As the Joint Venture between Viacom18 Inc and the Network 18 group completes seven years this month, the affable Viacom18 Group CEO Sudhanshu Vats talks about how losing touch with the consumer is what keeps him awake, impact of the Reliance takeover on Viacom18, the emphasis on growing profitability, 2014 being the first PAT profitable year for the group and more. Excerpts.
What are some of the milestones of your seven-year journey?
When we started this journey of Viacom18, there were three channels. MTV, Nickelodeon, VH1. As we crossed our seventh birthday, we’ve got 10 channels. That’s one of the first things that comes to mind. But the fact of the matter is, we want to expand. We’ve also grown quite rapidly. If you look at our CAGR over the years, we have grown at an industry-beating average year on year, even in recent years. This is the first anniversary in which we can say we’ve been PAT positive. In FY14, which is the year which has gone by is the first year of PAT positive. For us as a company or anybody else in the industry, it’s important to grow profitably.
One thing is to grow, another thing is to grow profitable. It’s also our ability to look at M&E as an industry, holistically, where we’ve got presence in the broadcast sector, where we’ve got key brands, leading brands. We’ve also got strong and growing film studio business, therefore there again now we’ve managed to begin the journey of doing films which are not only loved by the people, but also do very well commercially.
We have also begun our journey in experiential entertainment segment. If you look at the three broad segments, I call them broadcast, film entertainment and experiential entertainment. Experiential entertainment is a business we started not even a year back. I’m proud to say there are three or four areas where we have a significant presence already. We’ve got a presence in EDM, which is our brand called Supersonic, it’s in its second year, Goa in December. We’ve another dance music brand, MTV Bollyland, which was introduced last year. But this year we have taken it wider in India and deeper and we are also taking it outside India. We’ve also begun to do live entertainment in theatre. We did kids theatre, Nick theatre last year, and stand up comedy. It has synergies with the areas where we operate. Finally, I think, it’s also in the area of being able to give to people, bringing in live space IPs which exist with Viacom. Like the Kids’ Choice Awards.
Another piece which is beginning to take the right shape, is our merchandise business which is what we call consumer products business. One of the pieces we’ve put in some thinking, is to understand where the country is, where the market is and which are the categories we should be working on. There again, we’ve begun our first footprint. We should be able to consumer franchise worth about Rs 100 crore or plus this year.
What is the toughest challenge you have faced so far?
M&E is such a dynamic industry. What keeps me awake or worries me, is losing the ability to keep in touch with the consumer. Because the viewer or the consumer is evolving so rapidly. As an organization, the day we stop connecting, we have a problem. I keep reflecting, do we have the right culture, do we have the right people, do we have the right processes, do we have the right DNA in a manner of speaking which is more enterprising, so that we are constantly in touch, so that we are able to move with them if not a little ahead of them? Are we managing to stay with the curve?
What has been the impact of the Reliance takeover on Viacom18 group, given the various exits we have seen across properties?
I will limit my answer to Viacom18. We are delighted that we have new partners on board. Reliance is a very large company. They want to play to win. To that extent, we are fortunate to now have two partners, which is Reliance and Viacom. Both of them bring complementarity in thinking and thought and skills, it makes we are better poised as Viacom18. Because of the winning streak, the resourcefulness, the ability to play things on scale.
Will we see an introduction of new channels soon given the fact that STAR and Zee have been much ahead of the curve when it comes to introducing new channels ?
You will see…we should be able to offer the right things to people as we go forward.
Which genre are you looking at ?
I will not define that. Basically strengthen our presence in the genres we are in.
Viacom 18 has been extensively using data insights and sharing it across the group could you share any particular instance where these data mining and the subsequent insights has helped refine a particular process?
The first example I want to give you is on our journey in Colors. Of late, we were looking at how to reinvent our strength in fiction. We said let’s understand where did we come from. Let’s understand what the consumer is looking at. And let’s see what we are offering. We found one clear gap, which is now plugged. If you look at the genesis of Colors, it was on what we call social programming, which had at its root an idea where you were questioning strong social beliefs. The recent programme we brought in this space is Udann, four or five weeks of its launch, it’s in top 10.
Another example is our franchise or products business, we’ve put a lot of work in seeing which way is the market moving. How is it moving from a kirana store or a mom and pop store to organized retail. There’s also a more recent phenomenon of e-commerce. How do we then dovetail this piece along with what are the growths in each of these categories is in each of these segments. Categories like back to school, apparel, toys and then in that we’re saying where do we play. The journey we have begun is a fantastic start.
What do the next seven years look like for Viacom 18?
Our vision is to be the most admired media and entertainment company in this country. We want to continuously grow more profitable and faster than the market. After seven years out, we would have a broadcast network much bigger, we should have a studio which is thriving and continues to build on what it is already known for. We build businesses which build our ecosystem. The ones which have made the foundation these will be businesses which will become significant and which will be contributing. We would be the preferred destination for a lot of new platforms, digital and all. They are already making progress in that. We should be able to play on all screens in a formidable fashion. Finally, I would still like to retain the fun of Viacom18. People come to this place because they love to come to this organization. They enjoy and live themselves to the fullest.
What are your thoughts on the BARC deadline being extended?
First of all about BARC, it’s appropriate that Partho (Dasgupta) or Punit (Goenka) talk about it. But I’ll give you a broad perspective. It was a very ambitious deadline. But I must add that there is a lot of progress that is happening. I can see it myself and there’s progress which is happening on all fronts. Are we going to see measurement from BARC soon? The answer is yes. When that soon is? That’s Partho and Punit for you. But I can tell you there’s progress happening on every front, all the partnerships have all been now defined and fully seen. There are pilots which are in place now as we speak. We’ve got partnerships for meters, so key guys doing that work. We’ve got the key constituents on who will be empanelling, who will be second up the panel, who will be designing the panel, who will be measuring, all that work’s happening. It’s happening at a rapid pace. Yes it was a very ambitious deadline, I had said that in the beginning as well. I think you’ll see some results very quickly.