Sudhanshu Vats, Group CEO of Viacom18, picks the 10 defining moments of the network’s 10-year journey and also shares his vision for its future
BY SIMRAN SABHERWAL
When Viacom Inc and Network18 Group inked a 50:50 joint venture in 2007, to form Viacom18, the American media conglomerate’s presence in India was known for its niche offerings - popular youth channel MTV, kids channel Nickelodeon and English music channel VH1 with revenues of around Rs 60 crore. All this changed with the launch of the group’s Hindi GEC, Colors. There was a high blitz marketing campaign, innovative and disruptive fiction programming such as Balika Vadhu, Uttaran and big ticket reality shows such as Khatron Ke Khiladi and Bigg Boss that led to Colors claiming the No 1 spot in the highly competitive Hindi GEC space by dislodging then leader Star Plus. Sudhanshu Vats, Group CEO of Viacom18, picks the 10 defining moments of Viacom18’s 10-year journey for IMPACT and comments on where the network is poised now.
1 - 2007: Viacom Inc and Network18 Group ink JV to form Viacom18
On the journey so far, Vats says, “We’ve had a fantastic first 10 years where we’ve grown 40X. We’ve grown from one line of business to five across TV, Films, Digital, Live & Merchandise and expanded from three channels to 44 channels.”
2- 2008: Colors launch with 83 GRPs within Week 1. Ranked #3 on first ratings post debut and #1 within 9 months of launch, beating Star Plus
Colors has been the driver channel for the network, notching up numbers both in terms of ratings as well as revenue. Since Vats took over in 2012, a concerted effort has been made to expand the network’s offering and reduce its reliance on Colors. On Colors, Vats says, “In the last five years, our reliance on Colors has come down considerably from an ad sales perspective. Earlier, 80% of our ad sales used to come from Colors (SD); that number has now come down to around 50%. Moving forward, over the next three to five years, our total reliance on Colors will come down further to around 40% of our TV business.”
3 - 2011: The films business Studio18 rebranded to Viacom18 Motion Pictures, launch of 24- hour English Entertainment channel, Comedy Central and Nickelodeon’s entertainment channel for teenage kids, SONIC
With GST proving to be a dampener to advertising, Viacom18 was recently able to offset this and grow its topline, courtesy Viacom18 Motion Pictures release Toilet: Ek Prem Katha drawing in big numbers. As per media reports, the film vertical’s contribution to the total revenue is about 10-12% and is a profitable business for the network. The company is looking to build its slate with a couple of tent-pole properties, three to four mid-size films and a couple of small budget films. Regional films, particularly Marathi, will also be a focus area in the coming year. A dedicated division called Tipping Point has been set up that will focus on content-driven small web films targeted to the Digital audience. Traditionally, films have been seen as a high risk business, but Vats says, “We have brought in science behind the art of film-making in addition to focusing on the story, direction and the actors. We bring in science in marketing, distribution, and some amount of layered checks in content. Our green lighting process goes through three to four levels. Our marketing is focused on RoI, follows fundamental principles of how many people you want to reach and how quickly and what is the best media plan to do that. We are experimenting with some amount of tracking to beget better trailers. In distribution, we are always asking what is the right number of screens, which is the right location and what is the right timing for this?”
4 - 2012: Viacom18 forms organic distribution company IndiaCast Media Distribution Private Ltd, and initiates acquisition of regional channels ETV Gujarati, ETV Marathi, ETV Kannada, ETV Oriya and ETV Bangla
Over the years, regional channels have shown strong growth and it’s no surprise for Viacom18 that Regional is the second biggest revenue generator, behind the Hindi GECs. The network currently operates six regional channels - Colors Marathi, Colors Kannada, Colors Super (second Kannada GEC), Colors Bangla, Colors Gujarati, Colors Odia - and is all set to enter the very competitive Tamil Nadu market with Colors Tamil, set for a February 2018 launch. “Our biggest thrust would be in driving regional. We will widen and deepen our presence in each of the languages and geographies. That will be a critical aspect of our growth,” says Vats.
