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Decoding Sony's Plan B

24-November-2017
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Decoding Sony's Plan B

Zen is the word that comes to mind when one walks into the spacious office of NP Singh, CEO, Sony Pictures Networks India (SPN). It probably helps to have Singh with his calm demeanour at the helm, as in spite of its expanded offerings, the network now has to move ahead minus the money-spinner and ratings giant Indian Premier League (IPL), that added Rs 1300 crore to its kitty last season. While a significant percentage of SPN’s topline goes away due to IPL broadcast rights moving to Star India after the recent Board for Control of Cricket in India (BCCI) auctions, and the big question on everyone’s minds is how SPN will make up this shortfall, Singh is his smiling self when he says, “We are curating a multi-sport culture in the country and have invested in that process by also acquiring TEN Sports. This, and other properties that we continue to bring on board, will nullify any losses on account of IPL no longer being with SPN.”
When Singh took over the corner office at SPN in January 2014, his top priority was the turnaround of the network’s flagship channel, Sony Entertainment Television or SET. Three years later, SET has scaled up the ratings ladder, SPN has expanded its offerings to become a 31-channel network, venturing into the kids and infotainment genre, and acquiring TEN Sports from Zee Entertainment Enterprise (ZEEL) for $385 million. On Singh’s agenda now is consolidating the network’s position across Entertainment, Digital and Sports.

SET: ON A NEW COURSE
In October 2015, SET garnered its lowest GRPs, 70, and was at sixth position in a cluster of seven GE channels. From getting the right people on board to laying down the future course of action and executing it, Singh says that SET has built a strong base of viewership, and gained significant traction, resulting in overall growth of the channel. This is on the back of non-fiction shows such as Super Dancer Chapter 2, The Kapil Sharma Show and fiction shows Kuch Rang Pyaar Ke Aise Bhi, Beyhadh and Ye Un Dino Ki Baat Hai, Sankat Mochan Mahabali Hanumaan, PeshwaBajirao and Mere Sai. But, it was bringing back the game show Kaun Banega Crorepati (KBC) Season 9, after a three-year hiatus with actor Amitabh Bachchan, that gave a big fillip to the channel, propelling it to No. 1 position while the show was on.
With KBC now off air, the channel has launched four new shows in the slot of KBC and a concerted effort has been made to ensure that the shows are inclusive to build reach in small town India. Singh says, “I feel very confident, given the content that we are offering to viewers, that they will do well with the core audience of the channel and we should be able to maintain our strong position in the Hindi GEC genre.” However, it’s wait and watch for the moment, as to how SET makes good on the gains made on the back of KBC; this at a time when Zee TV is in resurgence mode and Colors and Star Plus go all out to retain their position. The other GEC in the SPN stable, Sony SAB, was rebranded in June this year to give it a more vibrant, youthful, and contemporary feel, and Singh states that the slew of new shows, such as Tenali Rama and Sajan Re Phir Jhoot Mat Bolo (and the perennial favourite, Taarak Mehta Ka Ooltah Chashmah) have helped gain new viewers.
Looking at the broader Hindi GEC space, it has witnessed a metamorphosis over the last one year after BARC started measuring rural data, thereby leading to a growth of Free-To-Air (FTA) channels. With Star India pulling the plug on its GEC Life OK and revamping it to Star Bharat, an FTA channel with original programming, one wonders what is SPN’s blueprint? “We will explore original content on Sony Pal sometime in the future. At this stage, it will be too premature for me to discuss it. Right now, the archive content of SET and SAB has been doing extremely well,” says Singh. While it’s work in progress for the GECs, the Hindi movie channels of SPN – Sony Max, Sony Max2, Sony Max HD and Sony Wah – have consistently been topping their category across both the rural and urban markets.

THE ENGLISH DILEMMA
A genre that has taken a hit in the revamped BARC universe is niche channels, with the viewership of English language channels dipping. While acknowledging this fact, Singh maintains that SPN’s channels PIX and AXN have been leaders. Reflecting on the changing viewer consumption pattern, he states, “We have noticed a slight shift in consumption from linear to non-linear, in the English language. That’s something that we have come to terms with and counter.”

