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Raghav Bahl

Managing Director | 04 Sep 2009

India is a genuinely free and liberal democracy, which simply means that the news media has to be free and has to go according to its own code of conduct. Anybody who doesn’t believe in that has got it wrong, it’s as simple as that. If India has to remain a free democracy, then the news media has to remain free and has to regulate itself. Nobody can come and tell it what to do, and if anyone has such thoughts, then those thoughts are all wrong. Media will pick up this debate, television shows will continue to run, politicians will speak a few lines, but I firmly believe that nobody can interfere with the freedom of the media, particularly news media.

Raghav Bahl is the Founder, controlling shareholder and Managing Director of Network18. He began his career as a management consultant with AF Ferguson & Co, followed by a stint with American Express Bank, before he turned to his first love, media. Winner of the Sanskriti Award for Journalism in 1994, Bahl has over 22 years’ experience in television and journalism. He founded TV18 (now Network18 Group) in 1993.

He has been instrumental in crafting successful joint ventures with such media giants as NBC Universal, Viacom, Time Warner and Forbes. In a short span of 15 years, Network18 has achieved a market capitalisation in excess of $0.75 billion.

Bahl is a widely admired entrepreneur and was hailed as a Global Leader of Tomorrow by the World Economic Forum. He was also selected by Ernst & Young as Entrepreneur of The Year (2007) for Business Transformation and conferred the Editorial Choice Award (2008) at exchange4media Group’s ‘impact Person of the Year 2008’ award platform.

An Economics graduate from St Stephens College, Bahl had done his MBA from the University of Delhi.

In this interview with exchange4media’s Puneet Bedi Bahri, Bahl

Q. How has the year been for you?

The year has been great as far as news content goes – there were the General Elections, the surprising poll results, global crises, terrorist crises – it has been a very active year for news. The viewerships have been splendid; people have watched all that went on through the year. As far as revenues are concerned, we saw a fairly interesting trend in a lot of things. For instance, we did not see too much of a drop in the Hindi news operations and they continue to command decent revenues.

The English news channels got a great leg up during the elections, so that quarter we saw a huge improvement in the English news channels. The business news channels saw a dip in the very bad period between October 2008 and March 2009, and the reasons for that are very clear – financial service advertising completely disappeared, real estate advertising disappeared, a lot of corporate advertising was put on hold because companies were cutting costs, and so the six-month period was extremely bad for news channels, however, English news channels were not that badly hit.

If I put it percentage wise, business news channels lost 25 per cent or so of their revenues, while English channels lost 10-15 per cent, not more than that. Hindi news channels, I would argue, lost very little, maybe in single digits, in the period October 2008-March 2009. Right after that, in the period of April, May and June we had the elections and the general English news channels completely bounced back. Business news channels also began to show a little bit of bounce because some advertisers returned.

Hindi news channels were actually fairly buoyant. We are now in the July-August-September quarter, where we are seeing a comeback of business news channels because a lot of the categories that had disappeared are now returning as advertisers. So, net-net very good for content last year, very good for viewership, 4-5 months have been very tough for business, but now there are definitive signs of recovery.

Q. Must’ve been tough times since you are a listed company and your revenues were being hit...

When the revenues fall, the going does get tough, but on the other hand, news content itself is booming and you have to do justice to it, so you have to cover it from every angle. A crisis is a double-edged sword because though your revenues are in trouble your costs cannot be in trouble if you want to maintain market leadership. A lot of market leaders topple during this period and it’s because they start cutting the core thing which is the reason for their existence. So, it’s a very tough period, because you have these two diametrically opposite pressures on you. Also, the fact that if a crisis means news coverage depth and scope and width, and so you need to put in more resources because the audience wants more. We did not cut any costs during that period because we believed those crises were temporary and only for a few months, we had to simply last out. So, if you see our cost levels, and those are publicly disclosed numbers, they haven’t gone down, simply because we did not stop investing.

Q. What are some of the problems facing the industry today? How are you dealing with the high carriage fees?

Yes, carriage fees are high, and they are high just because there is such a fragmentation in numbers of players that are there in the space. That clearly has to come to an end at some stage and consolidation has to happen, and we have been seeing bits and pieces of it in the past few months. We also believe that capital inflow into this space will not as easy as it has been in the past. The inevitable conclusion is consolidation, which means some of the marginal players will have to reconfigure their business plans. However, consolidation by its nature is a very slow process, it does not happen overnight, because the costs of dislocation are so high that you can’t take these decisions so quickly.