5- 2013: Launch of new line of business, Integrated Network Solutions (INS), and Viacom18 turns profitable
The one space that Viacom18 is betting big on is Live entertainment and the strategy going ahead will be to create more IP properties across genres and formats, in addition to its existing properties such as Vh1 Supersonic festival, MTV Bollyland, Comedy Central Chuckle festival amongst others. Viacom18 Consumer Products – the consumer products arm of Viacom18 - in association with Funbars Hospitality launched FLYP@MTV Café in Delhi and has also expanded the cafe to Chandigarh and Mumbai and plans to take the cafe experience to 10 more cities across India. Says Vats, “While building eco-systems, two businesses will get a thrust, which is our Live business where we will introduce many more IPs and programmes, and strengthen our merchandising arm. There is a lot of potential in this country in terms of licensing and merchandising; as incomes grow, this business will get a massive fillip as we go forward.”
6- 2015: Launch of first home-bred English Entertainment Channel Colors Infinity
On English entertainment, Vats says, “Being the leading content player is important. Also, I think measurement will soon get dialled up. As the subscription becomes better, our ability to get slightly better subscription on English content on Television will be higher. Finally, we will need to find a total audience kind of view here, where the total audience is basically an English video audience, whether it is on Television or Digital is secondary. It’s about total audience.”
7- 2015: Viacom18 starts in-house ideation lab ‘Big Belly’ where anyone from the company can provide an idea on any topic – from content ideation to waste management – and the company implements it
“One thing we are really proud of is our culture and there are different dimensions to the culture. If you look at innovation, we have done a lot of work in this space. There is an innovation platform internally called ‘Big Belly’, where we crowdsource ideas on everything - from content ideas to business and management ideas. It is an intranet within the company. Voot as a brand name came through crowdsourcing,” says Vats
8- Viacom18 starts Change Leaders Conference – an immersive internal conference where the leadership team and senior management deliberate on the industry and its future
On grooming talent, Vats says, “We want to build in meritocracy in everything that we do, so that over a period of time, we are able to build careers and leaders. Our attempt is to focus on leadership development and we have a very structured young leadership development programme. By doing that, we will build capacity at Viacom18, but this will also be our humble contribution to the industry. I would like to see Viacom18 become a hotbed of innovation, great place to work and a breeding ground for outstanding leaders in Media & Entertainment.”
9- 2016: Launch of Voot, Viacom18’s OTT VoD service
Though a late entrant in the Digital space, Voot – the advertising-led video-on-demand (AVOD) platform – has seen steady growth since its launch in March 2016. As per data from app analytics firm App Annie Inc on monthly active usage for the first half of 2017, Voot was in fourth position behind Star India’s video streaming app Hotstar, JioTV and JioCinema (from Reliance Jio Infocomm Ltd). The network claims that Voot has had 50 million gross downloads with 30 million monthly active users and an average watch time of over 50 minutes per person per day.
10- 2016: Launch of Viacom18’s gender diversity program WAVE- Women at Viacom18
Commenting on WAVE, Vats says, “An important piece of our culture is being inclusive and diverse. We are clear that we need to build a diverse organization where we give equal importance to everyone, particularly women. Therefore, our programme called WAVE - Women at Viacom18 - is ahead of its time across industries in the kind of benefits that we offer.”
LOOKING AHEAD
Here are some of the things that Viacom18 has lined up for the short and long term. First up is entry into the largest market in the South, Tamil Nadu with Colors Tamil. As per KPMG India- FICCI Indian Media and Entertainment Industry Report 2017, the size of the Tamil market is estimated to be Rs 17- 18 billion. However, it is a market that is dominated by the Sun Network with Star Vijay and Zee Tamil fighting for the distant second spot. In this scenario, what is Viacom18’s gameplan? Sudhanshu Vats says with digitization gaining momentum, it will be a gamechanger as more quality content will now reach the consumers. He adds, “Tamil Nadu is a challenging market but the market is now showing green shoots of re-appraisal by the consumer in terms of stories and content. I think it’s the right time for us to enter this market and bring in disruption in content, style and quality of story-telling.”
