New Delhi: Television broadcasting industry veteran L.S. Nayak, better known as Raj Nayak, has been at the helm of Viacom18 Media Pvt. Ltd’s Hindi entertainment business for the past five years. The chief executive of Colors and Rishtey is gearing up to launch the group’s first Hindi film channel on 8 May. A slew of new shows is also on the cards, including Kavach, Shakti, Shani and season 2 of thriller series 24. In an interview, Nayak speaks about what works on television and the challenges facing the broadcasting industry. Edited excerpts:
You are back to being No. 2 in the Broadcast Audience Research Council (Barc) India ratings this week, after toppling Star Plus last week. Why is it so difficult to keep Star down?
We have never focused on toppling any channel. At Colors, we believe in delivering world-class, cutting-edge content to our viewers. Ranking and ratings are a by-product of the content. Converging creative minds to work constantly on an understanding of what our viewers want has helped us become the channel of choice for them.
What does it take to be No. 1?
There is no single formula for being successful in our business. There are so many variables, permutations and combinations. The business needs passion, commitment, loads of creativity, perseverance, strategic planning, good distribution and quick decision-making, which is based on experience, gut and consumer insights.
What plays a bigger role in success—programming or distribution?
There was a time when content was considered king. Then with the carriage fee era, distribution became God. Now with digitization (of cable TV homes), both content and distribution have become equally important. The only difference is that although distribution is challenging, it’s easier to manage while content is far more complex where the end result is not in your control.
How much did you strengthen your distribution reach just before Barc started reporting rural viewership data?
Even before Barc, our intent was to reach every single household across the country. With Barc coming into the picture, we only fast-tracked our drive. Rural distribution penetration, along with strengthening our deals in some new Barc markets like Goa, Jammu and Kashmir and northeast, took precedence. Even as we speak, we continue to invest heavily in strengthening both Colors and Rishtey distribution across the country. IndiaCast, our distribution and syndication arm, has played a very critical role in us being able to deliver our content to the most far-flung areas across the country.
Any learnings in the past five years on what works on TV and what doesn’t?
Programming in television is very dynamic and it has its own grammar. There is no scientific success formula here, even though people may want to make you believe there is. Creativity is based on individuals, their imagination, experience, gut, their understanding of the pulse of the viewer… Content cannot be explained in a PowerPoint presentation. The ratings game every week is sensitive to all kinds of triggers—festival holidays, cricket, movie releases—and the hardcore competition across categories, not just your own. I have come to the conclusion that content has to be handled carefully and custom-made for viewers.
At what rate is advertising growing for you?
We are growing ahead of the industry average. We just closed the year with an ad sales growth of 25%.
Isn’t TV advertising revenue under pressure as eyeballs move to online video products and services?
Not at all, TV is growing at a very good rate. It will continue to be an evergreen medium. The digital and mobile base is so small that in percentage terms the growth looks big. The future will not be about digital, mobile or TV as these are delivery platforms. The key to the future will be content that is platform agnostic. And, at this moment, TV channels with their bandwidth, experience and pool of talent are strategically well positioned to deliver content. Even the biggest OTT (over-the-top video streaming) players are depending heavily on movies and television content like sports, non-fiction, fiction, news and other genres. They are all wanting to monetize what we produce.
Your flanking channel Rishtey hasn’t really taken off…
Rishtey has done quite well for us. Ever since rural ratings became available, Rishtey has grown almost every week and, in a short time, the ratings have gone up by almost 65%.
We continue to work on content (scheduling) as well as channel distribution and are confident that the channel will continue to grow in the free-to-air (FTA) space. To put it in context, Rishtey is way ahead of Colors and Star Plus in rural markets. It is among the top 10 channels in the country and No. 3 in the FTA space.
Have ad rates of Hindi general entertainment channels (GEC) gone up in the past couple of years or have they remained stagnant?
Of course, the rates have gone up and if we are growing above industry average, it is only because of the rate hike. With inventory going at a 100% fill rate, the only avenue for growth is price hike and I would assume the same for other leading TV channels, at least in the GEC space. As a market, I feel we are still underpriced for the number of eyeballs we deliver. The universe has grown substantially and we are not seeing its full benefit.
Is Colors a profitable entity today?
Of course, we are highly profitable. This kind of business won’t last without high profitability. As a channel, we have never focused on ranking. Our focus has been on the top line and the bottom line. I have said this before, we would rather be a No. 2 channel that is highly profitable than be No. 1 and not be profitable. Ideally, if we can achieve both, that would be fantastic and that has been our endeavour.
Are you looking to launch more entertainment channels?
To start with, on 8 May, we are launching our first Hindi movie channel Rishtey Cineplex. It will compete with all the mainline movie channels. The board has a huge appetite for making the investments, provided we have a convincing business plan with proper RoI (return on investment). As and when the opportunity arises and should the board agree, we will definitely want to expand our offering.
What in your view are the challenges for the Hindi entertainment broadcasting sector in the long term?
Scarcity of good writers—most of them want to turn producers or work for feature films. Talent—broadcasters need to look beyond the current pool to develop new talent. Costs are going up by an average of 15-20% and competition is heating up. Everyone is scaling up their production values, which is a good thing, but has an impact on costs. Advertising and subscription revenue is still under-leveraged and needs to grow.
Any comments on your highest rated show ‘Naagin’? It is so regressive.
I don’t understand what is regressive. It is a fiction show. Internationally you have shows like Vampire Diaries. In the past, we have had movies on the subject. The fact that it has become India’s highest rated show on television shows that the audiences love it.