Tea with BS: Sunil Lulla

The brand-man of Indian media

The marketing guru on the television business and what it will take to make it sustainable.

Sunil Lulla is wearing green socks with guitars on them. The 50-year-old managing director and CEO of Times Television Network has arguably one of the most colourful collections of socks in India. And, as usual, he is sporting about showing them when I ask. He is, however, less sporting, in fact almost scathing, about the way the television business in India is viewed — by both analysts and regulators.

The only thing he declines to comment on is the recent judgement penalising one of the four channels he runs, Times Now, with Rs 100 crore for showing a wrong photograph. Otherwise, Lulla is himself, witty and full of gyaan, says Vanita Kohli-Khandekar.

 

He gets into his element almost as soon as I settle down in his office at Lower Parel in Mumbai. “The whole thing [the new uplink/downlink policy] is based on the premise that we have too many channels. Are we always going to be a Rs 30,000-crore market? There are 21 languages, 1.2 billion Indians. Why do you think 600 channels are too much? This premise is incorrect,” he says. His point is that lots of niches in the Indian television business haven’t even been looked at.

This is when my black tea and his regular one arrive. It is the fag end of the day and we are peckish. So Lulla fishes out two containers of biscuits from somewhere under his table. I bite into a zeera cookie and ponder Lulla’s theory versus Times’ performance.

The company has been led, largely, by Lulla. He was CEO when it was set up in 2005. He left in 2008 to head Alva Brothers’ disastrous foray into broadcasting — Real. Twenty months later, he was back as CEO of Times TV. Though Lulla doesn’t share numbers, it is estimated that Times Television is seeing a 50 per cent revenue growth, year-on-year. It is expected to hit Rs 400 crore by March 2012. This is with just four channels — Times Now, Zoom, Movies Now and ET Now.

He divides the whole TV space into two broad clusters — information and entertainment. Within information, especially in news, “there are too many channels,” he says. In entertainment, “We are constantly looking for niches and grooves,” he adds.

That seems rather conservative. Companies smaller than the Rs 5,000-crore Times Group, of which Times TV is a part, have gone on to launch bouquets with all kinds of channels. Notice NDTV’s unsuccessful foray into non-news with NDTV Imagine (now part of Turner) and other channels. Or Network18’s successful one into general entertainment with Viacom18’s Colors. So why not Times?

“We are not a shotgun network. We don’t want to launch six channels. The first thing to ask is, ‘is the business sustainable, can we make profits’.” He bites into a nankhatai as he points out that the cost of entry and the lack of pay revenues both act as barriers.

Lulla has a point. On the back of higher carriage and content costs and sluggish revenues, operating margins for Indian broadcasters have halved over five-odd years. So you have an industry with 142 million TV homes, the second-largest number anywhere in the world that is frustrating investors. The revenues of the TV industry in India are less than half of those in Brazil, which has only 40-50 per cent of the TV homes India has. Lulla is on firm ground when he says he will not be hurried into investing unless he knows there is a profitable niche to be exploited.

Nevertheless, the question begs asking. Does the success of Times’ print business – it is the publisher of The Times of India and Economic Times, among other brands – dwarf the attention, capital and ambition for TV within the group? Print gets in roughly 80 per cent of the topline for the group. While it has successful investments in radio, the internet and TV, owner Samir Jain’s heart is in the print business, say insiders. All the other businesses are championed and run by younger brother Vineet Jain.

Remember this is the same group that gave up the opportunity to be on AsiaSat in 1991. Subhash Chandra bought that transponder and launched Zee. Today, Zee’s group revenues equal those of The Times.

“The shareholders are very committed about what we do. And we get great cross-media support. As a group, our philosophy is that we should have a number one or two position in whatever we get into and it must generate enough cash to pay for itself. There is no point in having a bouquet of 10 or 20 channels if they are not profitable,” says Lulla.

What the group is good with is building sustainable brands, says Lulla. And that is what he is striving to do. “Over the next two to three years a large part of contemporary India will be digitised. That is when brands will be powerful and consumers will pay more for brands. Brands are the big differentiator,” he says. For example, “The Times of India is a strong, sustainable brand. Zoom and MTV are upmarket brands. Zee has remained a steadfastly middle-class brand,” he says.

This is familiar territory for Lulla. He has been building media brands for more than 20 years now. He brought a marketing focus to HMV (now Saregama) in the nineties with brand tie-ins with films that HMV had music rights to. Among his various jobs was one as head of a little known music channel from the US. Under Lulla and his team, MTV morphed into an eclectic brand that defined popular culture in India. Sony, Real and Indya.com were among his other jobs.

His focus currently is on building processes. “Process in media delivers. Most people will say content or idea, but businesses built around process are more sustainable. And in TV this doesn’t happen,” he says. He warms up to the argument as he gets up and starts walking around to exercise his bad back. “The IT industry used Y2K to build a Rs 200,000-crore industry. Why can’t we be a Rs 100,000-crore industry. What will it take to get us there?” he asks.

This is where he finds both media owners and managers terribly short-sighted. “Star, Zee, Sony and Colors will all do a reality show at 9:00 p m. Why can’t we have reality shows at 8, 9, 10 and 11? Why can’t we push cable prices to Rs 1,000? We have to ask consumers to pay for good content. Some [channels] will fall out as a result,” he says. That is when investment in content will happen. Of the 650-odd channels only 110 are pay. That is because, “as an industry we don’t have the conviction that we will get pay revenues,” says Lulla.

To make much of this work, the industry needs price decontrol and addressable digitisation to happen. But the real game-changer says Lulla is consumer education. “The big challenge in India is to make consumers aware that content has value,” he says. The Indian Broadcasting Federation of which he is director has commissioned research with that in mind, says Lulla as he walks me out.

That is a tough one. Some of the world’s largest media firms are still struggling with trying to get consumers to pay better prices for content. The only thing I can do is wish him luck as I leave.