Q. What are your expectations from the Government? Although the new I&B Minister hasn't taken a stand on content code, what is your view?

India is a genuinely free and liberal democracy, which simply means that the news media has to be free and has to go according to its own code of conduct. Anybody who doesn’t believe in that has got it wrong, it’s as simple as that. If India has to remain a free democracy, then the news media has to remain free and has to regulate itself. Nobody can come and tell it what to do, and if anyone has such thoughts, then those thoughts are all wrong. Media will pick up this debate, television shows will continue to run, politicians will speak a few lines, but I firmly believe that nobody can interfere with the freedom of the media, particularly news media.

Q. But with the rush for GRPs, channels do compromise their content -- especially in the Hindi news genre. What is your view since you have two Hindi channels?

Again, these are not new things, they were there in the print space in the past and they will continue as long as human beings are human beings. It happens in the film business, in fact, it happens in all content business. These are not new things, but ultimately it has been proven time and again that the audience will go where there is credibility of news. Some tamasha will happen, and it will be covered in a tamasha manner. This is not a new phenomena, as long as free media has existed there have been excesses, but those excesses have got a corrective mechanism within, because excess beyond a point cannot attract audiences.

Q. Now coming to Network 18, are you looking at getting into the business newspaper space?

No, this is what we have always told our shareholders, we are very open about it. We believe that it is a segment in our business mix that we are not in. If you look at the ecosystem of the properties that Network 18 has – it has an English business news channel, it has a Hindi business news channel, it has got News Wire18, and it has now got a leading fortnightly business magazine, Forbes India, and it has got business news sites too. So, we have everything in the ecosystem, and the only thing that is missing is a daily newspaper. The question is, does it make sense? Yes. But are we about to do it? No, we have told our shareholders that we have those plans on the drawing board because of the financial crisis that the industry is facing. However, if we do get a good opportunity and at the right value, and if the econometrics are right, then we will do it. But the time and value have to be right.

Q. You don’t have any media presence in radio yet? When will we like hear on that from you?

We are not in that space. When the bidding was taking place, we were focused elsewhere, so we missed the first rounds of the business. As of now, we are in consolidation mode of our existing businesses, so this is not on our metrics as we speak. Having said that, we are an extremely nimble and fast acting group, so if a value preposition comes, we are going to take a good look at it.

Q. Did your investments in Colors compromise spends on your news business?

What does the word compromise mean? We are the one company that did not have any salary cuts, we did not cut our resources, we did not have retrenchments, so where did we starve anything? These are all very separately run and administered with their own balance sheets and business plans. If you know Network18 well, then you will realise that all these businesses are run completely autonomously, they have their own resources. Yes, we invested a lot in Colors, but look at the value that has been created. We entered the GEC space just a year ago and can claim to be at the top rung among our other players.

Q. There have been talks recently that your numbers don’t look very good...

Again, we are very open about it, there is only one balance sheet. TV18 is overstretched, and we have a full plan to fix it. We got a rights issue and we are waiting for regulatory approval. The minute we get it, the TV18 balance sheet will be fixed. No other balance sheet in the group is stretched.

Q. If you were to restart any of your operations from scratch, what would that be?

Well, I think we made the acquisition of Info Media at the peak of the market in the October-December 2007 period. Any Indian businessman will say this. Ratan Tata had also said the same thing about Jaguar, that it was a much larger acquisition, but he, too, has said the same thing – the acquisition is right, but in hind sight, could I have bought it at the right price – no. We can say the same for Info Media, that in hind sight it was an extremely expensive acquisition, but its fine, we have restructured the company and are moving forward with it.

Q. Are you happy with the way IBN7 is going? It appears to be the weakling in your group...

We are a late entrant in this space. When we took over three years’ back, it was doing Rs 12 crore or Rs 13 crore in revenues. This year, it will close at Rs 60-70 crore in revenues. It might not be the best performance, nor are we at the top heap. But the channel is growing fine, and now takes care of all its costs. In the Hindi heartland, IBN7 commands a very high viewership, and in states like Uttar Pradesh is in the top rung. However, it will have to grow further even though it is in an extremely competitive space.

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