It's been eight months since The Walt Disney Company set up shop in India and unleashed the magical world of the much adored Mickey and his gang of toons to kids here.

The aim was to clearly make 'Disney' the leading entertainment brand in India in the next five - 10 years. The key objective of the company was outlined as "market development" by spearheading market entry via television. Enter Disney Channel and the Toon Disney channel in December 2004. Other areas that were identified were - retail, films, mobile and internet and separate divisions were set up for the same.

But clearly the lynchpin of Disney in India is its television business and the next couple of years will see the company gearing up to establish itself as the new benchmark for kids marketing and kid-appropriate family entertainment.

In his first full-fledge interview to the media since taking the helm as managing director of The Walt Disney Company (India) Pvt. Ltd., Rajat Jain speaks to Indiantelevision.com's Hetal Adesara about the company's plans in India, his mandate and more...

Excerpts:

It's been eight months since the two Disney channels launched in India. What does the report card say?
The report card is pretty good. Our television business is picking up. The two channels have been through the initial phase of seeding and building up, coupled with the fact that our distribution is expanding every week. India is not an easy distribution market given the fact that there are so many channels and cable space is limited. So it's obviously a market, which is crowded and hence it's taking more time. But in terms of overall ratings or GRPs or channel share, the channels are actually picking up.

Toon Disney is currently not in Hindi but it is still doing pretty well. The channel is going all Hindi from 1 September. We are quite happy with the overall performance of the channels both on the distribution front (it is now available in close to 22 - 23 million homes) and in terms of ratings too where we expected it to be in a span of six - eight months.

In terms of audiences, we are getting the kind of audiences that we were looking at, that is, not just 4 - 14 years but kids and family. One of the unique propositions of Disney is that it is not just a kid's brand. It is kids and family inclusive. With our movie blocks we are able to get a much wider appeal and audience. So the youth and parents' skews are quite positive in that sense and it gives us the opportunity to expand the advertiser base. The important point is that The Disney Channel is ahead of leading movie channels in the evening among the core target group that we look at.

So to sum it all, this is what the report card says -- In terms of ad sales we have 66+ brands on the channels. In terms of distribution, we are available in over 22 million homes. In terms of ratings we are clearly reaching there. In terms of brand and connect to the audience, research will show that the existing brand equity of Disney as a brand is certainly getting stronger with the launch of the channels in India.

The hitch that the channels came across was in the area of distribution and hence visibility was low in its early days here. To what extent has that problem been solved? What are the measures that have been taken to ensure maximum visibility?
Like I said earlier, the distribution growth today is not such that you will get 100 per cent distribution in the first week itself. It takes five-10 months for the same. There are cases when even after 10 years the channels don't have even 80 per cent distribution and I'm talking about leaders. So it is important to have a reasonable amount of distribution before you start going out to mass market in terms of visibility.

Now to specifically answer your question, visibility means what you're seeing and what is available. We have made our presence felt in the outdoor mode more than anything else. As far as the basic platform of television is concerned, we have had constant visibility on Star Plus (where we have a one hour Disney block) and on our two channels. We have used a reasonable amount of marketing dollar behind creating visibility at the appropriate time as and when the distribution has been picking up and for the appropriate properties that have a connect with the TG.

Disney is looking at consolidating its TV channel business in India before diversifying into other segments of media and entertainment. What is the time line you have given yourself for the consolidation to take place?
Consolidation happens only after 10 years of being in a particular market. We have just launched TV and clearly it is our focus and driver for our business. There are other divisions too - Consumer Products and the Mobile and Wireless business, where you can get Disney ring tones, wallpapers and games from Indiagames. Add to that apparel, shoes, books publishing and so on.

Then we have our distributor in Columbia TriStar - Sony, which distributes all our movies. So all the businesses are there but in the overall context, television clearly is the biggest and it is also a driver. With television you have your platform and once you have the platform, you can use it to drive other lines of businesses. So given the fact that we are eight-nine months old in India, we still have a long way to go.

Today 70 per cent of the entertainment market comprises television in India. So it's not surprising that for us, television will be the driver. And even in TV, we are currently just looking at The Disney Channel and Toon Disney, which is really a small part of our portfolio that comprises a significant number of big brands, businesses and opportunities that could exist for the Walt Disney Company in India in the next 10 - 15 years.

