Adapt or fade
A churn is imminent in the satellite TV business, writes Zee Entertainment's chairman, as broadcasters would be expected to adapt to consumer needs to be more appealing.
When the suggestion of sharing my thoughts for the next two decades first came to me, I paused for a moment wondering how fast two decades had passed for Zee Entertainment Enterprises Ltd. The pace of the developments sank in as I looked around. Before I share my views on the next two decades, I would like to look into the rear view mirror and assess our eventful journey.
In 1990, a casual visit to the office of Doordarshan in Mumbai inspired me to launch a satellite TV channel, even though at one point, I had toyed with the idea of entering the cellular phone business. A school friend in Doordarshan arranged a meeting with the Chief Engineer. This was the focal point in my entry into TV broadcasting, then reserved for the public sector.
When the world including India watched CNN broadcast the Gulf war, I wondered, "Why can't India have its own private satellite channel?" I kept questioning the authorities: "How was CNN allowed?" The answer that I got from the government authorities was: "They were being beamed from a foreign country." I explored the possibility of setting up a terrestrial channel based in Nepal. But we learnt that the signals would not reach the major Indian cities. Finally, after a lot of struggle, assistance came from unfamiliar sources and in the form of a fund from Hong Kong, three non-resident Indian friends and some other venture funds.
The existing media companies in India felt satellite TV would not succeed here. Since I did not know anything about the media business, I had no such fears.
Launching a private satellite TV channel meant roadblocks at every stage. When I broached the subject with the then secretary for information and broadcasting, he was livid. "You will introduce consumerism and destroy the country. Your proposal will be cleared only over my dead body," he thundered. I approached several legal luminaries. All of them shot down my proposal. But I was not going to take a 'no' for an answer and I worked out a strategy. My question was simple, "If foreign channels like CNN and BBC could be viewed in the country, why not a private Indian channel?"
In 1992, I entered the business of entertainment software through Empire Holdings Ltd. The name was changed to Zee Telefilms. It provided content to Zee TV Hong Kong, which beamed the signals into India via AsiaSat. Thus was born Zee TV in India, on October 2, 1992, initially with only two hours of content.
Overnight, we had ended Doordarshan's monopoly. We focused initially on inexpensive programming. The average programming cost was barely Rs 30,000 an hour. The formula of cost-conscious programming worked and Zee was an instant success. With soaps like Tara, Hasratein and reality musical shows like Antakshari and Sa Re Ga Ma, Zee TV became a hit. In six months, Zee was reaching out to almost 12 million homes across the country.
It was only in 1998-99 that the private satellite TV channel business became legitimate in India. Since then, there has been no looking back for Zee. Today, Zee is available in 167 countries and has a viewership of over 500 million. As the world's largest producers and aggregators of Hindi programming, Zee Entertainment is the parent organisation of some of India's most preferred brands.
However, even after 18 years, the industry is troubled by some issues. For one, I feel there should be some content regulation. One option is that channels regulate themselves. But I am not sure this will work out, going by the irresponsible behaviour of some channels during 26/11 and the Kargil war.
A content code will also bring about some regulation of advertising. It will specify that in an hour's programming there will only be few minutes of advertising. In 1992, only six minutes of advertising was allowed in an hour's programming together with two minutes of in-house promotions. Today, advertising accounts for 10 minutes and content 20 minutes in half an hour.
I think consumer pricing should be an open market and there should be no regulation. The industry cannot grow with such regulation. Channels will continue to dole out poor programming. If channels get more money, the quality of programming will definitely improve.
Positive changes have also happened. The industry has grown exponentially. I was happy to hear about the I&B ministry's plans to tighten the issue of new licences for downlinking and uplinking. Running a TV station should be treated very carefully, because it reaches millions of households.
Then, our distribution system is neither well regulated nor well organised. India is said to have 10,000-20,000 cable operators. Not everybody applying for a banking licence is guaranteed to get one. But this is not the case in broadcasting. Today, everyone wants to come into this business without understanding the dynamics fully. There are 450 Indian-origin TV stations and about 180 waiting for clearance. I see a lot of churn and consolidation over the next 10-15 years.
The broadcast companies have to be very clear and adaptive towards consumer needs if they are to stay in good health. I feel that all broadcasters must come together and analyse their objectives. Advertisers and cable operators are in unison, but broadcasters are not.
