Happy 10th Birthday Viacom18: The rise and way ahead...
Clocking a 40X growth in the topline over the last 10 years with five diverse business lines, Viacom18 has turned out to be one of the fastest growing media entities
Published - 20-November-2017
Reaching out to 80 countries through 44 TV channels, having five diverse lines of business that engage with 500 million consumers, Viacom18, a 50-50 joint venture between Reliance Industries-owned Network18 and Viacom Inc, has turned out to be one of the fastest success stories in India’s media and entertainment industry. It has reported to have a 40X growth in the top line during first 10 years of its existence in India. The company has its presence everywhere—TV, digital, cinema, merchandise and live.
Talking about its ‘phenomenal growth,’ Anupriya Acharya, Group CEO, Publicis Media India added, “This is especially commendable since they are a (relatively) late entrant and have only been around for about a decade.”
Sudhanshu Vats, Group CEO, Viacom 18, described them as ‘fantastic 10 years.’ “We have grown 40 times in top line in those 10 years. In the last five years, we have been PAT profitable as well. Most importantly we have built an organisation which has a heart, soul and mind,” said Vats who joined Viacom18 in April 2012 and steered the company into profitability across all lines.
Profitability comes from their strong dependence on advertising which has relatively reduced from 75 per cent five years back to 60 per cent. Vats further emphasised on that and said, “Our film business has also grown considerably. Our subscription revenues have grown. We have now added these new businesses which contribute about 3-5 per cent of our current portfolio. With our portfolio as well, we have managed to reduce our dependence on one channel and brought more channels overall. Moving ahead we would like to keep balancing the portfolio and would like to see 50 per cent coming from outside advertising. I see 10-15 per of our revenue cent coming from our new businesses between digital, consumer products and live and 12-15 per cent from Viacom18 Motion Pictures.”
As the company completes its glorious decade in India, we look at its successes and the reasons that helped it not just survive in this competitive market but thrive.
Launch of GEC Colors
Barely eight months in the business, Viacom18 launched a Hindi GEC called Colors which revolutionised the market with its right programming mix of popular reality shows. Led by Rajesh Kamat (now managing director, Emerald Media (KKR & Co’s Media platform,) it was introduced in the market with the tagline ‘Jasbaat Ke Rang.’ Buzz was created with huge investments in marketing campaigns with right targeting. Their target audience were housewives aged between 25 and 45, youth and male Indian population.
“2007/ 2008 saw the launch of multiple new GEC players; which meant that with the GEC space expanding, the existing players were also aggressively trying to defend their positions. Given the scenario, we felt if we were to have any chance of success, we would have to launch a multi- pronged attack using 3Ds – Differentiation, Disruption, Distribution,” said Kamat.
Explaining what made people switch to Colors leaving their loyalties behind, Kamat said in a time when escapist saas-bahu shows ruled the roost, they came in with differentiated social dramas like ‘Balika Vadhu’ and ‘Uttaran.’ “With ‘Khatron Ke Khiladi’ and ‘Bigg Boss,’ we disrupted the prime time which was then dominated by soaps and dramas. While we had the right content, we had to make equally sure that our content reached its audience. Back when we launched, those were the days of analogue distribution where the placement of channels really mattered. Hence Colors launched with a neighbourhood strategy, wherein we were tactically placed right before or right after a leading GEC channel,” he told e4m.
With a good value proposition along with right distribution strategies, Colors escalated from 9th position to 3rd within three weeks of its launch. Since then it has disrupted the leadership ladder and is always one of the main contenders for the top spot in the viewership share. Ashish Bhasin, Chairman & CEO South Asia, Dentsu Aegis Network, credited it to their understanding of the market. He said, “They obviously had a strategy and understanding of what the market needs were and executing and implementing it well. That was the key. Ultimately for any channel to succeed or fail the critical thing is the content. It’s easy to launch a channel with great content for the initial period and then figure out later on. What’s hard is to continuously sustain good quality content. I think they managed that pretty well. They got the consumer’s pulse and were able to deliver it right.”
What worked in its favour were its experiments with formats whether it’s supernatural ‘Naagin,’ or the voyeuristic reality drama ‘Big Boss’ or star-studded thriller ‘24.’ There were times when it failed. The second season of ‘24’ and ‘Kavachh’ failed in TVR game, but the GEC always managed to be at the top of its game one way or the other.
