Interview with Nimbus Communications Ltd executive
chairman Harish Thawani
aim to be a billion dollar company by 2010"
Posted on 20 June 2003
When Harish Thawani
announced he was handing over day-to-day management of Nimbus Communications
Ltd (the company he incorporated in 1987) to Akash Khurana, it was
met with two sorts of reactions. Most said that Thawani was not
the sort to let go and there was some bigger strategy involved.
Others said that Harry (as he is known in the corporate world) could
afford to take it easy having made a killing on the cricket World
Thawani is more out of the country than in at the moment, mostly
in London but he found time to speak to indiantelevision.com's
Thomas Abraham at his Mumbai office while in the
process of "clearing out his desk" as it were.
Thawani says he has little to do (at least as far as India operations
go) now that the company affairs are being managed by Khurana and
his team. In a freewheeling conversation, Nimbus' executive chairman
covers a wide range of issues and puts the record straight on his
plans for the future.
First things first. About your handing over charge to Akash
(Khurana). There seems to be a feeling within the industry that
you have some deeper strategy at work here that will get revealed
in due course. Your comment.
Well, let me start at the beginning, which is what are we setting
out to do? We want the focus to rest on being the first Indian transnational
company. Then we want to be a content company in the horizontal,
vertical areas, which are television, sport, music and motion pictures.
These are the four big drivers of the media and entertainment industry
in terms of content.
Financially, we have set ourselves the target of being a billion
dollar company by 2010.
Now, the question is why the billion dollar number and why 2010.
We have seen over the last two years of our growth that if you are
operating beyond just the home borders, then you are basically saying
that a billion-dollar company has an insignificant share of the
world market. I believe it is possible for Indian media and entertainment
companies to build a sizeable business share. Not just us but other
Indian companies that are looking beyond our borders will also develop
I believe we are far ahead of anybody else in India in the content
space in terms of being able to create best practices, transfer
knowledge to individuals across the board and have processes that
drive them. A lot of time has gone in that over the last four-five
years and I dare say that at times it has been at the expense of
growth. This has obsessed us.
I think that we have arrived at that stage where we are saying,
'now we are set'. We have got the processes, people in place. I
think that we have understood the media and entertainment business
from the content perspective better than say, five years back.
And now you are ready to leverage that. Is that it?
We have been a good to decent content television producer for
ten years. While we have had some spectacular highs we haven't had
sustainability. We have had good beginnings in our motion picture
business in terms of awards. It is Akash's leadership and his vision
that creatively drives movies. So why not produce two movies in
our first 18 months in the motion picture business.
I am emphasising the movie business because it has potential for
explosive growth for Indian companies. Our movie making skills are
not far behind the developed nations so to speak. So the journey
for us as a company is to create a sustainable good product and
be able to develop a global market mix for these products.
In recognition of that we identified that therefore we require
strong leadership and strong focus on creatives. Sometimes we have
lacked that focus. Our first number one show in India was in 1993.
Our first show for Indian television was (Superhit) Muqabala.
For five years it was the number one show in the country both by
way of ratings and grosses.
Why did we not sustainably build on the back of that? Because,
sometimes you become too focussed on sales and profitability.
In 1998, we made the first primetime TV soap opera in the country
called Shakti. It was a raging hit. We replicated that and
it went into Kannada, Telugu, Malayalam. We produce 18 daily soap
operas and are the second largest producer here after Balaji. With
all due respect to Balaji, their model was replicated on ours in
the South but they built on that and they went quickly into the
Hindi market, which we did not do. We did not do so because our
creative skills at that stage in Hindi were not focussed on making
products for the cable market. There was no driving leadership on
the creative end in the company.
Is that where Akash comes in?
Akash has been here for many years. But he was more in a developmental
role for motion pictures, overseeing television a bit, setting up
training processes. We had not given him the mandate that we truly
believe that the growth area for us is going to be content which
is sustainably delivering results. Therefore creative leadership
is important. That is the recognition we have arrived at over the
past 12-18 months.
The decision for Akash to take over is not something new. We have
been planning that over the past 12 months. The commitment I had
was that I would see the World Cup through because that was a huge
step forward for us in terms of business growth.
Because we have been involved with so many aspects of the World
Cup be it event management, TV production for Sony, global distribution,
sponsor services, airtime sales in India, it has been very rewarding
for us. We have not yet heard a word of criticism from this event
from the commercial part. The administrative part was also brilliantly
handled. I have not heard one word about anything that was not world
class or that went wrong. That was my internal commitment, which
I successfully fulfilled. I look back at that as good corporate
governance, which is building value for shareholders in a company.
movie business has potential for explosive growth for Indian
at Century City, Los Angeles
Akash's vision is that we have a slate of eight films, which are
fully scripted, financed. We are now in the process of casting and
contracts before we launch them. They range from Hindi, Telugu and
what is called crossover. You have pure international films made
by our wholly owned subsidiary abroad.
