Author: mxmadmin

 

 

The writing was on the wall the day Anuj Gandhi joined Network 18 in March this year to oversee the group’s distribution and new business development. And the reason for this was the all-new relationship between Network 18-TV 18 and Reliance Industries forged a few months before his joining.

 

Other than the providing of the much-needed funds and the consequent stake in one of India’s largest (and more powerful) media conglomerates, Reliance was also looking at making full use of the content produced and owned by the various Network18 and Television18 arms, especially for the Reliance 4G services.

 

Also, in the post-digitization era, distribution becomes a key driver in the revenues of a broadcaster, especially for niche channels. And with various mobile devices becoming popular and wireless technology progressing rapidly from 2G to 4G even in India, the monetization potential for multimedia content leapfrogs.

 

Enter IndiaCast, a joint venture of TV18 and Viacom18 to create India’s first multi-platform ‘Content Asset Monetization’ entity.

 

IndiaCast Group CEO Anuj Gandhi is a veteran in the distribution and the affiliate sales front. An MBA from the SP Jain Insitute of Management, he has worked with Discovery Communications as Director – Affiliate Sales (1997-2002),  as President of SET Discovery (2002-07) and CEO of DEN Networks (2007-2010) and worked as an independent consultant for a little over a year. He has also worked with IndusInd Media in distribution (way back in 1994) and prior to that with Ranbaxy. Clearly, being an early leader in every aspect of the distribution business, Mr Gandhi is well-poised to monetize the wide variety of content that IndiaCast has in its basket.

 

Hours after announcing IndiaCast, Anuj Gandhi spoke with MxMIndia, his first and until the time of publishing only detailed interview on the shape of things to come.

 

So we see the the birth of a laaarge distribution company…

IndiaCast is much larger than other traditional distribution companies because it entails monetizing content assets of all the groups – right now TV18 and Viacom18, and post-acquisition of Eenadu, but for all rights. It’s effectively all non ad-sales kind of monetization businesses. It will be online, traditional brick-and-mortar distribution businesses at a global level. So it is pretty huge.

 

It’s just the beginning. My sense is that most people will do it because the lines are diffusing between various rights that people use in the market. It has already happened in the international market where a DTH guy blocks Over The Top (OTT) or IPTV rights from you and vice versa. So you will have technologies where OTT rights will sit on a box so the cable guy will come and tell you that I not only want to do cable rights but I also want OTT rights. Thus, with the passage of time, new media will get merged with traditional media and we want to be at the forefront of the revolution which will happen in the next few months/years.

 

 

Any international tie-ups in the offing?

We already have international updations in the US, UK and Dubai. Colors is being distributed there and going forward, we want to expand our portfolio. We plan to distribute more and more channels internationally. So it’s work-in-progress on that front.

 

So what happens to Sun18 now that IndiaCast has been formed?

Sun18 was an alliance that worked very well and will continue to do well. The deal at Sun18 was that we will distribute Sun and Disney channels in Hindi-Speaking Markets  (HSM) and they will distribute us in the South. So, the only change in the whole alliance is that instead of distributing in the whole of South, they will only do Tamil Nadu now. Otherwise everything stays the same, we still distribute them in the North and also Disney which is part of their network. With this, Sun18 North has kind of folded into IndiaCast.

 

Is it a coincidence that IndiaCast happened days before the scheduled digitization in the metros or was it on the cards for a while?

No it was in the pipeline and we were talking about it for a while now and we knew that we needed to get all our pieces in order.

 

Any major challenges you see coming up in the future?

I think the major challenge would be to get the deal right for digitization. Whether it happens in 25 or 90 days (as digitization in the four metros is likely to get delayed by a few months), this is a chance where the industry needs to correct itself; we all need to work in getting the ARPU situation right in this country. So the challenges are basically at the industry level. Also, on the global front, the challenge is to be able to do more channel launches in international markets and be seen as a serious player. Also, one more challenge will be about how new media unfolds in the country.

 

With viewers being able to subscribe to channels a la carte, do you anticipate reach/visibility of channels to take a beating… for instance, what if a person just takes one or two channels a la carte?

While there will be some percentage of the market that will opt for it because by law you have to offer it. Like when CAS started, everyone talked about a la carte and people taking only one or two channels, but it just doesn’t happen. It doesn’t happen anywhere in the world and it won’t happen inIndiatoo. There may be a few people who would want that but that would be a single-digit percentage for me. So I am not too worried about it. But what will happen is, as they say, the time spent on niche channels will go up with digitization as everybody will be getting the same quality of channels. But if you start picking and chasing packages, some channels will start suffering. Not everybody is going to take all Hindi news channels, for example. So if they are in the same package, then people may pick them but if they are placed differently then it may not be the case. So some impact will happen, but not in the short term.

 

We see that IndiaCast will also represent Sun and Disney in HSMs. Any others on the anvil? Since UTV channels are now part of Disney, will they move too?

Nothing right now, I think we already have too much on our table right now. If something happens tomorrow, we do not know but we are not looking at adding anything new as yet.

 

As part of Network 18/Television 18 agreement with the Reliance Industries Ltd’s Independent Media Trust stake, there was also a plan of all Network 18/Television 18 content being syndicated to Reliance 4G? Will it be done via IndiaCast?

I won’t be able to comment on this but as is known, all content monetization businesses lies with IndiaCast so the same businesses will be done with any 4G networks whether it is from Reliance or any other telco from the business.

 

So going back to the earlier discussion, the arrangement with Sun18 stays…

Yes, we have just changed the definition in terms of the three states in the south. Otherwise it remains where it was. So Sun18 continues to exist and holds up in IndiaCast. It won’t be called Sun18 anymore. There is no shareholding changing – Sun18 North is just folding up into IndiaCast.

 

Do you see consolidation gaining prominence as we move ahead?

I think it will happen for some time. What way and form – will now change as technology is becoming a critical part of our business. The traditional mergers may not happen as much but there has been a lot of M&A happening on the platform side which will also have an impact on broadcasting.

 

With digitization happening, do you anticipate the revenue from non-advertising sources will actually be more than what comes from advertising?

I cannot generalise it and will depend on channel to channel. But will certainly grow; I feel that it could be 50-50 at the network level. So niche channels will benefit more from subscription than ad sales but mass channels will still earn revenues from ad sales.

 

So just as it holds true for the sales folk these days, do you see the distribution team also have much say in content in the future?

I wish my bosses here say that distribution guy must have a say in content (laughs). But it’s not that now. Until now the interaction with the consumer was through various means and the stakeholders were too many in the value chain. Going forward, because it will be a box and be kind of a direct deal – so if I am going to an MSO, he can probably tell me area specific complaints – it will reach back to the content owners much faster and in much clearer terms than what is happening today. That is what is happening in international markets and it will start happening inIndiatoo. But we are a couple of years away from that.

 

So we’ll soon have distribution heads becoming CEOs of networks…

Touche.