Television

'The scale of our movie business will give us an edge that we will use to build synergies with television' : Shantonu Aditya - Sahara India Mass Communications CEO

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When Subroto Roy announced last year his commitment to infuse a whopping Rs 15 billion for a makeover of his entertainment and media business, he was on a quite a sticky wicket. His channel was low in ratings, the attempt to succeed with Bollywood star-led shows had flopped, and revenues were sinking ever lower.

Fast forward to the present and the situation has vastly improved with Sahara becoming a powerhouse in the motion pictures business. The general entertainment channel, SaharaOne, has still a long way to go but it is inching up the ratings. And a movie channel, Filmy, is set for launch to form a bouquet.

The organisation has undergone a change with Percept handling the management of the entertainment business. A new team has been put in place with former SET Discovery president Shantonu Aditya taking the reins as CEO of Sahara India Mass Communication Ltd.

Aditya's task is to leverage on the company's movie successes like Page 3 and Sarkar to build its television business. Motion Pictures, he says, will continue to deliver and drive the business. Television will also form a core part but he admits it is a "difficult business" and will grow gradually.

In this his first interview to the media after becoming CEO, Aditya spells out his growth plans to Indiantelevision.com's Sibabrata Das and Hetal Adesara, saying he remains confident that Sahara's entertainment business will turn around by April 2006.

Excerpts:

In just four months of your joining as Sahara India Mass Communications Ltd CEO, what have been the challenges that you have had to counter with?

There were organisational issues, people had to be put in place, a team had to be built. It took us some time to do this. We have recruited 80 people over the last few months. Now we have the direction and the speed. Our motion pictures division is doing very well. On the television revenue front, there was a lack of focus on sales which is now being taken care of.

After having several hits, is Sahara sensing a bigger opportunity in its movie business and scaling up its investments?

Motion Pictures will continue to deliver and drive the business. We have 40 movies on the floor and another 30 are in the pipeline. We will have 15-16 releases this year, out of which four are already hits. We also released India's first full length 2-D animation movie - Hanuman. Home Delivery is lined up for a November release and Malamaal Weekly for December. We will be showing a profit this year, which has never happened in the past. But television is also a core part of our business and will drive on ad sales for some time.

Will this be the right time for Sahara's entertainment business to turn around?

Yes, we plan to turn around by April 2006. That is not so difficult. The bigger issue is to manage the cash flows. It is important not to get carried away but have a sense of proportion, particularly in the movie business. There are so many dynamics and variables in this business.

Does this mean that you have axed projects which were earlier thought of as viable?

We have closed a number of movie projects which were unviable. We follow three models for our movie ventures - tie up with production houses like K Sera Sera and Boney Kapoor, make outright purchase like Page 3, and produce movies ourselves. The challenge in the motion pictures business is how to exploit new revenue streams like broadband rights.

Have multiple revenue streams opened up to cushion the risks?

There is a complete shift as far as revenue streams are concerned. The dependence on the theatrical releases has come down from 70-75 per cent to about 50-55 per cent. Sale of satellite TV, global, music, mobile telephony and home video rights make up the balance. The home video segment, in fact, is growing rapidly and now constitutes 15-20 per cent of the total revenue pie. We are also looking at launching our own labels. Syndication of content is another big opportunity. We have done a deal with Star India for limited telecast to 64 movies. We have got proposals from others and are looking at more such deals where we can exploit our content.

Don't you feel that on the television business Sahara is on a sticky wicket?

On the television front, we have taken tremendous strides in the last few months. SaharaOne is the number three channel during weekdays in prime time. We are also looking at strengthening our weekends. One of the problems was that despite the ratings our effective rate (ER) of advertising was very low. But our ERs have increased 5 - 10 times in the last couple of months. Our inventory is full at this point and at our new rates. The target is to be a strong number three by the end of this financial year. But television is a difficult business and we are prepared for a gradual growth.

Can't you use the big movies to drive the channel?

We have a war chest of movies. But we won't use it up at one go. We will work up the ratings through our programmes.

What is your programming strategy going to be?

We know we have to have differentiators. We are launching a mega game show, Mission Ek Crore, where the concept is ours and FremantleMedia will develop, produce and license the format globally. This is the first time that such a thing is happening in India - a game show conceived here and made available overseas. We are working on other reality shows which we can't talk of now. Besides, we are strengthening out kids' band.

Will Sanjay Dutt play as the anchor for the game show?

I can't comment on it. We will announce the host at the appropriate time.

Is SaharaOne, already available in the US, launching in UK?

The channel will launch in the UK and the rest of Europe by the end of this fiscal. In the US, we are already available in 60,000 homes in a short span of time. We have been able to make an impact very fast.

What has led to the delay of the launch of Filmy, the movie channel?

We are now aiming at a December launch. The delay has been caused by the hardware suppliers who took time. It will be an encrypted channel but we haven't decided whether we should make it pay. We are seeding at least 5,000 decoder boxes.

How will you divide the movies between SaharaOne and Filmy?

That is a common dilemma the industry faces. There is a distorted price structure. Movie channels command lower rates than general entertainment channels, even if the rating is the same. There is an error in the system. But we have a plan which we will reveal closer to launch of the channel.

'SaharaOne is the number

three

channel during

weekdays in primtime'

Will Filmy channel telecast three movies a day? Is this because of the size of your library?

We have 350 movies with us and are quickly ramping it up. We will in a week's time have added 110 more movie titles.

The promoters hold 96 per cent in Sahara India Mass Communication LTD, the listed company. How do you plan to increase the public shareholding as required by Sebi norms?

We have time for that. We are also planning to change the name to reflect the SaharaOne brand. The new name will have SaharaOne in it so that it brings out the identity of our entertainment business.

Are you also considering the merger of Sahara India TV Networks, which is the broadcasting company for the Group's entertainment and news channel operations, with the listed entity?

We are looking at possibilities of the structure. But it is too premature at this stage and we haven't decided on anything.

Sahara has been aiming at becoming an integrated media and entertainment company. Is it in anywhere near that?

We are driving in more synergies between our motion pictures business and television outfit. We could find ourselves in a unique position because no other broadcasting company has grown its movie business to such a large scale. This we feel will give us an edge in the marketplace.

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