Thread Rating:
  • 9 Vote(s) - 2.67 Average
  • 1
  • 2
  • 3
  • 4
  • 5
After Colors, Viacom's rainbow
Rajesh Kamat can’t quite sit still. His mind is on several things at the same time, and it shows. The success of Colors, his first channel as COO of Viacom18 Group — a 50:50 joint venture between Raghav Bahl’s Network18 and Sumner Redstone’s Viacom — has done very well.

Within two years of launch, the channel notched up estimated ad revenues of about Rs 600 crore, or about 20-odd per cent of the total revenues that Hindi general entertainment channels garnered in the year. Extrapolating from the reported numbers for holding company IBN18, Colors will break even by March 2011 on the back of shows such as Balika Vadhu, Tu Na Aana Is Des Meri Laado and Uttaran, among many others.

None of the $14.63-billion Viacom’s earlier attempts in India — MTV, VH1, Nick or even Paramount Pictures — have seen this kind of success.

Kamat however reckons that the “battle is not at brand or channel level, it is at a network level.” It is one thing to have a successful channel, quite another to build a network, a necessity for survival in the Rs 30,000-crore, hyper-competitive, structurally flawed world of Indian broadcasting. A network means better ad rates, more distribution muscle and a larger audience share. That is the reason Star, Zee and Sun have spent a lot of time in the last 15 years building theirs.

To go from the estimated Rs 650-odd crore to a size that matches older rivals, Viacom18 needs to scale up fast — across geographies, genres and distribution platforms. While Kamat doesn’t share specifics, he does reveal there are five pieces to the building-revenue puzzle: mass entertainment channels, niche channels, domestic distribution (read: pay), international (again, pay) revenues and films.

While he doesn’t put a number to it, together these businesses should bring in an estimated Rs 2,000 crore in topline over the next two to three years if Viacom18 wants to be considered in the same league as Zee or Star.

It is building each of these simultaneously over the next three years that is keeping Kamat on edge. The first of several new channels — from movies to other Indian languages — is expected by next year, according to buzz in the trade.

So what is the gameplan? This is where the guesswork begins. Some of the strategy is evident in Viacom18’s recent moves and some is plain common sense.

Take the first two pieces: languages and domestic pay revenues. The rush to break off existing contracts with Sony and Star and form a strategic alliance for distribution with Kalanithi Maran’s Sun Network — Sun 18 — is evidence of Viacom18’s plans to launch channels in other Indian languages.

The most lucrative ones, going by revenue numbers, are Marathi, Bengali and, of course, Tamil. Almost every major network has a presence in each of these languages, plus there are several local players in the fray.

Maran has a virtual monopoly over the South; he owns the leading channels (Sun TV, Gemini, Surya et al), cable operations (Sumangali) and a DTH platform (Sun Direct). An alliance with Sun will ensure smooth distribution in the South for any channels that Viacom18 launches. Revenues from the alliance, however, do not form part of Viacom18, except for its share of the pay revenues from its own channels (Colors, MTV, etc).

On the languages that it will get into, “We are exploring other options,” is all Kamat says. How does he choose them? He reckons that the size of other media in a market is a good indicator. For instance, advertising revenues for Marathi newspapers are estimated at Rs 800 crore. So, that suggests there is enough for a TV channel to nibble on.

The third piece, films, shows up in the company’s reported bid for The Indian Film Company. TIFC, majority-owned by Bahl, was set up as a specialist film investment entity in 2007 and listed on London Stock Exchange’s Alternative Investment Market . It has funded, among other films, It’s a Wonderful Afterlife, Road and Luck.

<img style="float: left; margin: 0 10px 0 0;" src="" />Strangely enough, it has also distributed films such as Welcome and Jab We Met. Though it hasn’t had a great run in the last year or so, the acquisition will strengthen the content pipeline for Colors and for any movie channel (an inevitability) that Viacom18 launches in the future.

The fourth part of the revenue puzzle is international subscriptions. Colors has already launched in three major markets: the US, UK and Middle East. The Viacom connection has proved very useful in getting good deals, especially in the US market. The international bit should bring in about Rs 50 crore, maybe more, all of which goes to the bottomline, since the content has already recovered its cost in the India airing. Going by the Zee experience, this one has a tremendous upside. Zee currently gets Rs 400-odd crore, or about 20 per cent of its topline, from international subscriptions.

The fifth somewhat distant part is getting some of the other niche channels in the Viacom bouquet — Comedy Central or TeenNick — to India, on the lines of what News Corp is doing with its Fox bouquet. In a market where DTH is spreading (20 million homes and counting) there is always potential for pay revenues from these channels.

Does Viacom18 have the bandwidth to handle the issues that scaling up with more channels and geographies will bring? For instance, how will it deal with the paucity of programming talent? Getting Ashwini Yardi as programming head for Colors is what finally made the channel, but can Kamat find more such people in Marathi or Bengali or any of the languages the network may attempt? Kamat agrees that “it is a challenge. But we do a lot of research and that has stood us in good stead.”

That is the stuff that should keep him restless for the next few years.

Source: Business Standard

Thanks given by:

Possibly Related Threads…
Thread Author Replies Views Last Post
  General News: Colors launches AR experience for Bigg Boss on Instagram nairrk 0 401 12-03-2019, 11:06 PM
Last Post: nairrk
  General News: Vh1 India, Colors Infinity to air round 16 of Carabao Cup nairrk 0 371 10-30-2019, 11:05 AM
Last Post: nairrk
  General News: Colors Tamil’s game show based on KBC will be an all-women edition nairrk 0 342 10-29-2019, 12:22 PM
Last Post: nairrk
  Update: Viacom18 revises a-la-carte price of Colors, Colors Kannada to Rs 12 nairrk 0 314 10-14-2019, 12:32 PM
Last Post: nairrk
  General News: Colors partners with UC Browser to promote ‘Ram Siya Ke Luv Kush’ nairrk 0 451 08-19-2019, 07:25 PM
Last Post: nairrk
  General News: Colors Tamil to spruce up prime-time line-up with new fiction show ‘Myna’ nairrk 0 552 06-07-2019, 10:19 AM
Last Post: nairrk
  General News: Viacom18 to launch Colors Gujarati Cinema on 1 June nairrk 0 445 05-29-2019, 07:29 AM
Last Post: nairrk
  General News: Colors Tamil looks to strengthen its footprint in TN market nairrk 0 419 05-08-2019, 10:13 AM
Last Post: nairrk
  General News: Viacom18 to bring Rishtey Cineplex, Rishtey under Colors umbrella from 1 Mar nairrk 0 475 02-26-2019, 09:04 AM
Last Post: nairrk
  General News: ISL S5 to have six language feeds across seven channels including Colors Kannada nairrk 0 784 09-11-2018, 02:58 PM
Last Post: nairrk

Forum Jump:

Users browsing this thread: 1 Guest(s)