ON AN EXPANSION DRIVE
As part of its expansion drive, SPN entered the infotainment space through a joint venture with BBC Worldwide in March this year, to launch Sony BBC Earth, a premium factual entertainment channel. In a space dominated by the likes of Discovery and National Geographic, Singh terms the launch as successful, and says due to its strong content, the channel has seen a steady growth in reach and viewership. But, the challenges in the English space prevail here too, as the impressions on infotainment channels, like English entertainment, have been under pressure. With the entrenched players investing significantly in local content, the channel’s strategy is to continue to showcase “top quality content” from the BBC stable, with possibilities of local content in due course.
In April this year, SPN ventured into the kids category with Sony Yay. This genre is cornered by three dominant players – Cartoon Network (Turner), Disney and Nickelodeon (Viacom18), the combined market-share of which is over 90%. In a category where character love determines success, the approach has been to build affinity for original home-grown characters and grow reach. SPN has to surmount the challenge posed by the three dominant players, who leverage the strength of their bouquet of channels to garner market-share and get a slice of the under-indexed ad-pie. Asked whether the network would look at further segmentation here, Singh says, “Currently, my objective is to first make Sony Yay! a strong brand and then follow it up with other options.” It will be interesting to see how the youngest channel in the kids genre makes a dent in the market-share of the entrenched players and charts its own growth path.
As for the HD space, limited viewership has not helped broadcasters who were enticed by higher ARPUs earlier. Says Singh, “For LePlex HD, it is still early days. The High Definition segment has limited viewership and within that, LePlex has performed decently. It could have done better, but given the limitations and lack of growth in HD subscribers, we have not seen the numbers grow as much as we would like. ROX HD has also done well. It’s a unique proposition but has loyal viewership.”

THE DIGITAL PLAY
Coming to Digital, SPN’s OTT platform, Sony Liv, has a lot of catching up to do when compared to its peers. As per data from app analytics firm App Annie Inc on monthly active usage for the first half of the year, Star India’s video streaming app Hotstar was at the top spot, followed by JioTV and JioCinema (from Reliance Jio Infocomm Ltd), with Voot (from Viacom18) and Amazon Prime Video rounding off the top five. Sony Liv comes in at sixth spot, climbing up from seventh position (in the second half of 2016). Commenting on this, Singh claims that SonyLiv has turned profitable and says, “We are building it brick by brick. We have actually achieved a lot of success in the last one year.”
The prime focus now is on Sony Liv becoming the destination for sports – cricket and football – which will help drive traffic to the platform. In addition, the platform is aggregating original content, short films, regional content, investing in regional content and has introduced food as a genre, tying up with Sanjeev Kapoor to launch FoodFood on SonyLiv to curate the digital food experience. While all OTT players are investing in original content, it’s catch-up content that drives viewership for SPN, and here Singh surprises us when he says, “The highest consumption of Hindi GEC content on any digital platform is content from SET and SAB on Sony Liv.”

THE SPORTING DUEL
SPN’s acquisition of Zee’s sports business has helped strengthen its sports play. The lucrative IPL had helped SPN build reach and made the network a must-buy for an advertiser. Now, it needs to be seen how SPN counters Star’s aggressive sports play and how assertive it will be when it comes to bidding for the upcoming BCCI’s media rights for all international matches in India, which Star India holds till March 2018.
On being asked how the acquisition of Ten Sports has worked out, Singh says, “It’s just been six months post closure and the integration has got completed successfully. Our distribution revenues have grown on the back of TEN Sports. We’ve had two cricket series, West Indies and Sri Lanka, and the third is coming up with South Africa. This has also helped us grow our ad revenues. So, the TEN Sports acquisition has gone well.”
In addition, SPN is looking to invest in acquiring relevant sports rights across sports such as Football, Basketball, Wrestling, Tennis, etc, as it has 11 channels in its portfolio dedicated to sports, including a Hindi feed. However, with Star India now betting big on Regional sports – with Star Sports 1 Tamil and more recently Star Sports 1 Kannada Kannada - it needs to be seen how Sony counters this move as regional is one space where SPN has still not made its presence felt. The other three big broadcasters – STAR India, ZEEL and Viacom18 - have been aggressive in driving their regional plans in an attempt to drive revenues as regional markets are lucrative for broadcasters. For example, the advertising potential of the four southern markets is estimated at around Rs 45-50 billion as per the KPMG India- FICCI Indian Media and Entertainment Industry Report 2017. SPN loses out on this revenue stream, as barring its Bengali channel, Sony Aath, it has no regional presence. “Regional has always been of interest to us and we evaluated a few opportunities a few years ago. We may have something to share with you in the near future,” says Singh.
On the movies front, Singh says SPN’s studio arm Sony Pictures Networks Productions has had a 50% success rate, with the Arjun Kapoor-starrer Mubarakan doing decently well while Poster Boys failed to set the cash counters ringing. Currently, the company has one film under production and it is evaluating two other projects.
Meanwhile, the corporate ethos of SPN has been coined as ‘Go Beyond’ and Singh says that this philosophy denotes SPN’s thrust to go beyond the ordinary. It appears that the network aims to stay true to its philosophy, be it in the effort to produce and exhibit upscale, out-of-the-box content, expand into new genres and take on entrenched players, dial up its Digital game or become aggressive on the sports field. But, will this philosophy help the network as a whole move up the chain and become one of the top two networks in India in terms of viewership and revenue? For now, we just have to stay tuned, wait and watch.

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