Television

“Ad cap should have been restricted to only pay channels”: Yogesh Radhakrishnan

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A veteran in the cable TV industry, someone who dabbled in the sector almost three decades back, Yogesh Radhakrishnan, now the MD and CEO of Pioneer Channel Factory, has seen the sector grow from the scratch.

Known for setting up businesses, Radhakrishnan has been the man behind building IndusInd Media and Communication Limited, ETC and ETC Punjabi, rejuvenating Zee Cinema, setting up Zee Middle East, launching the first HD movies channel with Times Television Network - Movies Now and the first HD music channel - MTunes.

Radhakrishnan, who has seen the sector emerge from a mere video-tape business to entering the digital era, talks to Indiantelevision.com’s Seema Singh about the emergence of cable TV in India, the first satellite channel, the emerging music sector and more…

Excerpts:

How did you get into the cable industry? How was the sector then? Why did you move out of it?

In an era when the only form of entertainment was Doordarshan, I was fascinated how it could capture loyal viewership despite old, dusted black and white movies they telecast. I sensed that if people were given the option of better quality of movies on their own TV sets without the hassle of VCR or cassette which was prohibitively expensive there would be a huge demand for it. Thus was born the idea of launching cable TV in India. However re distribution of home video cassettes was illegal so in the year 1988, I pioneered the launch of India's first copyrighted cable content with my three other partners under the brand name Cable Master. This gave the entire cable TV trade a flip and a legal straw to hold on to as the Government was yet to announce licensing policy for cable TV operators.





In the next stage of evolution from cable to satellite TV, in the year 1992, we were all geared to launch a channel but lost out the lone transponder on Asiasat 1 to Zee. Those were the days  of quotas and licence raj and we had to partner with an established business house to do business in India.

At that time the Hinduja group was on the verge of launching IndusInd, and so we partnered with them to create a media division and that is how the IndusInd Media Communications was created as a joint venture.





Incable emerged to be the largest consolidator at that time to bring in the economies of scale in a city like Mumbai which had more than 8000 cable operators. We were the biggest players across most of the states in the country.





Under IndusInd, we launched India's first cable channel In Mumbai and a 24 hour movie channel CVO.





Recognising the strength of ground distribution that our company had, we got many offers for joint ventures from the likes of HBO, Time Warner Cable, TCI etc. A huge multi million dollars offer from Rupert Murdoch didn't go through due to valuation differences between the Hinduja’s and News Corp.

In 1997, the cable industry got into a turmoil and that was the day I decided to move out of cable.



You went on to launching ETC which you later sold to Zee? What’s the story behind that? How did Movies Now and the distribution venture with BCCL happen?





In the year 1998, the concept of a 24 hour music channel was a need I saw and that is when I launched ETC, a channel focusing on new releases, as has been established nowadays the exposure of songs on TV plays a big role in the box office success of a film. ETC became the number one Hindi music channel followed by MTV, which was then a Hinglish channel.

ETC was the second listed company after Zee and after the successful launch of the channel, we also pioneered the daily live telecast by securing the rights to the telecast of Gurbani from the Golden temple and thus ETC Punjabi was born which went on to become the No.1 Punjabi channel and continues to be in that position till date in its other avatar PTC Punjabi.

After music and Punjabi channels, we saw the gap for 24 hour Hindi news channel, and that is how ETC News was conceived even before Aaj Tak was launched. But Technology wasn’t in place at that time a camera cost Rs 20 lakh, which today is close to Rs 50,000. Editing equipment, bandwidth for news feeds had to be sourced from DD, all in all, it was an expensive proposition. Hence, a 24 hour news channel had to be put on hold.

Subsequently in 2002 when we got a good offer from Subhash Chandra, we sold ETC Networks to Zee.

And then my association with Zee began, which was also an exciting time. I was a partner with Zee Middle East. Subsequently, I went on to build a strong company in Zee Middle East, which till date is one of the strongest markets for ZEEL.

