It was 2000. Shireen Sethi, Arup Ghosh, Sundeep Misra and Kamal Dixit had spent more than five years together at NDTV. Now they wanted to ‘do something together.’ So they set up a media consulting firm. It started by doing programming work for Doordarshan and Zee, among other channels.
Network1 Media is now on its way to becoming a content syndication powerhouse. It syndicates television news content to 28 major regional news networks. It is the supplier of news content to one of the largest airtime operators in India, to Midday.com and a few other websites. A couple of US-based, India-oriented news networks are now beginning to get their feed from Network1. The list goes on.
The shareholding of the four founder members will soon be, “shared with a clutch of blue chip investors soon. This will help us ramp up infrastructurally,” says Sethi, COO, Network1. By the end of the year, the firm, which refuses to disclose its revenues, will get in another $6-10 million in private equity funding.
How did three journalists and a technical person set up one of the most promising media start-ups? “When we came together, the idea was to raise the bar on setting up a broadcast network in India and overseas,” says Arup Ghosh, CEO, Network1 Media. Ghosh had done over a decade as a print journalist before moving to TV and his forte remains political journalism. Sethi, another print (business) journalist who later became an anchor on NDTV, is the operations person for Network1. Misra is a sports content specialist and Dixit is the CTO.
The four colleagues formed a partnership which got its first big contract from Sahara. They worked closely with Sahara from 2002 to 2004 to set up four news channels for the group – Sahara One, Sahara Mumbai, Sahara MP and Sahara UP. All the partners refer to the experience with affection. They learnt a lot.
Buoyed by the Sahara experience, they formed Network1 Media in 2005. The company started taking on all the other work that had been coming their way from places such as New York, Pakistan, Indonesia, Bangladesh and Kuwait. Some of it was channel launches (STV, Channel7). The other was regular consulting work – cost-cutting exercises, making a business plan, doing a feasibility study, manpower audits and so on.
In June 2010 the quartet realised two big things. One, “the entire business of launching TV channels was one of diminishing returns,” says Ghosh. Every Tom, Dick and Harry was getting a licence and many were simply not interested in building a news channel. For those who came in late, India has 122 news channels, which make about Rs 2,000 crore in ad revenue. It is, in sheer volumes, one of the largest news markets in the world. However, more than half these channels are owned by politicians and real estate barons who are more interested in the influence the channel can wield, not its business potential. More importantly, most of them were simply duplicating costs by having bureaus all across the country.
“The American pattern is to have a few senior people and take a lot of feeds. The people the channels have are experts who know what will work and how to package it,” says Ghosh. In India, as long as capital was flowing in freely, nobody cared about duplicating costs and having lots of bureaus. Then there came the slowdown of 2008. That is when a lot of channels started looking for ways to cut costs by consolidating bureaus and equipment. There emerged, says Ghosh, the need for a blue-chip, content service.
This coincided with another insight. “The regional guys were not happy with what they were getting.” Usually, state- and regional-level channels take national news either from large players based in the big cities of Delhi and Mumbai or from an agency like APTN or Reuters. This is because it is a very expensive proposition to have a bureau and an OB (outside broadcasting) van or studio in a large city to cover, say, parliament in session.
Sethi and Ghosh decided that since content was their forte, they might as well as give syndication a shot. NNIS or Network1 News and Information Syndication was born. It offers everything from basic headlines to special features and news stories for TV news channels, in English. The script is attached to the story and the channels, say a Kanak TV or Asianet, then translate it to the relevant language. The immediate cost-saving, reckons Ghosh, is about 20-25 per cent on operational expenses. Over the long term, it would mean saving 30-40 per cent money, as it reduces the money networks spend capturing, buying or accessing the news videos, says Sethi.
Both Sethi and Ghosh reckon that Network1’s strength lies in its selection of stories. “We know what a news editor will be looking for,” says Sethi. The company now has 115 people across the country in every state capital, besides the 52 people on its rolls.
The next step is taking NNIS onto the mobile and the web. This is where Network1 has run into two challenges. One, as Sethi puts it, text doesn’t sell, unless it is written by an expert. What it is that NNIS can do besides news feeds for mobile companies is a moot point. Here Misra, a sports journalist, believes that a sports-content-based differentiation might help. “India is at the cusp of a revolution in sports news programming. In the next five-to-seven years we are bound to go past cricket,” says he. There is currently no India-specific sports feed coming from the wire agencies such as Reuters. So there will be more work on content differentiation.
Secondly, it requires infrastructure – in servers and equipment – to be a content provider for telecom and online companies. That is where this round of angel investing, due to come in this month, comes in.
The game has moved way beyond ‘doing something’.
