Television

'Movie acquisitions for entire network will now happen from India' : B L Gautam - B4U COO

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B4U Television Network has chalked out a revival plan. The company has paid carriage fee to cable operators, visibility of its two channels has improved, and plans are afoot to gradually regain lost ground. As a first step, it is aiming at branding shows on B4U Music which it will use to scale up programmes. The channel will also try to package promos with innovative content for its clients. B4U Movies is working out revenue share arrangements with film producers to get access to new but small movies. These movies will be shown every Friday, starting October. The next step will be to acquire big movies.

Having spent nine months in B4U, the company's chief operating officer in charge of India operations BL Gautam says the turnaround task is challenging but revenues are slowing growing. He spent 20 years in Customs and was conferred the President's award in 1998 for conducting the largest amount of seizures. But he didn't accept the award, protesting against the butchering of CRPF jawans by civilians in Bangladesh border. The Indian government, according to him, didn't show any formal resistance and did not take up the issue on international forums.

Gautam joined Zee Telefilms in 2000 and was put in charge of film acquisition business. Zee, he says, provided him the ideal platform for learning the basics of media business. When he left Zee, he was director commercial and was in charge of total content acquisition - national and international - of the entire network.

In an interview with Indiantelevision.com's Sibabrata Das, Gautam says advertising revenues can make steady progress but admits there is no big scope in subscription revenues. While movie channels are big business, there is a limit to the revenues of a music channel. B4U Music, according to him, can only be a supplementary channel, once the movie channel has reach.

Excerpts.

Is B4U still bogged down by disputes among promoters?



Everything is sorted out at the promoter level. I am not in a position to spell out more details. We are in the process of taking the organisation ahead and infusing more funds. We are ready to take off.

Why then haven't movie acquisitions started yet?



We are shortlisting movies. In overseas markets, which are heavily subscription driven, we will need new and regular titles. As a strategy, we have decided that now all acquisitions for the entire B4U network will happen from India. We are in a better position to work out the deals. Besides, no big movie in future will be sold separately for just overseas rights. This is because of two reasons. Hindi movie channels are expanding their global reach. And as for theatrical distribution, several companies are getting into overseas distribution as a part of their synergy drive.

Has supply of movies from Kishore Lulla's (one of the founder promoters of B4U as well) Eros stopped?



We are taking the deliveries which were to come from Eros. We have recently taken 150 titles from Eros. We are in the process of completing the deliveries from Eros. We are strengthening our library.

Is Lulla out of the B4U board?



I can't comment on such issues.

How are you planning the revival of B4U?



We have taken care of distribution, of course on a carriage fee. But we believe our deals are better. The carriage fee is paid in a step up manner so that we can reach adequate connectivity while garnering proportionate revenues. We have done it strategically with the multi system operators (MSOs) and are available on Hathway, Incablenet and several other networks. We are also available on Siticable in pockets. Siticable has a wider presence across the country and in some areas it is not crucial for our music channel. On 7 Star cable network in Mumbai, only our music channel is available as the area they are servicing is upmarket and will not watch library movies that we are showing on B4U Movies now. When we make new movie acquisitions, we will get our movie channel on 7 Star as well. We are not paying blindly to the cable operators.

'B4U Music can be only a supplementary channel, once the movie channel has reach'

When will we see big movies on B4U?



Being the last in the movie channel lineup, we will have to run in a different direction. We are in no position to make big movie acquisitions at this stage as the channel does not have the potential to make up in revenue realisations. If we are going head on with Zee Cinema or Max or Star Gold, we either kill them or get killed. It will be impossible, judging from our current strength. A better strategy will be to increase reach by carving out a space for ourselves before taking on competition.

Is that possible for a movie channel?



