Money not enough to succeed in India, Screwvala warns international players

CANNES: Amongst all the India high fives chatter on the opening day of Mipcom, UTV Group founder and CEO Ronnie Screwvala offered a reality check to both Indian as well as international companies on the opportunities and challenges of doing business in India.

Screwvala‘s session with Anil Wanvari, founder and CEO of Indiantelevision.com, was clearly aimed at cutting through the bombast and some of the points he made will have made some really big global conglomerates a tad uncomfortable.

To quote from some Screwvala-speak: "I do believe that in many aspects, many of the multinationals that have come into the country, may not have had the best experience. My question to them for coming in, in the future is always going to be, ‘What‘s your value add?‘ Because India is a very unique market.

"And if you‘re coming in there thinking, ‘Well we can go out there and buy. We can go out there and give large amounts of money and display that.‘ I dont think necessarily, that‘s going to be the way that India is going to welcome that player."

Screwvala took the examples of long invested in India conglomerates like Time Warner (CNN & Cartoon Network), Viacom (MTV, Nick, Vh1), Sony, Pearsons, Kerry Packer (Channel 9), Disney (Disney Channel, Toon Disney and now Hungama) and News Corp (Star) to make his point.

Said Screwvala of Warner, "CNN and Cartoon Network have really not had an India agenda though they have been in India for the last 15-20 years. CNN finally licensed their brand name to a local news channel (Network 18‘s CNN IBN) for as cheap as a million dollars. That clearly articulates a lack of strategy for the Indian environment."

Pearsons (print) and the Packer group (TV) had both burned their fingers in India and in the process burned off $ 100 million each, he pointed out.

Interestingly, even News Corp‘s Star is not as rosy a story as commonly perceived, Screwvala pointed out. Looked at for the period between 1992 and 2007, net-net, the cumulative P&As would not be on the plus side, was Screwvala‘s view. Why? Because between 1992 and 2000, Star was bleeding big time, particularly on the huge investments it made to launch DTH then, which proved a non-starter.

Even Star‘s market dominance of 2000-2005 was one of missed opportunities, according to Screwvala. He believes that not enough was done then to monetise and leverage the dominance Star plus enjoyed then.

His advice to international companies - "Ask the question: ‘What‘s your strategy? What‘s your value add?‘, before taking the plunge."

On the domestic front, Screwvala sees cable as being the single largest bottleneck to the evolution of the industry to the next level. The cable industry would require anywhere between $5-10 billion dollars of investment in hardware if it was to evolve into the new digitalised world and that wouldn‘t happen without regulation of the cable industry, Screwvala stressed.

He remained unimpressed by calls for regulation in other parts of the broadcast value chain though.

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