Think Disney Channel and the first association that comes to mind is kids. But there is more to Disney India, says its Managing Director, Siddharth Roy Kapur, as the flagship brand of Disney Medianetworks India looks to address the entertainment needs of the entire family and other brands in the Group explore new horizons
By SIMRAN SABHERWAL
On January 1, 2015, Siddharth Roy Kapur completed one year of being at the helm of Disney India. Ever since he took over as Managing Director, Disney India from his predecessor Ronnie Screwvala, three major things happened at the company. Its three-year-old Bollywood entertainment channel, UTV Stars, was rebranded as Bindass Play, and the programming was changed to purely Hindi music. Its movie division, UTV Motion Pictures, notched up success after success at the Indian box office, from co-producing the recent PK, to distributing high grossers such as Kick, 2 States and Highway. And now, the flagship Disney channel is being re-positioned with family programming on the weekends to cater not just to kids, but the entire family.
While the Walt Disney Company India, subsidiary of the Walt Disney Company, USA, entered India’s small screen space with the launch of Disney Channel and Toon Disney in December 2004, its presence in India dates back to 1993. Walt Disney India was formed in August 1993 with a licensing agreement as a joint venture partnership between The Walt Disney Company and Modi Enterprises. Over the last decade, Disney Media Networks (its TV arm) has grown organically and inorganically to eight channels spanning the youth, music, movies and kids genre.
It’s All About The Family
The kids genre helped Disney pave its entry into India. The media conglomerate is confident that it can now engage and entertain the entire family as reflected in its marketing campaign, ‘Shaanivar, Ravivaar only for Paarivar’. Building on local relevance and affinity, the Disney channel will showcase five live action entertainment shows, starting January 31, 2015. The channel aims to target the entire family on weekends while kids will continue to be the core TG on weekdays. The rationale behind this two-pronged strategy is to give kids their regular entertainment dose in an uninterrupted manner during kids’ primetime on weekdays, while crafting inclusive content for weekends when the entire family can watch TV together.
Explaining the shift, Kapur says, “Disney around the world is a family entertainment brand. We have been the No. 1 kids’ network in the country for the last 10 years, and Disney Channel has been the number one kids’ channel for five years running. Now is the right time to move to the next level.”
Vijay Subramaniam, VP & Head – Content & Communication – Media Channels, Disney India says, “It’s a clear progression and evolution for the Disney Channel to entertaining families in India. Everything we offer is complementary in nature and the idea is not to change our avatar, but to develop more avatars; those the brand inherently possesses. Being focused on branded entertainment is our key differentiator and creator of both short-term and long-term value.”
The kids segment has remained a 700 GRP genre for the last five years and in this context, the move by Disney Channel to address a wider set of audiences is expected to help drive revenue growth. Says Nikhil Gandhi, VP & Head of Revenue – Media Channels, Disney India, “I see no challenges in getting the new audience set; the strategy is to drive family audiences during primetime on the weekends and move Disney Channel into that new zone completely. We have got out of the rut of being typecast as a kids’ entertainment business.”
Industry sources peg revenues of Disney Media Networks in India at Rs 700 crore per annum. When looked at globally, Disney theme parks account for a significant chunk of the revenue (second largest after Media Networks, see box). These theme parks allow engagement with the entire family, an interaction that’s missing in the Indian context. With Indian channels, particularly GECs, fixated on daily soaps and reality shows, the approach to provide content during weekends should help garner a larger share of the viewership pie on Saturdays and Sundays. Media planners say that this initiative of brand Disney should also resonate with advertisers looking to connect with a quality audience. With India still being a largely single TV home, the mother, in particular, is seen to be a passive viewer of the channel and the re-positioning could help convert the passive viewer into an active one. With families tuning in, it could aid Disney to leverage and broaden its advertiser base beyond brands targeted to kids. But, will this move also reflect on the ad rates? While some planners believe the ad rates on the channel could increase in the range of five to eight times the current market rate, others say with varied options available, it would be best to wait and watch on how the numbers pan out.
