Chairman | 11 Dec 2009
The way Zee works is that we are clear that we have to deliver value to our shareholders and stakeholders and on a constant basis. We are not here for six months, one year and go somewhere else. Unless, I sell the company, where would I go? But executive-run companies can burn money. For an executive, it doesn’t make a difference – they will move on to another job and at double the salary again. What are they losing? But the bottom-line of what I am saying is that is there anything wrong and right about these things. Success is mostly in hindsight, it is not guaranteed.
From exporting rice a long time ago to pioneering the broadcasting industry in India, Subhash Chandra is regarded by many as a visionary who had opened up a sector so dynamic that the face of broadcasting as many had known it till then, changed forever.
His fame has spread beyond India’s borders and globally, Chandra is referred to as the ‘Father of the Indian pay TV industry’, than just a media tycoon or media baron. While many international companies have been buying businesses in India, Chandra is amongst those whose company bought Veria in the US for his passion on the subject.
As Chairman of Essel Group and ZEEL, Chandra knows what will tick next, and where the future growth will come from. His vision about his Group is sharp and clear.
exchange4media’s Noor Fathima Warsia caught up with Subhash Chandra and a free-wheeling conversation resulted, where Chandra speaks candidly on what he thinks about some of the new players in the industry, the issues facing the broadcasting, and especially news broadcasting, industry, besides giving insights into the thoughts that make him the media doyen that he is.
Q. It has been a bit of an age-old debate by now, but in the last few years, we have seen international media companies grow strong in India. How do you think this impacts our industry per se?
On the overall, India is pursuing a very open policy today, and in entertainment there is no restriction – it can be 100 per cent owned by international people, since it is in open market. I wish them good luck. But on the other hand, there are some Indian-owned media companies that have been very successful. Actually, many have entered this space, but most have entered the news space. I would think that 70-80 per cent of them who have entered news have got into it for different reasons, and in some cases, it could be just be a kind of protection. I was happy when the new Information & Broadcasting Minister said that she would recommend and tighten the issue of new licensing of downlinking and uplinking. My view is that running a TV station in any language or in any genre should be treated very carefully, because they are reaching the bedrooms of millions of households.
Especially, since our distribution system is neither well-regulated nor well-organised, there are more than 8,000 or 10,000 – some even say 20,000 – cable operators across India. It influences the family, and so we have to be careful. For that reason, proper criteria are required. For instance, banks don’t give license for banking to anybody – they apply fit and proper criteria. If I apply, they not only look for my credentials but also where did I receive the money from. They check the money trail and how the money came into the organisation. The Company Law even defines related parties, and they would check on those too for dubious records. And today, we have channel owners who have police records, and that is not good.
Indian news channels have lost their credibility today due to a few channels. I have seen some of the news channels downloading content from YouTube and running the whole channel – they are not spending any money. All this is not good from an industry point of view.
Q. Since we are on news, and you have quoted the banking industry example here, but any recommendations on what guidelines should the Government have in place for entering the news channel space?
I would take it one step ahead from what the banking industry is. Today, newspapers, for example, are only by people who can read. But in television, nothing is required – it is in your language with moving images, even the lowest common denominator will understand it. You have to be much more careful in television than you are in newspapers.
Q. In fact, in the past, you have been quoted on saying that even content should be regulated...
I am of the view that there is need for regulation. Some of my media colleagues are not happy with it, but I stand by it. One option is that one should be responsible enough and observe self-regulation, but look at what people were doing during 26/11 and even Kargil – news channels were, in fact, relaying information, and I believe there were channels that said that they are talking to terrorists. People even aired incorrect information.
Q. Moving to the other R word – recession – at present, there are many people who say that we have come out of the slowdown, and many who say nothing has changed. What is your view – is the slowdown history?
First and foremost, my view on the downturn was where do we see it. It is all in our minds – the moment you start feeling depressed, your way of thinking changes. Similarly, advertisers started conserving money. Whatever slowdown happened in India was because of that basic sentiment, and some foreign monies going away from the capital market. Though our advertisement revenues dipped, but otherwise outside Delhi and Mumbai, I didn’t feel in India there was any depression.
