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Megha Tata on transforming Discovery, TRAI tariff order impact, content strategy & OTT play

Discovery's streaming platform will launch early next year

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Megha Tata describes her current gig as a ‘dream job’. She draws parallels between her rise as a top media executive with brand Discovery’s journey in India. “I feel at home. This is the kind of genre I can relate to, not only as a consumer but also as a business proposition,” the American broadcaster's new managing director for south Asia admits. The possibilities of what can happen to Discovery Communication India and its brands in the country are what Megha is most excited by. She's taken up the top job at a crucial juncture with several challenges that need addressing. The disruption in regulation and the overall ecosystem has made matters more tricky. In order to gain a better perspective of how Megha intends to navigate a complex terrain and steer Discovery forward, Indiantelevision.com caught up with her for a wide-ranging chat.

As a company, at which stage do you see Discovery in at the moment in India?

I think Discovery has gone through its ups and downs in the last 25 years. I think more ups than downs, which is fine because that’s how life is. At this stage, for me, it’s more in the space of transformation. There was a transition, and now we are moving into the transformation phase and that is not only true to India but globally as well.

I have spent the last two months observing and absorbing what is happening not only in India but globally. I have spent time with my regional counterparts around the world and it was heartening to see that I’m not the only one who is going through that change which is happening around the world. That's great because when globally the company is moving in a direction and you’re going to be moving along, you know, the pace of that movement will be much faster. So that is where we are, we are in the process of transition and transformation from linear to non-linear.

There is so much to be done. We have to prioritise our focus areas especially in the next 12 to 18 months. We have put together a strategy, which is very clear cut with three pillars at its core that would help to grow our business.

Which are the problems that you have inherited and what problems do you see ariseing in the future?

I see the glass always half-full, that is my attitude in life so I don’t see the problems. I only see opportunities and let bygones be bygones. The future is beautiful and that’s what I’m focusing on.

As part of the whole ecosystem, who is to predict how it will play out? We know what our strengths are and what are our weaknesses, and accordingly, we play to our strengths and that is the plan. Discovery is in that phase now which is great because that only makes our job in India that much more, I won’t say easy, but at least aligned to what the global mandate is as well. I am seeing it as a great opportunity for stuff we can do in India with all our brands.

There is a perception that Discovery’s brand in India has been diluted over the years. As the head of the company, how would you like viewers to perceive the brand going forward?

On the contrary, Discovery’s brand continues to be strong in India. Given huge focus on never seen before thrilling content, we have an opportunity to take Discovery brand to a greater high in the country.  You will see emerge even stronger in the time to come!

How do you see each of the brands in your portfolio in terms of their position in their respective segments?

We have identified three key pillars that we want to focus on.

We want to have an unparalleled leadership in the infotainment space. While we are the leaders, we want to scale it up further. Between Animal Planet and Discovery, we intend to do that. That will happen through not only the global content which we intend to bring in a bigger and better way, but also by investing in local Indian production.

Second is the kids’ genre. We have a great play in the Discovery Kids so far. It is the fastest growing kids’ channel. We want to grow that business to become a formidable top three player. So not only our existing IP, but adding new IPs to it which we believe will have a resonance with Indian kids. Little Singham has done extremely well, so we are going to add more episodes, acquire more content, add another IP.

And the third integral part is getting into the D2C space, which is the way to go if you want to survive. We will be coming up with an OTT platform very soon. We are very uniquely positioned to be different in terms of what is out there.

Will your OTT platform work on an AVoD or SVoD model?

Both.

When are you launching it?

Hopefully, early next year.

What sort of content can we expect on your streaming service?

The beauty about Discovery Networks is that we have 300k hours of content and we add about 8000 hours of content every year to it. That is the depth of the library we have. It is huge. We are not going to use all of that and put it up on our OTT platform. We will see what the Indian audiences would like and then divide it by genre. We will be an aggregator of this content. Our partnership with Dailyhunt is a testament to the fact that there is keenness for content like this. 

When we partnered Dailyhunt, the audience reaction and consumption we got was outstanding. 400 million views, seven million MAUs and a lot of that are coming from regional content. We decided to invest in languages early on. We are already available in five languages, adding three more. So, Discovery will have eight languages. Kids will have six languages, Animal Planet will have three. It is a big thing for us to be available in so many languages, with rationalisation and localisation of our products.

Does your partnership with Netflix continue to exist?

Yes.

What does the future hold for Discovery Jeet?

Jeet has done its bit and it will play its course out. There is no plan to resurrect it. It will have its own course for an exit at some point.

What about DSport?

It is in a happy place, it is doing what it was meant to do.

Any other partnership you have struck for content distribution?

