the HD space without really spending much on content.
Similarly, with MagicBricks Now, we had the people, satellite space and backend, and just had to deal with some distribution costs. But typically, if you spent `100 to launch the first channel, you spend `25 to launch the fourth channel. Each of the launches and re-launches we have done have been correctly accepted.
English news channels do not seem to be making money given the heavy outflow in distribution. Is the category going to be reliant on ad sales for a long time as compared to subscription?
It is hyper-competition which is really the issue and leads people to cut corners. The problem is in either a value perception or hyper-competition which is under bidding each other. If people are crying in this category, they have themselves to blame. We are doing our level best to request people to relook at how they value us, but somewhere a fundamental shift needs to happen and advertisers need to value our viewership in the manner they are valuing some other platforms.
Aren’t pricing and distribution still concern areas for you?
Distribution is an unfortunate situation due to the structure of the market with reference to many cable operators and MSOs, digitisation not fully taking off, and more. We are in a good position because we have the benefit of our English movie channels. If Times Now and ET Now did not have Movies Now and Zoom, they would have withered with distribution. Besides a handful, the other news channels are all over the place and are either FTA or just merely existing. This is sad because they are all spending good money in putting content for consumers who are eventually not paying anything. And if the advertiser is going to pay for you, then you can’t blame the media because they will start cutting corners. Since 2005, this industry has unfortunately remained at the same price, which means on an inflation, the rates go down.
A majority of your channels is part of niche categories which are perhaps still under-indexed. Is ad revenue a problem there?
We have an English entertainment handicap because we don’t have a strong distribution set-up like Zee or Turner. But because of that, we work harder. Last year, our number one position vis-à-vis our number two had almost a 30% margin. We have a 25-30% share for Movies Now every week as opposed to the number two channel which is around 20%. We have used this gap to convince our advertisers to pay a little more. In the last one year, our distribution footprint has gone from 350 head-ends to around 1800 head-ends because of which our reach has gone up. The reach of Movies Now has gone up by 70% year on year and Times Now is up by 45-50% year on year.
There are some key elements still missing from your network like GECs, regional, sports and kids. How do you plan to build a holistic network?
To get to the next level, these channels are required, but I don’t see why we can’t be a `1,000 crore network without a GEC. If I look at a one year plan, I don’t think we are going to be launching a GEC immediately. I have two more licenses and two more transponders so we have our sights set on one or two variations but we have not firmed up a plan yet.In the HD space, we have a three channel bouquet and hope to add two more to it by the end of the year. We are also ready to launch app versions for Zoom, ET Now and MagicBricks Now. With four apps (as the Times Now app already exists) and four websites, there will be eight products in the next six odd months which means we have a proper digital portfolio. The second part is to propagate them, get the viewership and monetisation.
What are the positives and where are the grey areas?
The coming year will see a 20-25% growth. We have been able to get a subscription revenue growth in the range of about 40-50% year on year for two years because the base is smaller. The subscription situation is improving and is a lot better than what it used to be. Since June last year, when we walked out of the distribution deal, we have practically doubled our subscription revenues. Our cost of placement has gone down and though we have four new channels, our carriage fee has gone down by around 15%.
But monetisation is my most primary concern. Product-wise I am very happy with the channels, but monetisation-wise, I think there are a lot of gaps and that is where we need to accelerate to catch up.
You launched an initiative to rope in SMEs as advertisers. How has that worked out and what is the ratio of advertisers on the channel now?
We were able to introduce about 35-40 new advertisers across the country which is a large number because a company like ours operates with about 600-650 advertisers on a stable basis every year. We are now looking at institutionalising that over the next year and creating something that will introduce 100 new advertisers every year across the network. Presently, almost 8-10% of the advertising comes from non-metros and cities excluding Mumbai, Delhi and Bengaluru. Potentially, if we were to have a concerted strategy, we would be able to take it up to 25%, so I am expecting a two-and-a-half times growth from these markets.