One of the important aspects of my role is to try and see which of these opportunities can be logically brought into India, but ones that makes sense towards building the Disney brand and the Walt Disney Company into making it a leader in the kids and family entertainment business.

Speaking about the Disney Consumer Products division, you'll were planning to have Disney Corners at select retail outlets throughout the country from which licensed merchandise would be sold. Has that happened?
There is enough Disney presence in several stores in India. We have 55 licensees/partners around the country, some of them being - Cadburys, Archies, Shoppers Stop, Lifestyle etc. In the retail space, there are some Disney Corners; some of them are Disney shop in shop. This was more active in the pre-television period. The impact of the TV business on the consumer products business is yet to be seen. All the investment that is being put on the Disney brand in the last six months has been on the Disney Channel.

Now we are pushing Princess, which is one of the biggest girl franchisee that Disney has and just recently the accessories related to the property have sold out like hot cakes. The impact of the television platform, advertising and channel support on consumer products is now beginning to be felt.

In the Indian market, which is quite different from China or US markets that have relatively more entrenched Disney brand in people's minds, we are in a state where we are creating history and building a brand from the ground up in a pristine way.

The impact of television is already beginning to show on our other divisions. We will continue to focus on building TV, so that it becomes a stronger and stronger platform to help publishing, shoes, apparel, toys, telecom and wireless, mobile, broadband, films and what have you.

How integral are movies for a kids' channel?
I think they are relatively less important. We have movies on the weekends; typically we have one movie a day in the evening prime time. Our bigger focus is on series, whether it is Kim Possible, That's So Raven, Jo-Jo's Circus or Lizzie McGuire.

For us movies are important because it brings in the larger family but the backbone of our channel is not movies.

They are a great property and spike as also great destination drivers but I think on a continuous basis, movies are not habit forming. That has to come from series. Yes, clearly movies help sometimes to drive audiences to that habit.

Are there any new properties that are lined up on either of the channels later this year?
There are lots lined up on Toon Disney as well as Disney Channel and that will be significantly pushed with new activities. Clearly the biggest activity you will see on Toon Disney will be the conversion to Hindi. The moment you go from English to Hindi suddenly the appeal of the channel goes from five million to 25 million homes since 65-70 per cent of the country understands Hindi than English. That's going to give Toon Disney a huge boost.

The Disney Channel in the season time is going to see movie festivals, big events, couple of new show launches, some local original programming, which we will be acquiring apart from beginning to make some of that. You will see all of that over the next three to six months. The direction that we are moving towards is to bring in more and more localization, whether it is language dubbing or acquiring local products made in India or producing live action shows here.

The purpose of localization is to bring in relevance, connect and understanding in the local market and the target audience. Our priority is clearly to make live action original programming. We are in talks with a lot of production houses. However, I can't name any of them as yet.

Strategically, we are talking to people who we believe can make Disney quality, are able to treasure the Disney values of fun, story-telling and community.

So are you saying that localisation is the way forward for kids' channels?
What I'm saying is that localisation is the key for everything. It's not about localisation for kids' channels only. The Indian market and our culture is very strongly independent and unique. We have our own identity and our own set of languages. And hence you have to find the best mix of local versus global. From Kellogg's to McDonalds everyone has gone down the path of localisation some way or the other. You can't not take into account the local sentiments.

Large global MNCs have accepted the fact that it is not the overall "one size fits all" strategy anymore but you have to make different products for different markets.

Since the main revenue source for the kids' genre will remain advertising, have there been any studies done on how fast the market is expanding? How big is the overall kids' advertising pie of television today and what growth rates are we looking at?
I don't think I have seen any formal study. This is simple maths. The total advertising market may be growing by 10 per cent or so. The entire industry is growing by 18 per cent (including subscription revenues, which are growing much faster). If you take only the advertising revenues of the entire industry, kids' genre is definitely growing much faster simply because in the last one year, many new channels that have come up and I don't think anyone is going down.

This market is essentially in a positive phase of growth. Only about 10 per cent of kids used to watch kids' channels when there was little choice in the market. But now that you have more quality choices and options, kids' viewing of kids channels has increased. It has gone up from 10 per cent in December last year to 17 per cent at present and that's a significant jump.

Till last year beginning it was only Cartoon Network and then the rest came in slowly - Pogo, Nick, Animax, Hungama and the two Disney channels. As a result, the whole basket of kids viewing has grown.