Differentiated Segmentation
With segmentation being the buzzword in the hyper-competitive kids genre, the network today has four channels in its kitty to reach the target group of 4 to 14-year-olds. Disney Junior caters to the first generation of Disney consumers, the pre-schoolers and early schoolers, and is their first touch-point with the brand. The engagement with young viewers continues as they grow with Disney and Hungama. In addition, Disney XD is particularly targeted at boys. Similarly, in the youth genre that targets the 15-24 age segment, Bindass has constantly evolved its content. Be it story-telling formats, long-form fiction formats, or scripted reality shows, the content reflects the changing needs and remains in sync with this TG.
With music being integral to youth expression, UTV Stars - launched in August 2011 with focus on Bollywood, lifestyle and glamour - was re-launched as Bindass Play in October 2014. Disney believes the perishable nature of the content did not make the channel a ‘long term sustainable proposition’. This led to the decision to pre-empt what trends were dictating and leverage the brand equity of Bindass to launch a music channel, in an already over-crowded space. However, Disney says its key differentiator is the Bindass tag. With greater interactivity, it can brand and own the space in what is otherwise considered to be a commodity play. Commenting on this space, Kapur says, “Bindass as a two-channel network serves the youth within the 15-24 age segment. In terms of channel share, when you put both the channels together, we are the largest youth network within the space.” The same differentiated and segmented approach in the movies space has helped UTV World Movies and UTV Action gain traction.
Profitability the Driver
On the revenue front, 2014 proved to be an “exceptional” year for Disney in terms of numbers. Gandhi says, “We have delivered 15-20% growth YoY, and grew 30% on our overall yield across all our genres. More importantly, in the last year, we have focused strongly on profitability which came along with the strategy we put together on what we were doing in the clusters we operate in, grow them in different zones and identify the next level of growth. We have a strict control on the cost measures and a sharp eye on profitability.” On the distribution front, not many competitors have been able to successfully drive distribution revenues like Disney. This is largely attributed to its deals and products, which in turn have helped command a ‘premium value’ even from advertisers.
Cluster-wise, the movie genre, which is mostly a commodity sell space, has been a consistent performer. Gandhi adds that as the kids network commands a 42% channel share, Disney is able to drive a certain premium compared to its competition. Bindass’ growth has been supplemented by creating a periphery of other revenues around it, including AFP and digital content. While advertiser sentiment still remains cautious, Subramaniam adds that new advertisers entering the fray is a positive sign. He says, “New emerging sectors such as e-commerce are driving the growth for the business and have a huge promise and long-term play. There is that much more to look forward to and in the spaces that we are in, we have the advantage of attracting any kind of advertiser that comes into play in the near future.”
A general entertainment channel is missing in the Disney stable, but Disney believes that with its integrated media operations, it doesn’t need a GEC in its portfolio. Says Kapur, “What we have managed to do is create a scaleable broadcast model without the risk exposure of a GEC within the mix, and operate it pretty efficiently at scale.”
Movies, Digital, Merchandizing
The acquisition of UTV added UTV’s prowess in the Indian film industry to Disney. Although 2014 was not a strong year for the Indian film industry, which grew at a lower rate compared to the previous year, Disney managed to buck the trend. Its theatrical releases (under the UTV brand) Kick, 2 States, Heropanti, Haider, Highway and PK, received not just winning reviews but also made a killing at the box office. The year also saw the first Disney branded movie, Khoobsurat, being released in India. Year 2015 also promises to be a blockbuster year for Disney with a mix of small, medium and big budgets (each making up one-third of the mix) with Disney branded titles such as Jagga Jassos, ABCD2, Mohenjadaro and Fitoor under the UTV banner. From Disney’s international stable, Avengers and Star Wars are the tent-pole releases this year.
The other acquisition, Indiagames, continues to maintain its leadership position as an aggregator. Drawing synergies across business units also saw game launches of PK and Kick. The other area which Disney is betting on is merchandizing. With the licence character branded market still at a nascent stage, the company has pioneered efforts to educate the industry and taken the onus to grow awareness and business.