Also from brand perspective Jagdeep Kapoor, Chairman and Managing Director Samsika Marketing Consultants, felt that Viacom18 through its strong brands like Colors has been able to fill a gap in market for aspirational entertainment. He said, “Colors, as an example, has been able to enter minds and hearts of Indian consumers through its programming and strategically move them away from occasional viewing (consumption) to regular viewing.”
To conclude, Kamat said, “With the 3D’s we broke the monotony that was setting into the Hindi GEC space and came in with new content, new faces that viewers did not associate with any another channel or programme. This effort to be distinctive and fresh was appreciated by the viewers and the rest as they say is history.”
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Sharpening its regional presence
Looking at the regional space, Viacom18 had foresight of its potential, back in 2013 when it initiated acquisition in Eenadu TV’s (ETV) regional GECs followed by extending Colors branding to its Marathi, Gujarati, Kannada, Bangla and Oriya counterparts. Kannada space did well for them which led them to launch the second GEC called Colors Super. Acharya praised its acquisition strategy. “The ETV channels gave Viacom18 an instant fillip in the regional entertainment space. Rebranding these channels to Colors only strengthened the brand and gave it further appeal. Regional markets, as we know, are the fastest growing today for both print and television,” she said.
The focus on this portfolio is only set to strengthen further with the launch of Colors Tamil early next year. With the market already packed by extremely popular Sun TV and other competitive players like Star Vijay, Zee Tamil and KTV among others, it will be interesting to see how Colors Tamil holds on its own. Vats agreed that Tamil is a challenging market but he promises the channel’s entry to be ‘very innovative and disruptive.’ He gives his word, “It will be big and new to that market. We are hopeful that the audience likes it,” he said.
Popularity of kid's channels
Even in kid’s cluster, Viacom18 scored with popular channels like Nick and Sonic which can be attributed to its popular shows like ‘Motu Patlu’ and ‘Shiva.’ The entertainment company leveraged the popularity of kid’s properties (‘Ninja Hattori,’ ‘Peppa Pig’ and ‘Motu Patlu’) to strengthen its consumer product business. Till last November, its kids cluster had a CAGR of 50 per cent in that business itself. Then Viacom18 tapped into animation industry with its maiden 3D animation theatrical ‘Motu Patlu King of Kings’ which reportedly made Rs. 4 crore.
Tapping into digital
Digital frontier has turned out to be a tricky game with huge investment on AVOD platform Voot’s content and marketing. Launched last year, its originals, with few exceptions, had lukewarm response. But interestingly enough, what worked for it were catch-up TV and exclusive show extension properties like ‘Unseen Undekha,’ ‘Cutless’ of ‘Bigg Boss,’ ‘MTV Splitsvilla’ and ‘Voot Kids.’ Voot claimed to have amassed 70 million views for ‘Bigg Boss’ in its first 10 days. Now Viacom18 is planning to take it behind pay-wall mid next year.
Successful cinematic foray
Viacom18 Motion Pictures, one of the first studio-model-based motion picture businesses in India, has given Indian cinema some standout offerings like ‘Toilet-Ek Prem Katha,’ ‘Margarita With a Straw,’ ‘Queen,’ ‘Bhaag Milkha Bhaag,’ ‘Kahaani’ and ‘Gangs of Wasseypur’ among others. According to Rahul Kadbet, Head of Programming, Carnival Cinemas, the production house has mastered the art of filmmaking despite challenging its conventional norms. He credits the success to Neeraj Goswami, VP, Sales and Distribution. He said, “A dynamic and result-oriented professional in the business of distribution in the movies business, his vision towards the distribution strategy only made it possible to achieve this kind of success.”
With its recent entry into regional languages like Bengali, Marathi, Punjabi and down South, Vats informed us that the industry will see more movie productions in these markets.
Merchandising and more
Looking at its merchandising business, Viacom18 Consumer Products with its 30+ brands across 14 brands has crossed Rs. 200 crore in retail sales in India according to media reports. Vats has aimed to make it the favoured house for consumer products in the country.
When it comes to IPs, Viacom18 has managed to reach a million consumers through impactful large format live properties such as Vh1 Supersonic, MTV VMAI, Nickelodeon KCA, Emerge, MTV Xtreme and Comedy Central Chuckle Festival among others. Vats shared that they are continuing to invest in creating new IPs across genres.