Personally I do not have the ability to lead a content creation
team on the motion picture side. Sure we understand genre and what
works but I am not a writer. I cannot lead writers. That is not
a leadership I can bring to the table. No matter how good I am at
understanding distribution, exhibition, if my product is not right
then my friends in the distribution trade will say sorry but there
is nothing that I can do.
So having opened up distribution doors internationally we need
to take the content forward and I believe that the eight films have
the possibility of having hard product impact.
Similarly when you look at music. We have a distribution alliance
with Sony music. We have got a good distribution company. They are
a major in the world and in India. Nirvana Music's products have
so far been excellent. The soft launches have gone well and we have
to build on that. It comes back to creatives.
Even if you look at sports the next challenge in that sphere is
going to be in the area of creatives. How are we going to produce
good television because television drives sports.
three years, Akash will take over as executive chairman and
he grooms the next chief executive for Nimbus"
exactly will your role be now?
The best way to build a business is to identify what the core competencies
are, differentiate between a shareholder, a chairman, whose role
is far more strategic, and a chief executive. We felt that my stepping
away and Akash taking over frees me to focus on corporate strategy
and keep learning from global majors.
has strong creative leadership, which we need. At the same time
we do not want to be creative without the customer focus. Akash
also understands marketing. Akash also has a doctorate in HR management.
He has the people focus, creative knowledge and yet he is the head
of marketing in a large Indian corporate. This is a dynamic combination.
let me take over the implementation of strategy, the delivery of
vision. Let me focus on corporate strategy and let me take my theoretical
knowledge of the international markets as a string relationship
that we have developed over a period of time with people and companies.
Which then gets translated into strong commercial relationships
and see whether we can deliver upon our 2010 vision of being a billion
dollar transnational company. Maybe even earlier. Let me see if
I can collapse that.
clearly this is going to require more business leaders in the company.
Digvijay Singh will run the sports business, Akash Khurana will
run the content business which have a domestic core both in terms
of the consumer market and the creation process. We are scripting
an international movie out of India although we are hiring writers
from across the world.
international motion picture company is now going to be based in
London. We are in the process of obtaining regulatory approvals
for this. That is where my focus is going to be. Let us develop
the alliances, relationships in the international markets for a
product. If a product wants to go global we must have the ability
to create distribution and exhibition alliances across the world.
That is my immediate focus.
the same time there must be a holistic corporate strategy we are
building on. So there are separate strategic and operating rules.
Eventually the shareholders role will be separate from the management's
role. In three years, Akash will take over as executive chairman
and he grooms the next chief executive for Nimbus.
international motion picture company is now going to be based
in London. We are in the process of obtaining regulatory approvals
The motion picture company is close at hand and we have already
identified a president for the company. When we create a distribution
play in the next twelve months we will announce a chief executive
for the global distribution business.
We see the business operating as Akash Khurana chief executive
Nimbus India. He is the creative leader and company leader for the
parent company. The Hindi cable space is Akash's challenge and I
am sure that he will deliver on that.
The distancing of me from these operations has good positive and
negative reasons. The agenda is strategic and has involved a series
of complex moves. What you see is what you get. I am not selling
out my shareholding. I know that I will be required to dilute my
shareholding at a more strategic point for the company but it is
not going to happen in the next few months. It will be at the time
when we go for a distribution play.
For sports we have a whole distribution network both domestically
and internationally. For me the strategy is to internationalise
the business, contribute to corporate strategy and make sure that
we have international distribution alliances. For the next 12-18
months that is going to be our entire focus.
With the World Cup behind you, at least on the sports front
you will have a relatively quiet period ahead of you, is it not?
So what if the World Cup is over. Does nobody understand
that, yes the World Cup is over, but we are doing four major ticket
events this year? We have three home series productions to do including
the Under-19 Cricket World Cup. Sri Lanka wants us back. We are
evaluating their offer.
We've been signed on by the World Bowling Federation and we are
managing the World Bowling Championships in Malaysia in August-September,
doing the TV production and the worldwide distribution. We've just
been signed on by the World Snooker Federation as the Asian leg
In a quick rollout, we are bringing more golf events to India because
of our affiliation through our partner (World Sport Group) with
the Asian PGA. We will bring more events to India because of our
We are doing ten events this year in bowling, football, golf and
This is what Digvijay leads. Let us see if football gets off the
ground. We will bring football events to India. We've been asked
to rejigg the Nehru International soccer tourney and take it up
on a long-term contract. It's a great tournament that somehow or
the other didn't make its mark which we believe has to do with the
quality of brand management that goes into running an international
Our partners are in charge of the Asian Football Confederation.
They handle the entire Asian circuit and so there is strong expertise
already in the group for football. We are enthused about it. We
haven't said yes yet (to the Nehru Cup) so I can't definitely say
we will be doing it this year. If not we will be doing something
else in football because we believe it is the next big opportunity
area. We are seeing good vision now in the football management in
the country. I believe we are on the right track in building a long-term
future for Indian football.
