By Ashish Pratap Singh
Despite NDTV’s debatable financial health, CEO Vikram Chandra says people prefer good quality programming over rating of a channel to make it the platform for their brands.
Vikram Chandra, newly appointed CEO of NDTV, has been a familiar face on the channel for 17 years. He has also taken on corporate responsibility, heading NDTV Profit since its creation and making it a leading business channel. Later, as CEO of NDTV Networks, he demonstrated good managerial skills. Now, Chandra will have overall authority and responsibility for all aspects of the company – corporate, operational and channel performance. He will also be a member of the NDTV Board. Here are excerpts from a conversation with him, in which he talks about NDTV’s recent losses, internal restructuring, outlook for broadcasters and ethics in journalism:
After your appointment as CEO, what is your immediate focus?
I have three goals: continue protecting the brand, grow profitability and sustain growth.
What are your additional responsibilities as a member of the NDTV Board?
My responsibilities come more from the fact that now I am the CEO and have to take charge of delivering value to shareholders. There are various sub-tasks within that which I will look into. The three primary goals that I spoke of earlier can each be broken down to some sub-tasks. For example, protecting the brand, we continue to deliver on the highest levels of ethics, compliance and corporate governance. Those are very important to us. We have continued to fly that flag even in the most troubling of times. One just needs to compare NDTV programmes with some of the Hindi news channels. In certain areas, we do not compromise. We verify news stories from a few other sources before flashing them. This is an example of protecting the brand. We are also building shareholder value in profitability. Other than this, we need to look at cutting down wasteful expenditure, maximising revenue without compromising on the brand.
Talking about the channel’s financial health, NDTV has been making losses in the last few years. How will you bring back profitability?
While NDTV is doing what it is doing and will continue to do so, we also need to look at the entire media business in the light of what has happened at the larger level. The media business has been through a very challenging time and this will continue for the next couple of years. There are structural reasons for this. We remain the only country in the world where broadcasters get no revenue from subscriptions. Instead, distribution is a cost area. Because of the carriage fee associated, it is not a revenue area at all. That’s the way things are for various historical reasons. Hopefully, as
we move forward, there will be an inflection point when this will stop. There will be many drivers of this, like when analogue cables give way to digital. Some of those issues of under-declaration, transparency and how revenue is being shared will start to disappear. When this happens, the business environment will become much better for broadcasters. The second reason is TAM ratings. There are strong qestions about the way the ratings are being measured right now. Hopefully going forward, the government will ensure that sample-size is larger and a more credible way of getting the ratings.
The entire business needs to be professionalised across the value chain from top to bottom. It would be good for the consumer, because he’d get better quality programming, good for broadcasters and good for the distribution business as well. That is the general direction in which the industry is moving. Give it a couple of years, and it will become more transparent and structured.
All news channels look similar today. Why is there no innovative/clutter-breaking programming?
I would contest the claim that all news programmes are similar. They are not. There is crazy differentiation. In the Hindi news category, we had an opportunity to go tabloid when we were a very strong No. 2. We did not, and got pushed to No. 7. Now we are bouncing back, because people like good quality and credible content.
Distribution costs are taking a heavy toll on finances of news channels that have to pay a premium to remain in prime bands. Is NDTV preparing a Plan B?
The government has said it and so has TRAI that things are going to change soon. There is a challenge because there is a market structure right now wherein you have 10-12 time-bands and then you have 120 channels after that. It creates a structural demand-and-supply problem, which is why carriage fees are what they are. That will change with digital and DTH. In fact, it is already changing. However, when one sees the benefits of that is debatable. I’m calculating that it will be around two years.
The regional news space has grown very fast. Why isn’t NDTV in it already, except the tie-up with Hindu down south?
We are not in any regional channel space. We have very good properties like 24x7, NDTV India, NDTV Profit that require a little bit of work as we are looking at repositioning. We have NDTV Good Times and also our consultancy business. So we have six strong properties. Each one of them has the potential to be the No.1 in its category, if it not already is. Once we achieve the objective of strengthening them and taking them to leadership position, we will look at growth options.
Tell us a little about the new lifestyle channel that NDTV is slated to start. The only channel we have is NDTV Good Times. We will look at opportunities.
NDTV started the concept of split regional beams. What happened to that? Was it too early for the country?
Those are interesting areas that we must look at. We still need to fine-tune our strategy. It is a great concept, for it happened ahead of its time.
NDTV India has not managed to break into the top three in the Hindi news genre. What are the reasons? Has ‘not being loud and over the top’ compromised the ratings? At the end of the day, the channel has to be a viable business…
Viewers and advertisers are increasingly going to realise that you don’t necessarily have to be the top two or three in terms of ratings to attract good advertising. They look at ratings, but also want to be associated with good quality programming which is not hysterical and over-the-top. What we would like to tell advertisers is that, when you come to the NDTV group, we will be a very good platform for your brand to get the brand message across. Maybe, there is someone ahead of us in rankings. But we also have to look at the sort of programming that draws people to us, which is high quality news programming with the finest news anchors in the business. If you are an advertiser and want to reach out to the Hindi news-watching segment that appreciates good quality content, we will offer a good platform. Others too offer good platforms, I’m sure. But even in the worst times, we don’t say certain things just to get short-term benefits. In 2008-09, a real crisis time for our business, it would have been easy for us to go tabloid over the losses we made. We are very clear on sticking to certain norms, guidelines and ethics. We will not dig scoops when we think there is reason to doubt it. We will not flash stories just because we think it will get us short-term mileage. I am sure there are enough advertisers out there who would like to be associated with such a channel.
Tell us a little about internal restructuring at NDTV.
After we went into the entertainment space, the markets fell miserably in 2007-08. It became clear that we were not going to be doing a quick media IPO or listing networks. Fortunately, we realised it early enough. We had a lot of debt. But during the crisis, we were able to buy back that debt on discounted rates. We cleaned up the balance sheet. We realised that we did not have the pockets to sustain the cash burn on the entertainment business in a bad market. Now, when people talk about another double-digit dip in the offing, we don’t have a meter ticking. There are no debts and no monthly interest payments to make. We are cash-rich and even if the market goes down for 2-3 years, we’ll survive.
The recent Nira Radia case cast aspersions on the credibility of journalists. As an industry, did news media address the issue well enough?
I don’t want to look at any one case. The media has been confronting the issue of where its roles and responsibilities lie. At NDTV, we have a very strong ethics panel and compliance policy that we will continue to strengthen to ensure that everyone in the company meets the highest standards.
In the light of what happened at News of the World and Rupert Murdoch, where does a journalist draw the ethical line?
We have guidelines and an ethics committee. In fact, we already had these from the time NDTV started. Now, we will ensure that everyone in the company understands their importance. There will be enhanced scrutiny. Policies that we already have will be clearly communicated to everyone at NDTV.
Feedback: ashish@exchange4media.com
