Television

"A concerted effort is needed to get CAS into homes" : Sameer Nair Star India's chief operating officer

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Star India COO Sameer Nair may not look like it, but his colleagues say he is an extremely shrewd strategist. As part of the Star India think-tank, he, along with CEO Peter Mukerjea and others, has put together many a winning gambit. One can understand why... Nair loves reading military history books (which one presumes are full of details of war strategies) and his favourite is What If?, a series of essays by leading academics who pose counterfactual issues on turning points in history - such as, What if the Nazis had not invaded Russia? and so on.

Everyone, or at least most people, now admit that the success of Kaun Banega Crorepati, which turned round the fortunes for the network in India, hinged on its choice of anchor Amitabh Bachchan. And Nair's biggest contribution was to convince the demi-god of the silver screen to experiment with the small screen. The once programming head of Star Plus Nair is now involved in the programming and marketing strategies of all the channels, excepts Star News.

His passion for things creative can be gauged from the photograph of master American film crafter Steven Spielberg which is a permanent fixture in his workplace. Additionally, Nair also collects film props and memorabilia. Like the armour worn by Shah Rukh Khan in Asoka or the headgear from one of the characters of Star Wars.

Educated at St Xavier's, Mumbai, Nair has had a peripatetic career, selling sandwiches and making ad films in Chennai before he joined Star in 1994. Because Nair is a master strategist, he is also a person who weighs every word he utters. But Nair can shoot straight from the hip and doesn't hesitate to call a spade so when the situation so requires. In this first part of the two-part interview with indiantelevision.com's managing editor Thomas Abraham, Nair does some straight talking on various issues like CAS, the initial problems related to its implementations and Star's probable strategy in a post-CAS regime.

But at the same time, with equal comfort, he ducks some uncomfortable questions on Star News, DTH and rumours of another COO being inducted into Star India as part of a restructuring.

Excerpts:

What's the latest on the INCableNet face-off? There is talk that some sort of a settlement is in sight.

There is no agreement that I have heard of but any agreement would be connected to payments. In the IBF, it has been discussed that a committee would be set up - similar to one that we have for the advertising community.

When a company is blacklisted no one accepts their advertising. The INS (Indian Newspaper Society) also has this. It is not cartelisation. We are simply bringing ethics into the business. A certain kind of order will not allow the cable community to play one against the other. The time has come when we have to work together.

Three, four years ago in the advertising business, it was discovered that an advertiser after spending money on Star would then push on to Sony, Zee. At the end of a year he owed outstanding to everyone. This, often, happens within the cable business. One month, you pay one person and the next time around you pay someone else. In reality, you are damaging the business.

We are working on the committee and we shall announce that shortly. Then, we shall encourage the cable operators to form their own association. This is a good way to professionalise the business.

Sam Balsara speaks at IBF meetings on behalf of the advertising community. When the surrogate advertising issue came up, we held discussions with the advertising community and it was decided to go along with the laws of the land. No one breaks ranks then. This kind of dealing helps safeguard everyone's business.

Whatever business planning and projections are done, it has to be stable at some level. The Hinduja problem has thrown our planning out of the window. We are also businesses - professional corporate companies. There is a way of working. We sell services and provide goods, which we are yet to get paid for. If you suddenly behave in an ad hoc manner and refuse to pay then the situation gets bad.

Broadcasters and the cable industry have realised that if we are to enter the brave new world of CAS then we need to work with each other. So, we need to talk to each other and therefore pay each other's bills.

Central to the CAS proposition is the set top box. There seems to be very little uptake of the box, so where are we on this?

The set top box is going to be bought out of disposable income. If we safely assume that television is a necessity - as a form of entertainment at a low cost - instead of buying the second television or getting a second scooter the consumer will buy the box. My assumption is that boxes will be freely available for around Rs 5,000.

I think that consumers will either protest or buy the box. I don't see them going without Kyunki.. quietly. The advertising client community is blissfully unaware of this problem.

Some great Indian man told me his aim is to capture as much as he can from the consumer's wallet. To achieve this, he will continue diversifying in a manner that continues to capture more and more of that wallet. "Wherever he (the consumer) spends I want to be the recipient of most of that expenditure," is what he told me.

Using that analogy now, there is the set top box that will be purchased from the same consumers wallet. If you decide to watch DD post-CAS then the national broadcaster will have to spend more money upgrading its programmes. Will DD also provide music, adventure? It is a big change and either here or there big spend will be there.

"You will take 62.5 days to complete installation of the 1.5 million boxes. And that includes working on Sundays"

Is the answer in subsidising the box or maybe even giving it free?

It is not only a question of subsidising the set top box. There are many things that go into selling a commodity. You need to have a marketing, promotion plan, retailing scenario. Nobody in our business has ever done genuine retailing, which is what we are entering into.

The box can be subsidised in different ways. It can be built into your monthly cost. It has to be done in a joint manner. This however cannot happen if people do not pay their bills. No matter which way you slice or dice it, if anyone thinks that if you get the box and if it is going to be at the same price, you currently pay your cable subscription fee and that is the way it will pan out that is flawed.

With CAS, your cost will go up vis-?-vis what you are currently receiving. Packages, schemes can be done which is why we got a whole group to sit down together and talk. We were working on a joint strategy to make sure that people want to buy the box, they do so, they take the packages on offer and they watch television.

Nobody can do this alone. The MSOs and broadcasters have to come together. We can have a joint call centre with one number in Mumbai with huge running lines taking calls. Hand over databases to operators in different areas. All inquiries come to the same call centre. Everyone foots the bill.

