On the sidelines of the launch of India’s first 2-in-1 channel NDTV Profit and NDTV Prime, Vikram Chandra, Group CEO, NDTV talks about the new channel, paid news, channel strategy, ad revenues, BARC and the way forward.
In NDTV Prime, you have inserted almost all the genres in one channel. Is digitisation the prime reason behind launching such channel?
That is correct. With digitisation, all sorts of niche genres and ideas are going to get traction. If one thinks about which niche channel people would want to watch, it would be auto, gadgets, comedy, property, etc. We thought these are all potential channels to launch, and in this era we anyways are paying huge carriage fee and high distribution cost. Therefore, one launches a channel which one can only afford to launch in carriage which makes no sense. So, let us have one master channel. One channel, which gives people everything they want.
Secondly, for the last four to five years we were not really making the money we should have made from NDTV Profit. The strategy behind the new launch is to take our loss leader and convert it potentially into our flagship channel. We have every reason to believe that with the buzz created and the kind of programming we have, every cable operator will show it. We have every reason to believe that a channel, which was our loss making channel, will become our profitable channel and that will have a massive impact on the business model of NDTV.
Don’t you think this might also curtail your ad revenue, which was possible by more number of channels?
Yes and no. The business model for launching 10 channels is not there anymore, until distribution issues get fixed and carriage fee comes down to a reasonable level. For us, the reduction in carriage fee is a little more than 20 per cent. There is no point in launching six channels. Instead, you create one master channel in which all the genres that people are interested inwill be there and people understand that. The channel has not even launched and we have got title sponsors for every category.
In that case, which genre will you put this channel into and how will you manage the ad flow, as different genres in one way or the other are following ad cap, except news and some music channels?
This channel is going to air news as well. Every hour is going to be news, so I think we will come under the news category and will have to follow the regulations which are followed by a news channel. We will have to figure out the genre and talk to the Ministry of Information and Broadcasting (MIB) on how exactly things need to be followed. My guess is that they (MIB) will be viewing this as a news channel.
Isn’t this a clever strategy to manage the ad cap regulation?
Not at all. We are not planning to have that many ads on the channel. We have title sponsors already. This is not an ad-based channel. We are relying primarily on sponsorships for this. The sponsors are on board. We have already pulled out of TAM and we don’t have TRPs and, therefore, we are not selling on that model in general.
But media planners refer to TAM data even if you don’t…
We are not going to the media planners for this channel. If they want to advertise, they are welcome, but we have more or less recovered spends. Our revenue target has already been met just from the sponsors we have had. If we get ads, it is ok; if we don’t, we will survive. At this moment, we are not targeting advertisers as such. I have a feeling that going forward, advertising is also going to kick in a massive manner, because the channel is targeted at specific audiences who like specialised programming. But at this stage we are focused on sponsors. We had delayed the launch because we wanted sponsors on board.
Are there any special expectations you have from BARC?
TAM has not worked right. We have been telling for a long time that what the industry needs today is a robust ratings system. To the extent BARC provides that rating system, it will be great. We have no reasons to doubt that it will do that.
People in the industry have alleged regularly that NDTV is a Congress-funded channel. What are your views on that?
I think that is a very serious allegation, and I’d like somebody to find any evidence on this. Let someone find even a rupee that we have got in funding from the Congress or any other party. News channels can get political ads on occasion, but to hurl accusations of “funding” without a shred of evidence is ridiculous. I think we need to be a little mature out here. These are serious charges to make. If a particular channel is getting funding from a party, it is a really serious issue. Paid news is a serious issue. If somebody is exchanging money for editorial, he should be found, evidence needs to be gathered, and that person needs to be drummed out of the business. We should take a tough stance on that. But to just sit around and keep hurling empty accusations is the easiest thing to do and is nonsense. I don’t think we should endorse the random bandying around of charges without evidence.
Abhey Kumar Oswal (father-in-law of Naveen Jindal), through his company Oswal Green Tech, owns 14.17 per cent stake in NDTV. What is your view on that?
NDTV is a public listed company. Anybody can buy our shares in the open market without any communication with the company, and that’s what happens with NDTV too. You can question shareholding if someone is put on the Board of the company or is influencing editorial policy or where there is a private placement. But what does any public listed company have to do with someone who buys shares in the open market? Anyone is free to buy shares in the stock market. A company certainly can’t prevent someone from doing so.
How much time you think the issue of carriage fee will take to resolve? Have there been any benefits to the channel post digitisation?
It has started to deliver results, but very slowly. Though here is some improvement in ticking forward, but it is not to the extent we had hoped for. Frankly, it should have happened by now. I feel that digitisation has happened up to a point. What we are struggling with at this stage is the ability to get that extra amount of reduction in carriage fee and increase in subscription. That business model has to be expedited a bit.