As Viacom18 looks to strengthen its Digital portfolio, the group is all set to move premium content, such as kids’ content, behind a paywall from mid 2018. Post this, Voot will operate on a ‘freemium’ model with both AVOD-led free content and subscription-based premium content. However, with Hotstar priced at Rs 199/ month, Amazon priced at Rs 999/year and Netflix at Rs 500 and Rs 800 per month for its basic and premium services respectively, what remains to be seen is how Voot is priced, especially when consumers have just started loosening their purse-strings for Digital content. Vats believes that with consumers paying around Rs 200 or roughly $3 in India for Television, this price-point could be the ceiling. Says Vats, “The price will have to be affordable if you want more people to come behind the paywall, and our attempt will be to try and drive people behind it. For that, we will need to keep the pricing sharp and we are still working on it.” As for when the platform will break even, Vats says that assuming that there are 500 million video users and data becomes more affordable and with about a tenth of all consumers behind a paywall, Voot should break even within five years.
An area where Viacom18 lags behind its peers is in its earnings from the international market. With a presence in 80 countries and an overall reach of over 507 million, Vats acknowledges that Viacom18 has to catch up with the competition, though the company has dialled up its international play significantly in the last five years. He says, “We are amongst the new players on the block but we have done a lot in the last five years. We have grown about five times in this period in international. However, as we build the portfolio with more channels, more TV content, more relevant content under MTV for youth, Indian IPs for kids, our ability to tap into international markets will keep growing. That’s a market where we want to grow very rapidly.”
LEVERAGING SYNERGIES WITH RELIANCE JIO
A big surprise at the recent ten-year celebrations of Viacom18 was the presence of Mukesh Ambani, CMD, Reliance Industries. Speaking at the gala event, Ambani said that his gift to Viacom18, on completing a decade, would be spending time with the media vertical once his work with Reliance Jio is done. Optimistic about the growth of the Indian M&E industry and Viacom18, Ambani signalled a possible tie-up between Jio and Viacom18. On his part, Vats sees ‘abundant synergies’ between the two in three broad areas - content and video, live events and experimentation with new technology like VR, 4K and AR, and lastly big data and analytics which can be mined to create breakthrough content.
While the drive is on building synergies, there are some significant white spaces for the network. What stands out is also the lack of channels in key genres – such as a second Hindi GEC (all its peers have a second Hindi GEC), a pay Hindi movie channel, regional movie channels and an English movie channel. Commenting on this, Vats says, “As we embellish and strengthen our library, we will look at both pay and free model for our movie channels.
We need to revisit English movie channels. I don’t know whether an English movie channel is a linear TV play or a digital play, that’s the question we will keep asking as we go forward.”
What has to be kept in mind is that, as per the Pitch Madison Advertising Report 2017, the English niche segment that Viacom18 operates in, garners just 2% of overall TV adex pie at around Rs 300-400 crore, while the size of the English movies space is around Rs 400- 550 crore or 3% of the overall TV adex. While there is news of a second Hindi GEC from the Viacom18 stable, there is no definite timeline and Vats states, “As far as a second offering from us in concerned, we keep exploring. There are no concrete plans as yet but we are looking.” A determined effort is made to drive synergies across all business units in the network, as Vats says, “We have got to build strong brands and tell great stories and become media agnostic or screen and platform-agnostic.”
On a final note, Vats says, “I would like to sign off by using the theme of our 10th year celebration corporate film - Open New Worlds. Viacom18 is committed to opening new worlds it starts with opening minds. There will be opportunities galore, as well as challenges and it will be all about our ability to tap into these opportunities. With the way convergence is happening and different technologies are coming in, the interplay of VR, AR technologies, Internet of things, convergence of pipes and technology and other areas give enormous opportunities for content players and we have to stay focused on our ability to tell great stories. Story-tellers have a big and bright future ahead.”
@ FEEDBACK simran.sabherwal@exchange4media.com
