Viacom18, the joint venture between Viacom Inc TV18 and TV 18, roped in Sudhanshu Vats, a Hindustan Unilever veteran, as group CEO in August. In his first media interaction, Vats talks about how digitization is a win-win for everybody. Excerpts from an interview with Gaurav Laghate
Distribution is still a major challenge. What are you doing about it?
Media in India is a young industry, and we at Viacom18 are just five years old. The biggest challenge is subscription revenue, specially for a new entrant like us. Out of an estimated Rs 30,000 crore subscription revenue, broadcasters only get close to Rs 3,000-4,000 crore. We see a lot of opportunity in digitisation. It will be a win for everybody. In our case, it will lower our dependence on ad revenues. What we are also looking at is adding more revenue streams. There are digital, live events, consumer products. But for that, we have to get an integrated measurement system.
Are you looking at launching more channels?
We are looking at segmentation on demographic as well as psycho-graphic level to build a sharp focus. We have to customise our products as per the needs of our viewers. For instance, today we launched Nick Jr. for pre-schoolers. Now we have three different channels within the kids genre. Similarly, last year we launched Comedy Central, a channel sharply focused on humour.
Why did you put on hold the launch of a Hindi movie channel?
The Hindi movie genre is a big market where all players are already present. But, is there a differentiation? We took the call that the time is not right for us to launch a movie channel. But we do cater to consumers’ need for movies. We show movies on Colors on weekends.
We first need to develop a strong business case for launching a channel.
After the Network18-ETV deal, will the regional entertainment channels come under Viacom18?
It is premature for me to comment on that. However, it is part of our strategy to drive segmentation - in this case geographic and language segmentation for GECs.
Colors is perceived as a high-cost operation. Last year, it saw a dip in ratings and at one point fell to number four, though it is back at number two. How do you see the GEC game?
Colors is a profitable channel. While it is a high-cost channel, we also produce high-quality shows and so our ability to monetise the content is better. Though it’s true that we slowed down last year, the good news is that we are back — a steady, strong and sustainable brand. It’s like the second phase for the channel, with a fresh team, fresh perspective and innovative approach, which may not be always doing new things, but is doing things in a better way.
Some of your competitors have better revenues, with same or less cost.
If you see the cost and advertising revenue, we are at par with competition. If our cost is more, so is our revenue, proportionally. Where we might be lagging is in subscription revenue. With digitisation and the IndiaCast (distribution bouquet of Network18 group) in place, it will improve in future.
You said subscription revenues have not started coming in completely. In a scenario where ad revenue is expected to grow at a 6 per cent for TV, how do you see growth?
There is an economic slowdown, but if we remain a leading player, our ability to garner a higher share of advertising revenue improves. And as I said, the value equation has to be correct. With 27 channels under the IndiaCast bouquet, we believe we are better poised for that. Also, our focus will be on increasing revenue per user, not necessarily on television, but by means of engaging them with the brand.
You also have motion pictures business under the group. How does it fit in?
Viacom18 Motion Pictures is the second largest revenue generator for the group, after Colors. We had a very good year with five out of 11 films getting very good collections. For the next year also, we have a strong slate.I agree that the business model has to evolve and we have to find the right balance.
Are there any plans of listing Viacom18?
Both TV18 and Viacom are serious players and are here for a long time. As of now, there is no plan to list.