Q. But we really saw many people cutting down on costs, including job cuts and salary cuts?
There are two points to that – one, since the advertisers decided to cut down on the revenues, the media owners had to factor that, and second, many saw this as a good opportunity to rationalise costs as well. These are all chain reactions and they have a positive role to play from the long term viewpoint.
Q. Very recently you have decided that regional business would move away from Zee News Ltd to ZEEL. Could you share more behind this move?
We have shifted the regional general entertainment channels because they have grown and are much different in nature today. Earlier, these channels had news content also in them, like our Marathi channel had a Marathi news bulletin and general entertainment. But over a period of time, we have now launched a Marathi news channel, a Bengali news channel and so on. These channels are now pure general entertainment channels.
Q. While we are on the subject of the various Zee channels, you would be aware that there is widespread conversation in the industry today that amongst the top three players – Colors, Star Plus and Zee TV – Zee has been the most prudent when it comes to investments in programming and other facets. Could you give us a broad approach that Zee TV has taken towards content and also towards talent, because we have also seen Zee TV lose its programming heads recently.
Let me first take the talent question. Naturally, when any channel such as ours is successful, people think that it is because of the various individuals. That may be partly true, but not fully. People misunderstand that one individual can make the entire difference. We are very happy for our people who have moved on to three to four times the salary. Today, Star Plus, Colors and Sony Entertainment Television, all have programming heads from Zee. That in itself means that Zee must be doing something right.
Q. And the others are not?
I am not saying what Star or Colors are doing is wrong on this front. But these people and salary driven decisions are driven by three key things – company’s reason, direction and the final objective. Some are in this space for the capital market so that the share price goes up and is at 100 times the investment – so some people today are playing that capital market game. For some people, the owners are sitting thousands of miles away, and they need to show to the owners that they are doing a good job. The objective is different there as well.
The way Zee works is that we are clear that we have to deliver value to our shareholders and stakeholders and on a constant basis. We are not here for six months, one year and go somewhere else. Unless, I sell the company, where would I go? But executive-run companies can burn money. I cannot name the channel, but a few months back a regional channel was launched and they spent so much money and carriage and programming that if I was the chairman of the company, I would have told them that this is never going to make money. So, why are they spending the money if it is not going to make money? For an executive, it doesn’t make a difference – they will move on to another job and at double the salary again. What are they losing? But the bottom-line of what I am saying is that is there anything wrong and right about these things. Success is mostly in hindsight, it is not guaranteed.
Q. At the regional business, today companies like STAR India, too, have spread their footprint nationwide. Does that impact a player like ZEEL, which traditionally has had the strength of its footprint in India?
You should, in fact, study this. I feel happy that not only today, but right from the beginning when we parted company in 1995, since then they have been doing all what Zee has been doing. They are just following – maybe we are doing things right, I just wish to them good luck.
Q. Puneet Goenka, too, was recently made Managing Director. Does this mean any kind of a role change?
No, there is no role change. He was already Whole Time Director and CEO of the company. But now, since the businesses are growing, there are CEOs of sports business, regional business, so there is no confusion. He is the MD and there might be a few CEOs under him.
Q. We have seen many players come in and burn money, and it does appear that the growth of media is not structured. Are there any precautions that you would want to share with the industry people to be careful in structuring this growth to grow better?
I may go out of context here, but this would be relevant to answering your question. Do a dipstick and ask 10 young people why they are doing a MBA or engineering or medical, and in 90 per cent of the cases you will find that they will respond by saying that someone told them that there was a good demand for that subject. Ask ‘why do you get married’, and the response would be ‘what is this question? It is a tradition, everyone does and so did I’. This is similar to what is happening in the television broadcasting industry. Everyone is going in the same direction. There are 450 Indian-origin TV stations and 180 more are pending. So what is happening is that everyone wants to come into this business without realising what the facts of the business are. I had done a rough, back-of-the-envelope calculation once, and it showed that the Indian broadcasting industry is a negative 400-500 million dollars a year. People have to stop and ask themselves why they are doing some of the things that they are doing. All the broadcasters have to come together; they don’t know why they came into this business in the first place. Advertisers and cable operators are together, but we are not. We have to get our act together fast.