World Cup final match 2003: Thawani with Akash Khurana and South
Indian film star Venkatesh, who is starring in Nimbus' next
challenge for us is to be able to handle international distribution
of television products, including the documentary"
One would have thought that hockey would have been a better
Hockey is a non-television game. It has to do with the inherent
nature of the sport. It's too fast moving, the ball is too small,
and there are not enough breaks. The same thing happens with squash
and badminton. If it is too fast moving a sport, if the object,
the ball, is too small, and if you don't have enough breaks, that's
death as far as television is concerned.
You want to set up an international TV marketing arm. Could
you elaborate on this a bit?
We have been selling our home product from non-traditional places
as Israel to traditional places as UK and Mauritius. We have done
original productions for people like Carlton in the UK, cable stations.
However the key thing is that it is not showing year on year growth.
The challenge for us to be able to handle international distribution
of television products including the documentary.
Our products are sold in UK, Australia, West Indies, Canada, Japan,
Philippines. We are hearing from producers that they lack distribution.
Our aim is to clearly replicate our sports television distribution
model to other non-traditional areas.
A non-traditional product could be an English language drama by
a UK producer. He might have Europe well covered but does not understand
Asia, Singapore. Right now we are not thinking of making English
shows but of our international film company does well then it could
extend itself to television.
We are not starting the international distribution arm in this
calendar year. It will take 18 months to set up. Whether we will
take on a foreign partner using our Asian strengths or if we will
take on a strategic partner into the parent company itself is a
question that we have to address. This question will have to get
addressed and I will get diluted.
will lead to a redistribution of income in the broadcasting
industry. I think there will emerge a shakeout"
at Johanessburg in March 2003
Any details on the movies that you're rolling out?
Our first film Sarhad Paar is nearing completion. It
will release in October pre-Diwali.
Another film has been put into pre-production and it goes into
filming right away targeting a July 2004 release. It is even bigger
in terms of investments. Sarhad Paar was a 10-crore film,
the new one costs Rs 16 crore.
What about news content delivery?
We have completely pulled out of news. We think the space is so
cluttered that margins are impossible to generate. I think everybody
is in negative cash flow. I can see there will be a big shakeout.
News is a power source that attracts people. We were in news delivery
as we had developed a competency in that area. We made a reasonable
profit. We were not interested in the power plays of news. We understood
pre-production, engineering, content gathering. We are out of here
and we are not coming back in a hurry as we do not see any competitive
space opportunity in the near future.
What are your views on the hot topic of the day CAS?
I agree with the industry there will be teething troubles. I
agree with the industry that some consumers will wind up paying
more than they are paying currently. But I say, 'So What?'
I think it's going to really be a revenue redistribution. At the
end of the day the consumer is not going to pay vastly more than
what he is currently paying. There is an elasticity in the top maybe
one, one-and-a-half million homes in the country. The rest are fairly
inelastic. If they were paying Rs 150 they will distribute their
money now over fewer channels, but the channels which they want
they will get. So what will happen therefore is that those channels
will get more of the pie of that Rs 150 than they were traditionally
getting. And therefore in that redistribution of income in the broadcasting
industry, I think there will emerge a shakeout.
The guys who are delivering a product that people actually want
will make money and the guys who are tagging on to this non-addressable
system will lose out. Between a NatGeo, Discovery and Animal Planet,
I can't see too many homes buying all three. Right now they are
getting all three and all three chaps are making very little money.
This way the money will now go into the hands of the stronger brands
with the better products. Which is really what this business is
all about, so I can't see what the big hullabaloo is about CAS.
And taking off from that, the opportunities in a post-CAS era are
going to be vastly different from the opportunities currently are.
October-November would be a good time for us to review whether
an opportunity exists to launch Showbiz Channel"
Do you see an opportunity in a post-CAS era to launch your proposed
show business focussed television channel Showbiz TV that never
In a beginning of the year presentation in April, we
did present a scenario of what might happen in a post-CAS era. And
whether we would want to relook Showbiz TV. Because we had already
spent several crores (tens of millions) doing the entire channel
packaging. We were looking at whether we want to revive that prospect.
Because if we were to get one-and-half-million to two million subscribers
we would still make money. Because that is a space that has not
yet been filled.
have completely pulled out of news. We think the space is so
cluttered that margins are impossible to generate. I think everybody
is in negative cash flow"
Probably within three to six months of the CAS
launch we will take a call on that. Showbiz TV is something we are
ready with. We could actually launch in about 12 weeks time by just
going into the commissioning of the programming that we need to.
Because the FPCs, the distribution, the engineering, the channel
design, all that is ready.
So we will review it but we are not jumping into the broadcast
space. And if we do we will make sure that we have a distribution
alliance in place because we do not want to go it alone. We are
far more comfortable letting one of the biggies charge us 15-20
per cent off the top to distribute our service. We won't even look
for MGs (minimum guarantees) because we are pretty sure what we
can make on the advertising side. Probably October-November would
be a good time for us to review whether an opportunity exists.
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