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Businesses are not built in a day: Sunil Lulla

Businesses are not built in a day: Sunil Lulla

Author | Srabana Lahiri and Priyanka Mehra | Thursday, Jan 05,2012 7:56 AM

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Businesses are not built in a day: Sunil Lulla

In India’s rapidly expanding television space, the Times Television Network could be called a new kid on the block. But it is definitely a smart kid that has managed to win over a substantial chunk of viewers in its channel categories, that too without a single soap.
It may not be big in terms of size – barely Rs 400 crore in an industry estimated at Rs 30-35,000 crore – but the man at its helm, MD and CEO Sunil Lulla, is confident that size does not matter just now; building strong brands and profitability come first. “Businesses are not built in a day,” he points out.

As of now, Lulla is content grooming the channels that make up the TTN network – Zoom, Times Now, ET Now and Movies Now – owned by the Times Global Broadcasting Co. Ltd. “For a profitable, enduring, sustainable enterprise, it is very important to decide what we focus on... and where we stand today,” says Lulla, adding. “We have built strong brands... power brands... and the proposition of the Times Group is to have sustainable brands that stand on their own over the years and have a competitive edge. Today, our brands have that and that’s what we are doing.”

He points out that the Times Television Network branding has been created to bring synergy and understanding of expectancy when one deals with a customer or a constituent.

Success at a cost
“In our country, the cost of TV viewing is only 50 paise per hour of TV per person. Globally, people pay Rs 10 – 20 times of what you are paying – for the same content,” rues Lulla.

The first network channel to roll out - when it was still under Bennett Coleman & Co - was Zoom in September, 2004. It was positioned as a glamour product, with some elements of Bollywood and fashion. It was later migrated to a strong Bollywood position and has done well ever since. Times Now came in January, 2006. There was great competition, as it was challenging the 1988-born NDTV - then the leader in the category – and CNN-IBN, launched just a few weeks earlier. Though the starting year was not spectacular, Times Now has become the leader in its genre. ET Now was the third channel to roll out in June, 2009, facing significantly higher competition because of CNBC’S legacy value and it being the bellwether globally for a stock market channel. “It’s taken us more time to build that presence, but we’ve got there. It has been No. 1 by and large for over a year,” says Lulla.

Then came Movies Now in December 2010, “designed to surprise the marketplace”. A year down the line, it too is a leader in the English movie channel genre.

But is profitability easily achievable, considering that TTN still operates in the niche segment, with English news, business, movie and Bollywood channels? Lulla is quick to retort that TTN can’t be called niche because it reaches out to 100 million viewers. “I don’t think that is niche. These are all multi-crore businesses and there is nothing niche about them,” he maintains.

“Today, we are in 26 other countries besides India. We are in America, Canada, Taiwan, Africa, Singapore... We still have Europe to do, so let’s leave some work for 2012.”
So how does he go about creating a good topline? “You must have a competitive advantage in monetising your content. You have to have good brands, and the ability to create an environment for which people will pay. So we always launch channels that have subscription. We don’t do free-to-air channels - doesn’t matter if it takes a little more time to make the money, but we will get there. In a pathway where capacity is available, I am not saying that carriage fees will become zero, it’s not fair to expect that, but in time, they will reduce dramatically and you will have the power to say I want to charge so much for my brand if you want to see it.”

Is a GEC cooking?
Going by viewership numbers that decide ratings that bring in advertisements, we decide to ask whether the TTN bouquet should include a high-viewership General Entertainment Channel (GEC), Hindi or regional language channel to build scale for the business. Lulla’s first reaction is cryptic: “That’s like saying that in every cuisine we serve, we must have potatoes.”

But why not potatoes, if people the world over consider them a staple food, and pay good money to buy them? His second reaction gives more away: “Businesses are built over a long time... so how do you know we don’t have that plan?”

So how soon can one expect a GEC from the network? Lulla says, “We will certainly expand. We will do it when we believe there is a pathway of profitability. The biggest detriment for any new channel to be launched is the operating cost of TV. We have invested a lot of money in this business. We would have liked to spend less, but the infrastructure to build a good television operation costs money. It always pays off, obviously, though the reality of India is that distribution is becoming unnecessarily and prohibitively expensive.”

Though the network began with STAR India as a strategic partner for distribution, it now has a JV with Yogesh Radhakrishnan, a veteran in the cable & satellite industry, to form Media Network & Distribution (India) Ltd (MNDIL). Prime Connect, an independent distribution platform launched by MNDIL, distributes the TTN channels.

More value & space
According to Lulla, the Rs 30-35,000 crore television industry deserves to be more than worth a lakh crore, the price for content must go up, and the value for content must be driven... “TTN has come from a 30 million household TV base to a 100 million household base in 7-8 years; I don’t think advertising has grown that fast. The economic bar is just not 100 million homes; it is the value we derive from the 100 million homes. Our ad revenues haven’t grown in line with that,” he observes.

Talking of advertisements on television, how does he react to the new uplinking and downlinking policy that allows the government to revoke licences after five violations of the Programme and Advertising Code? “When a notice is given, a channel is asked to explain itself. Usually, channels that have explained themselves till date have been heard and life has moved on. So violation is not a show cause notice. This is only about violations that are proven and not about violations that have been addressed and where the channel has explained itself. Sometimes the allegation itself may not be right. Having a framework in which you are supposed to operate is absolutely fine,” he says.

However, he refuses to comment on the Supreme Court upholding the Rs 100 crore penalty imposed on Times Now for wrongly showing Justice PB Sawant’s photograph in a report on the Ghaziabad PF scam. There are reports that TTN plans to file an appeal.

Meanwhile, there is this whole debate about self-regulation and whether to have a regulatory body in the broadcast sector. While news and entertainment channels have started with self-regulation rather well, it is still an evolving space. “The News Broadcasting Standards Authority (NBSA) and Broadcasting Content Complaints Council (BCCC) have acted in good faith, and worked well with the television businesses. The news business has issued frequent guidelines on managing certain events, which have been appreciated by the Minister of Information & Broadcasting, Home Ministry and many states. So it means the principle of self-regulation works when the principle of self-regulation works, allow it to evolve and it will always improve itself. The Ministry has some form of regulator because licenses are only given by the Ministry and they set down terms and conditions,” Lulla says.

As vice-president of the Indian Broadcasting Foundation (IBF), Lulla has to work closely with people who are otherwise his competitors. But he says the IBF’s initiatives are towards a better and stronger industry, “and an environment in which you leave competition out and collaborate”. “Outside the IBF, we are all very aggressive competitors, but we are also very, very strong collaborators. My boss at the IBF, its president Uday Shankar, says it is social work that we do. The IBF gives members an opportunity to contribute to the industry. We have many initiatives – be it digitisation, or the formation of BCCC or a very important survey done about what people think of television. We are hosting a festival for television in 2012. Prime on our agenda is driving the economic value of this industry,” he adds.
 

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