It is amiss to say that we are all out to derail it. We actually set up a company about five months ago called CAS Positive. Nine people are involved and their agenda is to make it (CAS) work.

And getting the boxes into homes?

A concerted effort is needed to get CAS into homes. The box is to be placed from the MSO to operator to home. It is not like DTH.

There are 6.4 million homes (in the four metros). Lets say that half of them cannot afford the box. MSOs now say they are going to seed 1.5 million boxes, which I do not believe. I don't think they are good for over half a million.

Anyway, let's go with the 1.5 million figure. Let's just talk about installation. If I get selling into this game it will be completely disastrous. If it takes half an hour to install a box and assuming 1,000 employees are working 12 hours a day you will install 24,000 boxes every 24 hours. You will take 62.5 days to complete installation of the 1.5 million boxes. And that includes working on Sundays.

So what happens? You (consumer) have the cash but you don't get the box due to this delay of two months. Mind you the half-hour stipulation is ridiculous.

"Today, the consumer is saying I get switched off and I do not have a box. Is it worth the risk paying Rs 5,000 to buy the box and get switched off again?"

Isn't everyone waking up to these problems rather late in the day? 

It's not as if we didn't have a plan in place. In April, we started the (television) campaign. It was supposed to have part two, three, four. It never happened because the INCable operator is not paying his bills.

Part two was supposed to be a campaign by say 'Tulsi' (Smruti Malhotra) saying call this number as your time is running out. From 1 May, there were supposed to be four numbers for the four major Metros. By the time you arrive closer to July the database would have been in place.

For part four we were to use celebrities like Amitabh Bachchan, Shah Rukh Khan saying 'I have got my box. Have you?'. By the time, you are actually ready to get the box 30-40 per cent of the work has already been done. You must either want or not want to do it. Subhash Chandra wants to do it. We set our differences aside. But, as you are actualising the process and putting a plan in place, your partner INCable says we will not pay your current bill.

How can you be sure of doing business with someone like INCable in the future when they are not paying your current bills? It slows down the process. Then all the other operators get wary. Hathway is left wondering what is the INCable"chakkar" suddenly in the middle?

For the consumer, there must be a sense of similarity. It shouldn't be that the cost of the box starts varying from locality to locality. Then it becomes a choice thing, which will prove problematic. Joint promotion, marketing is needed.

I am not saying that everyone will buy the box but those buying should have that the sense that their money is in safe hands. The consumer wants to feel secure. Today, the consumer is saying I get switched off and I do not have a box. Is it worth the risk paying 5000 rupees to buy the box and get switched off again?

Is the point you have made earlier that programming budgets would be halved post-CAS applicable to only TRP-linked payments to the likes of Balaji and UTV or would it apply for all programming?

It is a general cost reduction of up to 50 per cent. The TRP game will go out of the window post-CAS. If viewership goes down on account of chaos and confusion all around then we will obviously stop and consider our decision to spend so much money on a particular show. Why should I buy an expensive movie if nobody is going to see it?
Then what made you pump in money in a blockbuster show like 'Josh'?

Josh was something we had planned for a while. Going forward in a chaotic CAS environment the sentiment would not be to spend more money. I would spend only Rs 50 lakhs (Rs 5 million) to buy a film and not five crore rupees (Rs 50 million). I cannot afford it. I am not going to get the viewership, advertising, pay revenues. So why should I pay you?
"Ideally, I would never club Star along with Zee, Sony but we believe that for CAS to be successful we have to work together"

Zee Tele CMD Subhash Chandra believes that CAS is going to level the playing field for all concerned, but after initial teething troubles, the industry will go on to the next level? Your comment.

This is true. I am not too sure about the definition of level. In the long term, CAS, if implemented properly, will be much better for all of us. There is no doubt about that. Our worry is that the size of the short-term damage may negate the long-term aim. It is like total destruction.

Level playing field will never be an issue. If CAS is implemented badly however, then it is not fair that after putting in three years of hard work we are on the same ground level as everyone else because of one piece of legislation. CAS, if implemented properly will help channels come into bouquets, groups, packages, tiers.

Ideally, I would never club Star along with Zee, Sony but we believe that for CAS to be successful we have to work together. We have to forget about the network and think in terms of packages that the consumer finds easy to buy. This will be the future. It is remarkable and nice that we four have come together speaking to each other in a civil manner. The short-term damage shouldn't take us backward instead of forward.

Has Star got an overall strategy post CAS that would include programming, communication and marketing?

We have worked on that. In a CAS environment, you are going to have to talk directly to consumers. You are going to have to position your product as desirable because now consumers will pay specific amounts for specific things compared to the current environment. It will not only be about getting you to watch. It will be about getting you to buy and then watch. It is a new thing and we have done hard work on it over the past three months.

Today, it is enough to say tonight watch Josh at 9:30 pm. Tomorrow, you have to say buy this and then you can get this and that. This is a big change. Everything else is fine. You have to create real viewers who pay real money. Today everything goes everywhere with the only differentiator being the ratings. Tomorrow, if 30 million homes are in CAS then it is possible that while Star Plus goes to all of them a Star World reaches nine million homes. The other 21 million do not want to genuinely pay for Star World. It creates an automatic differentiator.

The pricing of the channels are different. A mass channel will be cheaper while a niche channel will be more expensive. The advertiser will be sure of delivery in terms of real viewers paying serious money. The business becomes more sophisticated and scientific. The process will take time. The market is large and not very rich. Expenses are many while wallets are thin.

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