Imagine TV is the second time when Turner Broadcasting System is experiencing the high risks involved in the hyper-competitive Hindi general entertainment genre. The previous experience was in the form of Real, which was shut down in 2010. Even though Imagine TV was not delivering for Turner for some time now, its decision to cease the channel’s operations, as abruptly as it has, sent out a shock wave through the Indian broadcasting fraternity.
Industry sources estimated that Turner Broadcasting would have incurred a loss of at least Rs 400 crore for just keeping Imagine TV alive for the past two years. Add to that the investment at the time of buying the channel would have worked to a cumulative amount in the vicinity of Rs 1000 crore.
While it still remains to be seen what is the kind of setback this poses to Turner in India, the global broadcaster is facing two key questions right now – what is its approach towards the 150 people whose jobs will be impacted with this decision and the existing relations and contracts that Imagine TV has with advertisers, TV production houses, actors, etc.
The 3-way strategy for Imagine’s employees
Siddharth Jain, MD – South Asia, Turner International India said that Turner was conscious of its responsibility towards Imagine employees. He explained that Turner had absorbed a few of the Imagine TV staff in the Turner system that has businesses in genres such as kids and English general entertainment. Some members form part of the transition team that will negotiate all existing contracts to ensure dues are paid and contracts are settled. And for the remaining, an external HR outsourcing firm has been employed to assist in finding placements.
Even as Turner is still in the process of speaking to employees in this three-way strategy, it is understood that as of now, only five have been earmarked to be absorbed in the Turner system. The transition team that will work for the next six to seven months would comprise another 10-12 members from sales, legal, finance and departments such as content. This still means that a sizeable number of 133-135 would be left fending for new jobs.
Jain explained, “We are giving them their dues as per the individual contracts. Leaves that can be encashed, gratuity, and the standard policy of two plus two, where you get paid for two weeks of every year you have spent with the company and two weeks of bonus, will also be given to all employees.”
He informed that even at an industry level, Turner’s senior management has connected with other broadcasters. “We are not the only ones who are posed with this challenge,” remarked Jain, and added, “Organisations have faced it in the past and in those cases, Turner had stepped up to assist in any form and we have similar response from the industry in this case too.”
All existing contracts will be addressed
For now, Turner International India’s Chief Content Officer Vivek Bahl would be a part of the transition team that is working towards honouring and settling Imagine TV’s existing contracts. Even though Bahl’s role with the company was not limited to Imagine TV, it still remains to be seen how this development will impact his stint with Turner given that Bahl’s core competence is in Hindi general entertainment.
Turner officials will soon begin the process to settle the various contracts the company has. The company will observe all statutory requirements and regulations both, in India and its international contracts that accompany closure of a channel. For this period, Imagine TV would be telecasting reruns.
“We intend to go through all the commitments that were made. Even as we would be terminating the contracts legally, everything would be done in a professional manner. We have on-going relationships given our other business interests, and the transition team will work on arriving at mutually amicable settlement in each case,” said Jain.
Shutting down Imagine TV was a “business” call
Venturing into general entertainment had signalled Turner’s intention to invest heavily in India. The broadcaster that dominates the kids’ genre and enjoys significant presence in the English entertainment and international news domain had seen general entertainment as its next level of growth in India. Jain explained that despite Real and Imagine TV experiences, Turner would not allow its growth plans in India to be limited to any genre in future course.
He said, “The spotlight is on India and it would be continue to remain so. It is a strategically important. Market dynamics in India have changed in the last five years. General entertainment and sports are big bucks and the gestation period of turning around channels have changed too. The barriers of success are going up and revenue sources are not growing in the same way as cost. The biz part of showbiz is becoming important.”
Specific to Imagine TV, he explained that the channel was not a distress asset and was performing well under a seasoned and professional team when Turner had decided to acquire it. He added, “We had bought into the vision and we committed to fund and run the channel supporting it with anything that was required. While we cannot pin what went wrong to any single event or department but what we lacked was consistency of performance or a big hit. The vision was not matching the performance, and in every forecast, there was a gap between expectations and delivery.”
Jain cited the Turner’s strict financial discipline and the fact that it was answerable to shareholders as one of the reasons why Imagine’s business viability was questioned. “After a point, it was a business decision and we couldn’t see a path of return. In the last two years, we have been committed to making Imagine work. Finally, we had to take the tough call.”