All these channels are investing money in the brand. Hungama TV has made a lot of investments and because of the competition hotting up, Cartoon Network and Pogo have also made substantial marketing investments. So a lot of hoardings are now on kids channels, which was not the case last year.

It's quite natural that when you start investing in the category, the category grows because there is more visibility, action, schemes and more programming alternatives. That gives it a fillip for it to grow faster. According to me this market is definitely growing at 25 - 30 per cent. It's a good time for kids' business at large.

I don't have research on the kids advertising market but when you add the ad sales of all the kids' channels, the total is still not Rs 1 billion, it is far smaller. The total size of the pie is roughly Rs 45 billion. There is a lot of scope to increase the kids' pie to touch a figure of at least Rs 2 billion. It may mean a 100 per cent growth for kids' channels but it is still a small share of the total ad pie. So given the fact that it is small, it has a huge potential provided you give the right product, marketing and you are able to get parental trust and advocacy, which is what Disney's cornerstone is.

What's happening these days is that kids are getting older younger and hence the research that is available is on kids' behaviour as opposed to kids' advertising. Kids have more and more influence on the purchase decision making power over parents today, which is where advertising come in. As a result of which, insurance companies, automobiles, financial services, mobile handsets, telecom… virtually every segment is advertising on kids' channels. It's not just ketchups, jams and candy brands anymore. As a result of this, the Rs 1 billion figure is also going to grow as more categories are willing to advertise on kids' channels.

With more channels coming in, there will be more inventory, options and competition for advertisers. The net result of this will be that the kids' market will grow. Somewhat similar to what happened in the telecom sector and the news channels genre. The latter has grown by 300 per cent, but we aren't even talking of that - we're looking at a 50 - 60 per cent growth.

What is the advertisers' profile like on the two Disney channels?
We have traditional as well as non-traditional advertisers on both our channels. Some of the brands that advertise with us are Maggie Noodles, Dabur Real Juice, Parle G, Britannia, Pepsodent, Cadbury, Rasna Juc Up, Clinic All Clear, Harvest Gold, Amity Business School, Prakash Snacks, Archies and Doy Soaps to name a few.

When we launched, eight brands advertised with us, now we have 66.

With UTV slated to launch another two kids channels soon, do you think there is space for more in a market like India?
Well, it's good that there are more kids' channels coming up. In UK, there are more than 20 kids' channels. I think in India, we can sustain 10 such channels but it's a matter of getting the right product and the right business models. For channels to sustain, one of the things that have to change for us over time is that the broadcasters start getting the appropriate share of subscription revenues, which we don't get.

For niche channels to sustain, they will have to pitch themselves on a specific segment. When that happens, ad sales revenues will over time become less important because it will become more difficult to get that pie. But what you should get is that 'x' per cent of the total subscription revenue that is generated, which today you don't get because you don't know who's watching your channel and how many are watching. There is this constant debate around viewership versus declaration versus under declaration etc… I think addressability has to happen with new platforms and appropriate addressability coming in the next three-five years.

If you provide the right content, it is possible to get the right share of revenue of that segment of the population as opposed to just advertisers. The total of that revenue is about $1 billion and the broadcasters get about 10 - 15 per cent of that. Whereas, the global average is about 50 per cent or maybe more.

DTH is going to come up in a big way and that platform is fully addressable. So once that happens, there will be pressure on the cable systems to either improve and become addressable or lose to DTH. Then IP Broadband TV is waiting to enter at some stage when the technology is well figured and one can reach the last mile. That too is fully addressable. Like, in kids' channels, more channels will improve the overall quality, similarly in the distribution market, more choice of reaching your favourite programming, you have to improve the quality.

Is Disney planning to launch the Playhouse Disney channel in India?
Playhouse Disney is a great brand and is currently seen as a block on the Disney Channel and is one of the highest rating blocks on the channel.

Why does it have to be a channel? It is doing very well as a block. Around the world in many countries it exists as a separate channel but in the US it airs as a block on the Disney Channel. It's a matter of saying how viable is the business in the market. If Playhouse Disney channel is launched in India, it would be targeted at pre-school kids and mothers between the ages of 25 - 34. That's a small segment and they will be willing to pay more because they are getting quality product. But by them willing to pay more, broadcasters don't get any incremental share of that revenue.

We have just two channels as of now but there are several other channels in the Disney portfolio that can come into India. They are unique channels and hence the business plan and the viability depends a lot on the addressability of the system.