We can work on small revenues which the biggies won't be able to do. We are, in fact, getting into an innovative arrangement to source new movies. We are entering into a revenue share agreement with producers on a movie-to-movie basis. We will be giving them 50 per cent share and they won't have to bear the promotional and marketing costs. Of course, these will be small movies which could not be sold, but they will be new products. We will be starting this in October. This will open up the Friday slot for us. We have already signed four films and are in advanced negotiations for four more. This will mean that our viewers will be able to watch four new movies every month at a subscription fee of just Rs 6 a month while we don't have to pay an acquisition price. The system is transparent and the advertising deals will be shown to the producers. If this experiment succeeds and they get a reasonable share of income, the bigger producers will surely consider this option. A minimum guarantee (MG) model can also be built in. We are also planning to make these films available for direct-to-home (DTH) and MSOs on their cable movie channels for digital subscribers. The revenue share model can develop into a bigger platform and has the potential of changing the dynamics of movie business as it is done today.

How can a movie channel survive without bigger movies?



It can't. We will need at least 12 big or what we call festival films. We can't ignore that side of the business. But we have to grow gradually and the first step in this direction is to get new, though small, movies.

What is the revamp plan for B4U Music?



We are planning to brand all our programmes. Title sponsors will add to the image of the channel and this will be used to scale up the programmes. We are also planning to work out innovative promo packages for our clients. The revenue business from promos in music channels is actually changing. In this kind of emerging business, B4U is in a unique position. MTV and Channel V are not really Bollywood music channels. ETC has a Bollywood identity, but it is a promo and not a content channel. We have Bollywood shows like Centrestage, Star Stage, Mark for the Month and Singer of the Nation where we can offer packages. Promos will not make big business for us but we can use it creatively to strengthen our content and relationship with Bollywood.

'Being the last in the movie channel lineup, we have to run in a different direction. It's impossible to take the biggies head on'

How challenging is it to run a music channel in a stagnant revenue environment?



The highest revenue potential for a music channel in India under the current environment is Rs 240 million a year. MTV should be making more, but even for them the growth is limited. Since the revenues aren't big, it is necessary to be more accurate in what you want to do. In movie channels if you are big, you don't have to be perfectly right. For music channels, you can run the risk of diluting the brand. MTV could afford to try out soaps because it doesn't have strong competition. But it didn't work for the business or the brand. These kind of tempting experiments are not advisable because it shows that you don't understand the pulse of the business as you can't make music channel audiences sit for half-an-hour. MTV thought it could leap in terms of revenues but sadly failed. If you have to scale up revenues, you have to extend other lines of business related to the brand like licensing and merchandising.

Is revenue growth a big area of worry for B4U?



We went through a bad patch but are now making Rs 70,00,000 a month from our Indian operations. We aim to earn Rs 15 million a month by the end of this financial year. Let me be candid. As of now, there is no big scope for B4U in subscription revenues. In ad revenues, we can make steady progress. And we are keeping our costs down.

Is B4U Music contributing more than B4U Movies?



Currently yes. But there is a limit to the revenues of a music channel. Movie channels are big business. You can't survive with a total income of Rs 15 million a month. The minimum target has to be Rs 50 million. The music channel should ideally be offered to producers as a platform to rake in more revenues from the movie channel. For Example, you can do musical events of movies and show it on the music channel. B4U Music can be only a supplementary channel, once the movie channel has reach.

Has B4U solved the legal disputes it has had with Modi Entertainment Network (MEN), Prasar Bharati and Zee Telefilms?



Efforts are on to resolve them expeditiously either through arbitration or otherwise. With MEN, we had a distribution deal for our channel as well as Fashion TV. We fell apart on certain issues and have made a claim of Rs 230 million against them. The dispute with Prasar Bharati related to movies of B4U which were to be shown on DD International. But the channel couldn't be encrypted and the agreement was unilaterally terminated by Prasar Bharati. We have made a claim of Rs 84 million. As regards Zee, the issue is over the telecast rights for movies which we had sold to them. We are confident of resolving the issue with Zee.

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