In 2008, I sold back my equity to Zee and wanted to return back to India where the action really was. Former Times Television Network CEO English channels Ajay Trigunayat, was in Dubai then. We got together with our project to launch India’s first ever English Movie channel in HD.

I had discussions with BCCL MD Vineet Jain and a JV was formed in 2010 to launch four channels and then we further got into launching a distribution venture together called Prime Connect.

Movies Now was one of most successful TV channel launch. It went on to becoming the No. 1 channel in the first week of its launch. Finally, in 2012, I exited the company by selling my equity back to BCCL.

 

Then you moved on to setting up Pioneer Channel Factory? How is MTunes doing?

 

Following the trend of people wanting to go to multiplexes for the pleasure of enjoying quality production of Hindi cinema and their desire to watch songs in its full glory, I set out to launch MTunes, india's first Bollywood music channel in HD on the premise of Bollywood music like never seen before. Our songs were carefully selected to ensure they lived up to the channel premise.

 

Acknowledgement from advertisers came as we got many campaigns exclusively on our channel due to its HD premise. Today, MTunes delivers far greater HD audiences than English movie, entertainment or even sports for that matter.

Our second music channel Music Express resonates well with the industry, we package music with Glamour and Gupshup. Bhakti Sagar is our foray into the spiritual space.



 

How will digitisation help the music channel industry?





In analogue what was important was opportunity to see (OTS). In digital, all the channels are blocked in one category. The advantage for us is that we are in HD and so we got the advantage of the four million eyeballs. Our reach is good in HD and we are also available on SD. So for our advertisers it is a win win situation.

How big is the music channel industry currently?

If you take 14 music channels on an average, advertising and promo put together, we would be around Rs 700-Rs 900 crore.

Unless and until you can differentiate yourself, you will not be able to grow majorly. If you see the broadcast business, be it GEC, sports or music, it's very unfortunate that you are operating in the world’s cheapest advertising market (CPT) and cheapest pay TV market and this growth is slow.



 

What is your take on music channels turning into youth general entertainment channel? Are you looking at foraying in the youth space?

 

No way. It is a lovely genre to be in and is growing. Youth programming will drive this market to a large extent.

But I don’t look at great economics that really works in any GEC space, unless and until there is good subscription that one is getting. If you strip off the subscription from all these channels and make them play pure advertising driven GECs I think each of them will lose money.

 

Where do you see the music channel industry heading, considering music is easily available, you think there is still a market for music channels?



Linear television will always have its market. Music will continue to be in a market where there is a television population which is very huge. There are a lot of people who watch content online and for them we are present online. There is still a large market and it will continue to be that way.

Television is larger than life, especially music channels like MTunes which is very current and new and which plays new music and promos and that is what people look forward to rather than online where you need to make searches for content, while here content just keeps flowing.



 

Why did music and news channels not follow 10+2 ad cap?

 

US is such a free market and FCC is very strict in terms of regulation, but they do not have an advertising cap. Why should the government intervene on how much of advertising air time one should carry. For a moment Pay channels could be directed but definitely not the FTA channels. And that’s what we argued in the court. In short people will not watch your channel, if you put too much of advertising. So why is it that the government wants to intervene with channels and that too for free to air channels. We are not charging customers any money, its free.

If we put in excess advertising, anyways our ratings will fall as no one would watch the channel, and that would affect our business.

Ad cap should have been restricted to only pay channels, as India is the only country, where the pay channels are getting paid from both subscription and advertising.



Government needs to create level playing field. Currently as independent networks, it is a difficult situation.

How do you think music channels can start generating more revenue?

 

Carriage is the biggest drainer. Network channels have the advantage of either not paying carriage or less carriage. Advertising is stuck in the low rate game. Cartelization is a good experiment that we all can get into in order to get decent rates. But, with the plethora of channels available, advertisers have a lot of options.





It’s not just the music channels, but with new GEC launches, competition is getting tough even in the GEC space.



 

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