Playhouse Disney surely has the opportunity to become a channel at some stage but at the right time when the market is ready and we are convinced that we can make a business out of it.

Cartoon Network is a clear leader in the kids' space. How long do you think it will take Disney to inch closer to it?
If you talk about inching closer, we are inching closer to them every day because we are growing. I don't know how long it will take us to cross them.

Our clear mission is to make Disney a clear leading entertainment brand in India. And Cartoon Network remember is primarily television business. We are in multiple businesses and for us our big businesses are studio entertainment, parks and resorts, consumer products and media. Media networks has radio, television, Internet etc. The television business contributes to around 25 per cent of the company's total revenues. We don't really say that Cartoon Network is our only competition. There is a large spectrum of players out there in the market.

Our mission is not to beat Cartoon Network. We are the world's fifth largest brand and the biggest kids and family entertainment company in the world. Whether it takes us three, five or 10 years to reach the top only time will tell because a lot depends on how the market changes and regulations move.

Our business here is very integrated and we are driving the Disney brand with various businesses under it - television, consumer products, Internet, publishing, digital media, broadband and theme parks and resorts (which is far away).

Essentially with this whole mix, we should be leaders in the kids business. Cartoon Network has a 10 year lead advantage over us. They are hugely distributed and have had a monopolistic presence so I'm sure they have the numbers. We are quite satisfied with the way we are seeing our growth curve. And this is not yet having hit the season and also the Hindi language. It's not so easy to displace leaders and to be fair it is going to take a few years to reach there. We will make our efforts and it's not only about being number one in terms of the ratings but you should be number one in the hearts and minds of children and parents.

For the Walt Disney Company, India is clearly a focus market and is the cornerstone for our international expansion.

With the latest addition of Tushar Shah as director marketing, that about completes the A-List team at Disney India. Is that correct?
By and large yes. Nachiket Pantvaidya (programming), Sunil Shahani (finance), Tushar Shah (marketing), Sanjay Reddy (ad sales), Shantanu Nalavadi (business development), Amit Malhotra (BVITV), Amitabh Srivastava (distribution) and Subhasis Mishra (HR) complete the television side of the business, which is very much in place now. Of course I have the other divisions of the business, which are headed by the respective heads.

Why do you think kids' channels are resorting to star power to lure its audiences? Any plans of roping in actors for endorsements in the near future?
I think we will do anything that is relevant and in line with the Disney brand principles. We have some fairly stringent ways of looking at things. Having said that, there is no reason you cannot have a brand ambassador. We have multiple levels of the brand and hence the architecture is not straight forward so whether there is a role for a brand ambassador in our company, is yet to be seen.

For us to say that someone is a Disney brand ambassador is a big thing. He has to embody all our principles and it's not easy. To be honest our biggest brand ambassador is Mickey Mouse.

What is the Walt Disney Television International (India)'s agenda going to be for the next six months or so? Will there be a focus on something particular?
In the coming six months our agenda is to clearly ensure that our creative processes are vibrant and that our programming meets the Indian consumer's tastes and preferences.

The second priority is empowerment of kids' viewers that interact with us. That is really important to us and is a part of our brand architecture.

Finally, it will be to focus on some of the new aspects of our business, which is the growth of the consumer products and newer digital technology driven business - Internet, wireless etc. That is a very dynamic market is ever changing and clearly there will be opportunities in that space for us in the next six - twelve months.

We will be getting the team and expertise in place so that we have a reasonable play in the lines of business which are likely to be driven by television. Our agenda will be to make sure that the rest of the system is geared to respond to the positive swing that the television business can create for the rest of the business. That's a priority for us.

Till now television has been the focus for us but the other non-TV businesses are also important.

So have theme parks taken a back seat? When Eisner and Iger had come to India earlier this year, there was much speculation then around the same.
Theme parks weren't on our agenda at all. There were a lot of talks and they will continue. Our priority is television not to say that things are impossible. We will continue to evaluate opportunities. Our current focus is Hong Kong Disney Land, which is due to open in two weeks' time. So all eyes will be there and it will be the closest Disney Land to India. And India will be in the catchments area of the Hong Kong Disney Land's marketing.

As far as India is concerned, it is too distant for us to even think of a Disney Land at this stage. We want to focus on the immediate business objectives in the next couple of years.