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Multi Screen Media (MSM), earlier Sony Entertainment, is one of the top four broadcasting networks in India. Manjit Singh, chief executive of MSN, is bullish on the digital segment and sees a lot of opportunities in digitisation. In an interview with Gaurav Laghate, he talks about the company's expansion plans. Edited excerpts:
What do you think about growth in MSM's digital business?
For us, the digital age is one of the most exciting times. We have set a goal to raise the contribution of this segment to our revenues from the current one to two per cent to 15 per cent in three years.
We believe the digital space offers us an opportunity to engage our viewers much more deeply, both through our existing television content, as well as new content we create specifically for them in the digital space---mobile or wired internet. The way we use digital media is critical to our linear television strategy; it is something we, as broadcasters, should embrace.
How would the share of the digital segment to revenues rise?
At this point, we feel it would largely be ad-supported. We do not see a subscription model emerging in India anytime soon. This is because in India, when you buy an internet connection, people say they are subscribing to the internet. After that, they want everything free. They wouldn't pay for a second subscription service. It would take years to educate people about intellectual property rights, etc, before they pay subsequent subscription fees for premium content. So, we feel the need to keep all this advertising-based; I mean video advertising, not banners.
Do you expect more consumption in the digital space than in the TV segment?
The fact is linear television in India is here to stay. In small towns, at 8 pm, there is nothing to do; people settle down to watch their favourite soaps. Time-shift, too, isn't required; the next day, they can catch a replay of the broadcast. Also, the rates on these new media are significantly higher than the price points for television. That acts as a deterrent. The whole issue of data plans is still quite expensive.
I think there are some barriers in the road to the digital segment becoming widespread. But leaders in metros would definitely use 3G more for streaming videos. For them, we would also need to potentially look at creating channels that have only video content for fast-use on mobile and tablets, where three to five minutes of content is packed together, in addition to our content from linear television.
Your flagship brand, Sony Entertainment Television (SET), has seen a loss in viewership ratings. How do you plan to bounce back?
SET is slightly skewed towards metros, or aspiring India. Now we also have LC1 towns reporting (TAM has started LC1 town reporting). LC1 programming is a little different, and we probably aren't delivering as much relatable programming to them as we are to larger towns and the urban population. We don't want to dilute that strategy for SET. We need to be the best in that, because today, LC1 towns are contributing 24 per cent to the total business in ratings. If we do a really good job for the remaining 76 per cent, ratings would automatically improve, aided by some spillover. LC1 towns want to follow medium-sized towns. So, if we do a super job for our target audience, LC1 towns would also be dragged along. In the case of SAB, the programming is much more relatable to LC1 towns, and we are using SAB as a means to get to LC1 towns. So, advertisers really looking at LC1 towns may use SAB more than they can use SET Max, which appeals to everybody across towns.
Are you seeing a fall in the carriage fee due to digitisation?
If you look at the metros, most people who have carried out deals there would tell you there has been a 20-25 per cent fall in carriage fees. However, people say there is no fall because the TAM rating system has added LC1 towns and so, people had to start paying carriage in these towns. The savings from one side---the metros---were spent somewhere else. But when India is fully digitised, savings would be there. You would see a fall in carriage fees every year, first in the metros, then in the 38 cities, and so on. It would be a less-significant portion of the business. But it would take some time, otherwise the huge investments wouldn't be seen.
Recently, MSM announced a re-entry into film production. What opportunities do you see in this space?
Our first film was a studio initiative by Sony Pictures in Los Angeles. MSM is doing this for the first time. We are not taking up the studio model, where our colleagues in Los Angeles are involved. We are doing this as part of our MSM operations.
Expanding into movie production is a natural step. We think for small- to medium-sized films, there is a very good business model. We are not doing this as a hobby; we actually believe with a focus on theatrical releases, this segment could see good business. Last year, a lot of small- to mid-sized films did well. We think this is start of a trend; you are going to see more of that. And, we want to participate in this because theatrical is a profitable business; you can always sell the television rights. We are not saying the films would be sold to Sony alone. Whoever bids the most would win.
What is the structure and the size of films you are looking at?
We are putting in place a structure that would have people passionate about movies, as well as the expertise to help us select the ones we want…then progress to stories and the plans for those movies, while making sure they are within our budget. It would be like a completion bond---we would be our own completion bond to ensure we remain within the budget. We have already planed three projects, one of which is with Eros International. We are looking at small- to medium-budget films-Rs 5 crore to Rs 15 crore.
You have hired a former STAR India executive to head Pix. Do you plan to launch more channels in the space?
First, we want to want Pix to have a dominant position, to establish its rightful position and move to the perception of a premium channel. Owing to digitisation and the fall in carriage fees, over time, I think there would be opportunities to try different combinations…maybe, a more classic kind or a premium channel, which means no ads, but paid subscription. We are looking at those things…there are different libraries you could use to address those segments. I think we are in a very good position to expand our bouquet.
