Ronnie Screwvala, Founder & Chairman, UTV Group, was definitely not at loss for words when he addressed the entire team – TV Content, Motion Pictures, New Media, Bindass and World Movies and Hindi Movies Channel and UTVi Business, and at India Games, Ignition and True Games; as also staff at Finance, Ops, Legal, BD, HR and IT departments – in an internal email (a copy of which is with exchange4media) recently.
The first para of Screwvala’s mail set the tone for what was to follow. He wrote, “When I sat with about 90 of you, in November 2007 at Sahara Amby Valley – where we revealed our aggressive growth plan for all of 2008 and 2009 in Movies and TV, along with our entry in Broadcasting and New Media, and our further consolidation in Gaming, – I did sum up the first day session by saying ‘2008 is going to be our toughest year till date’… to many there, it seemed strange… as here we were embarking on such ambitious plans, with teams in place… but it was that precise reason that I shared a word of caution… as also that the ‘bubble’ in media, the stock market and elsewhere was crossing its limits. But I don’t think anyone, including myself, anticipated the carnage to follow… and just how bad it would get.”
He then went on to take stock of the achievements of different operations of the UTV Group in 2008. This included – Broadcasting – Entertainment and News; TV content; New Media; gaming (Mobile/GOD, console gaming, online gaming); and motion pictures.
Giving his views on the world, India and media and entertainment in 2009, Screwvala said, “We clearly have not seen the worst, it’s yet to come. The US, with its multi-trillion dollar economy is not going to be wished away – nor marginalised – and so its recession will have a world impact. All eyes are on India, Russia and China – and for that my views are that China will make it – as while it grew its position of ‘Exporter’ to the world, it also took strong steps to build a large domestic market and being one of the largest destinations for foreign direct investment. India, I am afraid, has many challenges. So, it’s going to be quite a while and a lot of affirmative action before it can be benchmarked with China. Russia – again has stepped a little into political oblivion and it’s just not got the power as on economy.”
Speaking on India at length, Screwvala said, “It’s an Election Year, and we have an enraged youth committing to vote for the first time – which is great – but the outcome, therefore, is uncertain and enough to have a cloud over most things till May/June 2009. Stock markets are not the best benchmarks for the economy – but unfortunately it does dampen sentiments and growth. Real estate, retail, banking were serious growth drivers for the service economy – and so, its acute slowdown, coupled with overall consumer spending down, will have its impact.”
Commenting on the media and entertainment scene he said, “Demand for the right kind of escapism will increase and so Gaming and Movies will be substantially recession proof. Movies, however, will be more dependent on ancillary revenues and less on Box Office – so a slowdown in Broadcasting and Retail will affect overall revenues. In India, the recession for the movie industry will come in by mid-2009 – and more movies will not see a release.”
“Mid-term, this will be positive for the industry and in the short term, only those that have distribution and release locked in pre start of production will see it through. But the successful movies can actually get bigger and so, the slowdown effect will be felt by many, but not felt by a few at all,” he observed.
He further said, “DTH could be the savior in 2010 as we could have 20+ million DTH homes by then – proving to be a good source of income for broadcasting. Internet advertising will grow – also because it’s much more measurable and second to that will be radio. Many newspapers world over have announced that in a year or 18 months they will discontinue in physical form – and so I see print advertising declining and could be a long term decline.”
Disruptive Thinking and Multi Tasking
“Lastly, running your business, or doing your job the way you were in 2008, will marginalise you – and those thinking with conventional wisdom or just saying ‘but that’s how it’s done’ is in for more than a rude shock. In short, 2009 will only belong to the disruptive thinkers and implementers and multi-taskers,” he cautioned.
Screwvala clearly stated, “The buzz phrase for 2009 is disruptive thinking and multi-tasking. TV content will consolidate its Air Time Sales model and scale up South TV production and in TV content, we will do less for more – big concepts or ideas and formats and own IP. The challenge they face is that broadcasters will spend less for TV content.”
He added, “New Media has to build UTVi.com and Techtree.com and firstname.lastname@example.org into leadership positions and a profitable business model around it. UTV as a serious player in Internet has to be delivered early in 2009. Their challenge is – focus and top of line content offering.”
“Bindass.TV and Bindass.ground and Bindass.com have to arrive as accepted youth brands. Their challenge is .ground and .com are start-ups and they need to consolidate their positions in TV rapidly and win over perception,” he added.
Enumerating the other challenged in the year ahead, Screwvala said, “Liquidity will be a challenge for all in media and at UTV, it will not be an exception. Half our business are in investment or start-up mode in 2009 – and the ones that are not also guzzle cash for growth. Cost of finance, a real cost will need to be factored in all our verticals.”
He concluded by noting, “2009 will be a year with its fair share of pressure and stress. We are slated to grow 75 per cent this year over last year (and that was an 80 per cent growth over the year before). The sensible, but not appropriate, step would be to slow the growth and rationalise – but the truth is the momentum was set in early 2008 and so it is not down scalable. But I think we have all accepted this challenge and are preparing ourselves for ‘stretch mode’ on many counts. Now, the key is to feel exhilarated about it and hopefully have some fun doing it and knowing that the final outcome will be well worth it – especially, when things get to a new level in 2010. Once again – 2009 is a year of disruptive thinking.”