Zee will continue to strengthen its portfolio with distinctive offerings and maintain the leadership trend in all its businesses. In the next 20 years, I would like Zee to be the most profitable company with all its channels being either No. 1 or a strong No. 2.
In 1990, a casual visit to the office of Doordarshan in Mumbai inspired me to launch a satellite TV channel, even though at one point, I had toyed with the idea of entering the cellular phone business. A school friend in Doordarshan arranged a meeting with the Chief Engineer. This was the focal point in my entry into TV broadcasting, then reserved for the public sector.
When the world including India watched CNN broadcast the Gulf war, I wondered, "Why can't India have its own private satellite channel?" I kept questioning the authorities: "How was CNN allowed?" The answer that I got from the government authorities was: "They were being beamed from a foreign country." I explored the possibility of setting up a terrestrial channel based in Nepal. But we learnt that the signals would not reach the major Indian cities. Finally, after a lot of struggle, assistance came from unfamiliar sources and in the form of a fund from Hong Kong, three non-resident Indian friends and some other venture funds.
The existing media companies in India felt satellite TV would not succeed here. Since I did not know anything about the media business, I had no such fears.
Launching a private satellite TV channel meant roadblocks at every stage. When I broached the subject with the then secretary for information and broadcasting, he was livid. "You will introduce consumerism and destroy the country. Your proposal will be cleared only over my dead body," he thundered. I approached several legal luminaries. All of them shot down my proposal. But I was not going to take a 'no' for an answer and I worked out a strategy. My question was simple, "If foreign channels like CNN and BBC could be viewed in the country, why not a private Indian channel?"
In 1992, I entered the business of entertainment software through Empire Holdings Ltd. The name was changed to Zee Telefilms. It provided content to Zee TV Hong Kong, which beamed the signals into India via AsiaSat. Thus was born Zee TV in India, on October 2, 1992, initially with only two hours of content.
Overnight, we had ended Doordarshan's monopoly. We focused initially on inexpensive programming. The average programming cost was barely Rs 30,000 an hour. The formula of cost-conscious programming worked and Zee was an instant success. With soaps like Tara, Hasratein and reality musical shows like Antakshari and Sa Re Ga Ma, Zee TV became a hit. In six months, Zee was reaching out to almost 12 million homes across the country.
It was only in 1998-99 that the private satellite TV channel business became legitimate in India. Since then, there has been no looking back for Zee. Today, Zee is available in 167 countries and has a viewership of over 500 million. As the world's largest producers and aggregators of Hindi programming, Zee Entertainment is the parent organisation of some of India's most preferred brands.
However, even after 18 years, the industry is troubled by some issues. For one, I feel there should be some content regulation. One option is that channels regulate themselves. But I am not sure this will work out, going by the irresponsible behaviour of some channels during 26/11 and the Kargil war.
A content code will also bring about some regulation of advertising. It will specify that in an hour's programming there will only be few minutes of advertising. In 1992, only six minutes of advertising was allowed in an hour's programming together with two minutes of in-house promotions. Today, advertising accounts for 10 minutes and content 20 minutes in half an hour.
I think consumer pricing should be an open market and there should be no regulation. The industry cannot grow with such regulation. Channels will continue to dole out poor programming. If channels get more money, the quality of programming will definitely improve.
Positive changes have also happened. The industry has grown exponentially. I was happy to hear about the I&B ministry's plans to tighten the issue of new licences for downlinking and uplinking. Running a TV station should be treated very carefully, because it reaches millions of households.
Then, our distribution system is neither well regulated nor well organised. India is said to have 10,000-20,000 cable operators. Not everybody applying for a banking licence is guaranteed to get one. But this is not the case in broadcasting. Today, everyone wants to come into this business without understanding the dynamics fully. There are 450 Indian-origin TV stations and about 180 waiting for clearance. I see a lot of churn and consolidation over the next 10-15 years.
The broadcast companies have to be very clear and adaptive towards consumer needs if they are to stay in good health. I feel that all broadcasters must come together and analyse their objectives. Advertisers and cable operators are in unison, but broadcasters are not.
Zee will continue to strengthen its portfolio with distinctive offerings and maintain the leadership trend in all its businesses. In the next 20 years, I would like Zee to be the most profitable company with all its channels being either No. 1 or a strong No. 2.