Commenting on the network’s performance, Kapur says, “Every business is self-sustaining and able to perform on its own. We are the No. 1 studio in the country, the No. 1 mobile gaming platform, the fifth largest broadcaster within the industry and the No. 1 licensor of branded consumer goods. Each business is pulling its weight and the next step for us is building synergies around what more we can do using each of these businesses to leverage our franchisees.”
Disney believes that it can drive these synergies, as it is positioned to offer consumers a true entertainment experience across multiple platforms from films, television, retail, consumer products, gaming and mobile. On future plans, Kapur says, “We are in the businesses that we want to be in for the long term, and will grow our existing businesses, focus on building our brands, build affinity with our brands and look at opportunities as we move forward.”
Nikhil Gandhi
VP & Head of Revenue, Media Channels, Disney India
On subscription versus advertising revenues
It’s 60:40, with 40% coming from subscription. We are consciously moving towards a very aggressive play on distribution, not just from widening channels to new geographies, but also through on-ground deals. We command a premium as far as the ground distribution goes, and we have kept at it at a very steady pace over the last five years. Our business should be driven largely by distribution and ad-sales should just come in as an add-on.
Impact of digitization on revenues
The first year was honestly a disappointment. We thought that we would get a great upside of up to 25% on revenues. However, there has been an evolution and maturity lag and we should reap the benefits only in the next 12-18 months. The most positive outcome of Phase I and II of digitization was that the carriage fee came down significantly for us, and it added to the bottom-line.
On ties with IndiaCast post dissolution of JV
We had reached a level where there was a high degree of comfort between both the bodies, and now they are our agents. While the regulator must have come with the regulation, the spirit of the enterprise still remains, so we are very much working together on distribution.
Vijay Subramaniam
VP & Head, Content & Communication, Media Channels, Disney India
On lack of success of home-grown characters
It wouldn’t be entirely accurate to say we have not been able to replicate the success of characters such as Chhota Bheem and Motu Patlu of other networks. We launched Arjun – Prince of Bali, our first co-production with Green Gold Animation (creators of Chhota Bheem), and have also partnered with Toonz Animation India. There is a steady focus on local animation and development, and over the next six months, you will see five such initiatives being announced.
On importance of localization
While Bindass has 100% local content, Disney channel and Hungama have about 20% local content. Disney XD doesn’t have any local content. It depends on what needs you are serving. Certain stories in animation are global and they are successful primarily because animation is universal and the stories can be converted in ethos for consumption within local regions and they are just as popular. At the same time, there are local preferences that are unmet because global animation stories don’t necessarily cover them and you need to pay a lot of emphasis and focus on being able to tell those stories.
On Indian content travelling abroad
That would entirely depend on the story. Stories that are true to their settings and narrative have limited opportunity to travel, but some others can become timeless and classic. Our endeavour is to create great stories with great characters, win our consumers here. Our ability to replicate a local success and turn it into a global phenomenon is known as there are enough case studies on Disney’s ability to do that.
DISNEY: THE NEW SHOWS
Keeping in mind Disney values, which are intrinsic and in consonance with traditional Indian family values, Disney aims to draw in the entire family with new content that celebrates the small pleasures of life.
Maan Na Maan Mein Tera Mehman:
The Rajas are an urban happy-golucky family who discover an ancient photo frame that brings to life any person whose picture is placed in it.
Kabhi Aise Geet Gaya Karo: It celebrates the unity, values and ethics of the tightly-knit Chaudhary family, and shows how they face the challenges life throws at them with a smile.
Goldie Ahuja Matric Pass: A resourceful, ingenious, 40-year-old small trader discovers that his uncle has left him an inheritance with a condition – he needs to complete his schooling to be eligible for the inheritance.
Lage Raho Chachu: The show introduces us to Chachu Vivek Kashyap - a writer for daily soaps, whose hectic life is thrown into a whirlwind when he has to adopt his two nieces and a nephew.
Zindagi Khhati Meethi: It plays on the saying that one doesn’t choose his/her family, but the truth is that one doesn’t get to choose one’s neighbour either!
Feedback: simran.sabherwal@exchange4media.com