Not specifically with content distribution but there are many conversations on, with big players wanting to partner with us especially after what they saw with Dailyhunt. Now that we are saying that we will officially be launching our OTT, so more conversations are building up. It is pretty positive.

How did the TRAI tariff order impact your subscription and advertising revenues?

It is still playing out, there are many moving parts to it, and maybe it will take another few months before it settles down. So, we have also been impacted like any other company. We fared well given that we are a special interest proposition. We could have had the worst impact, but the main reason it didn’t was that our brand pull is so strong that the consumer demand remained high.

With the TRAI order and the explosion of digital content has some of the advertising money moved out of TV?

I think overall there has been a movement from linear to non-linear. Advertising is moving to digital but there are areas of challenge. An independent research mechanism does not exist in the ecosystem, and that becomes a question mark for a lot of marketers in terms of how the money is getting spent. There are many questions related not only to us but at an industry level and the issue which is being discussed in many forums. In our case linear has been our mainstay of revenue whether it is through ad sales or affiliate sales. OTT is yet to happen, it just recently happened. We are very new to the digital revenue space.

What’s your take on advertising expenditures on television for the year?

I think there is a positive story and I feel overall there is going to be growth. There were lots of cricket happening and elections were a positive spin. There is an India positive story. That will translate into advertising growth.

Are you facing a challenge in selling your inventory?

I think for Discovery, FCT is a challenge and that’s true for every genre, not just us. But what’s unique for our genre, I think we are probably the other genre after news which has the possibility to create branded content through branded solutions. I think there is an opportunity for growth there. We have done a bit, but we have really touched the tip of the iceberg. There is a huge opportunity for us to drive revenue from branded solutions.

We are doing some of it. We have a dedicated team to deliver that content and promise. It has to go beyond content. I think it’s an opportunity to bring brand solution as a proposition far deeper and stronger connect with a brand, so the brand looks at you not from a transactional point of view but as a partner.

Ok. What’s your take on the current TV audience measurement system?

Let's put it this way. From where it was to where it is, there has been growth. They are now in 40,000 odd homes. That’s much better than 8000 homes. Is that enough? Not according to me. In a country of over a billion, 40,000 homes is not a benchmark. In that, special interest channels lose out because you know your allocation of boxes is so minuscule. If a person puts off one box, you have a huge drop in ratings, it does not make sense. It is an evolving conversation. BARC has its own view, there's a cost angle to it. So, it’s multiple layers of conversations.

You’re now making a move into digital. How do you view the current scenario around a unified currency for digital measurement?

Absolutely the need of the hour. Because that is what is missing in the whole digital economy. I won’t take names, but you know there are only two players making money on digital in the country. So, is there actual revenue out there in digital? That’s the question.

What has been the rise in your topline?

I can't say exact numbers, but we have a good growth story and we are a profitable company in India. A lot of our revenue growth has come from affiliate sales. And we have a good mix of revenue which is coming from affiliate as well as ad sales. It’s a good healthy mix, it’s skewed towards affiliate sales.

Your vision for the brand in the next two-three years?

Unparalleled leadership in the infotainment genre, among the top three positions in kids segment, and to be the number one real-life entertainment OTT service in India.

For the ecosystem at large, are there any potential hurdles that need to be solved to amplify the growth?

I think the biggest is the NTO and TRAI challenge that every broadcaster is facing. That needs to be addressed in some form or other. There is so much ambiguity right now that needs to be addressed very quickly.

Has the TRAI tariff order resulted in adding more pressure on a network like yours?

In the new regime, content has become a bigger king. The proposition has to be very distinctive. If you are one of many you, may lose out. We are so distinctively different and our proposition is so specific and so strong, that we continue to have a strong pull even after NTO.

Going back to your OTT proposition, how do you see India’s OTT landscape? Is there space for all or we will see consolidation?

There is bound to be consolidation. There are bound to be some exits in larger OTT space. I think five or six could be a happy mix in the existing play out. What we propose is very different. We will be the only one to come out with that kind of proposition. Hence, we believe there is a good opportunity, audience out there for us to offer such a proposition. But I think some form of consolidation or exits might happen.

In terms of OTT content, there seems to be a gap on the documentaries front. Do you feel you are uniquely positioned to fill that gap?

Yes, definitely. If you look at the existing players, the kind of content they have in their real-life entertainment, all of them put together would be ranging between the 600 to 1200 hours of content. We will be launching with 8000-10,000 hours of content. Our repository is so huge. So, that's our edge, that's our USP.

Where will OTT consumption happen going forward – small screen or larger one?

More small screens, more mobile phones, data getting cheaper, more people will be watching it on mobile. 

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