In the bully versus bully distribution world, Network18’s IndiaCast looks to take the conversation a notch up by housing all aspects of content assets under one roof and discover new ways of monetization
In the changing digitized environment, as broadcast networks gear up to strengthen distribution efforts in order to get a higher return on subscription revenues, one of the youngest players, IndiaCast, the content asset monetization arm of Network18 and its group of companies including Viacom18 and AETN TV18, is looking to play a slightly differentiated game. With the recently concluded Disney-UTV deal, IndiaCast is the second largest bouquet in India after MediaPro and the company is planning a busy year ahead.
The distribution history for the Network18 Group including all companies has been different from its key competitors. For starters, unlike established networks such as STAR India and Zee Entertainment Enterprises, Network18 had largely outsourced its distribution business for a significant period. Also, unlike other networks, where the centrepiece of the game was the Hindi general entertainment offer, for IndiaCast, GE was amongst the last to join a network that was built around genres such as news and youth channels. In effect, this also meant that Network18 channels were already amongst the highest carriage fee-paying channels due to their late entry into the business.
The Group’s first step to reap the advantage that distribution could bring to the table was the distribution joint venture with Sun, Sun18. Even as the jury was still out on whether the move was eventually making any sense for the Network18 Group of channels, Network18 took another important step and set up IndiaCast with Anuj Gandhi as the CEO of the company’s operations.
“When you looked at the business dispassionately at the time, we were in a situation, where we were paying high carriage fees but were making far lesser in subscription than our nearest competitors did even though in most other aspects, such as ratings or even advertising revenues, we had caught up, if not moved ahead already, with the oldest players in the business. It was hence imperative for us to be different from a typical aggregation business. We had to relook at the business and then structure ourselves in a manner that was future ready and where we could leverage all aspects of the group’s content assets,” says Anuj Gandhi.
The target ahead is clear for IndiaCast – be where competition is today, in the next three years.
THE DIFFERENT DNA
The revisit to the structure led the company to look at the business with a platform-agnostic lens. The second filter was to get the rights centralized so that every screen that exposed content and its aspects could be leveraged by the IndiaCast team to be better monetized. Gaurav Gandhi, COO, IndiaCast explains, “It was important to create a structure where all content rights – TV, digital, IPR-led – were housed within the same structure so that monetization could be maximized. Given our experience in dealing with platforms around the world, we sensed quickly that the boundaries between rights are getting blurred – and as the end consumer at home sought content on alternative screens and devices, platforms serving such consumers needed to gear up to the challenge of offering the entire basket to stay in the game. We created a structure so that the negotiating teams are informed, armed and empowered to carry out integrated deals to maximize reach for our content as well as get best value for us... Right now, none of our competitors are either structured or work like this. In their case, if a linear channel deal is being negotiated, someone else needs to be brought to the table for the digital rights or for syndication of content if the platform desires to expand the offering. IndiaCast’s very DNA has been modelled differently.” IndiaCast’s first big move on the domestic side was to do away with silos and set up a format where the same person who discussed distribution, hence carriage or other equivalent fees, was also the person in charge of the expected subscription revenues from a platform. In a manner of speaking, the conversation was similar to the deals taking place in the direct-to home space.
The company fashioned three verticals that have become its key revenue generating points – first, domestic that at present forms the lion’s share of the pie; the second vertical is international business (including subscription, ad sales & syndication) and digital media is the third. The two-fold approach is to ensure that all verticals are maximizing the monetization opportunity and that over the next couple of years, domestic revenues became 65- 70% of IndiaCast’s overall revenues from the current 80%, implying the company wants to see increased growth from its international and digital verticals.
INTERNATIONAL: THE WHOLE AND ITS PARTS
“We were late to the party even for our international business but we progressed quickly in the last two years. Our channels are now available in close to 70 countries already. If we add our content syndication business, the footprint expands to 120+ countries. And with the breadth of the bouquet, we have a lot to offer so the opportunity in the foreseeable future too is very large,” informs Gaurav Gandhi.
One of the first steps that IndiaCast took for its international revenues was to open offices in various markets. The company has offices in the US, UK and Dubai already and is in the process of opening shop in Singapore and Africa. A staff strength of around 30 people is currently employed in India and overseas offices to manage the international business. “It was important to identify the right hubs and then hire very good people because in the case of our international business, we are managing the channels completely,” adds Anuj Gandhi.
For international, all aspects of a channel’s management -- content, advertising sales, scheduling, marketing, promos and so on -- is handled by IndiaCast. “IndiaCast’s overall structure is nimble-footed and hence it is easier to form a concept such as Rishtey, which is at present doing exceedingly well for us in the UK market,” Anuj Gandhi adds.
Viacom18 launched Rishtey as a hybrid channel in the UK. The channel airs content that had already played on Colors in India. It also has new movies, news feature programming, kids programming, music programming and some shows from Network18 Group’s regional services as well. The channel launched late last year and is currently among the top two most viewed Indian channels in the UK on the basis of Broadcasters’ Audience Research Board (BARB) ratings.
The modus operandi here is to identify the best format of the content to a particular market and its TG. This could range from a full channel in a strong international market to just a branded block on a channel that may be already servicing the relevant TG to even take IPR-owned shows to locals in a market in a particular language.
“We also target the mainstream audiences in many international markets in Central Asia, Eastern Europe & Africa by syndicating our soaps & drama series in local languages,” says Gaurav Gandhi. IndiaCast team in fact recently sold the script rights of its show ‘Uttaran’ to a company in Africa to produce the show in another language.
GOING NET POSITIVE
The control of every window of possible exposure has led to various advantages for IndiaCast. Its ability to deal with linear and non-linear content demand has opened up newer opportunities.
The Digital Addressable System (DAS) in a sense reset the business and all players began from the same starting point unlike instances in DTH and so on, where Colors being a late entrant found a lower place in the EPG. The first round of digitization deals in DAS Phase 1 was another avenue where IndiaCast could see the difference, according to Anuj Gandhi. He explains, “Because of our structure, amongst the networks, we were the first ones to close 80% of the deals. We moved to cost per subscriber deals and there was only one face from the company for subscription & carriage. And we have managed great deals that you will see in placement and packages under DAS 1.”
On digital and new media platforms, the benefits are even more visible, says Gaurav Gandhi. “We dealt with the new media business in the last seven months in a pure content play approach and we now have over a dozen digital media deals,” he informs, adding, “On digital, when you are doing a deal with any player – including the likes of iTunes & YouTube – you are doing a multi-country deal and the leverage you can get on such a global deal is substantial. Given that IndiaCast handles all channel and content distribution globally, the teams understand and know all elements, carveouts and caveats while concluding such deals - making us most efficient & effective in delivering revenues on these platforms.”
The big story for the group in its domestic distribution is that for the first time, the group would be net positive. “We would spend less on carriage than what we earn in subscription and this is a positive step. In comparison to any of our competitors, we would have the highest percentage growth in absolute revenues. But we want to be where our competitors are in a third of the time they have taken,” states Anuj Gandhi.
“In our domestic distribution business, IndiaCast’s immediate objective is to get our fair share,” adds Gaurav Gandhi. The company’s guiding thought is that its brands are under-indexed to their market potential and there is significant ground to cover. DAS and the CPS-led deals, according to company officials, will help cut the queue and move ahead. Anuj Gandhi’s vision for IndiaCast is to move to key account management structure. “As the market evolves, there would be fewer but larger platforms. We would not just need foot soldiers, but managers who drive the business. There would be 80% business coming from perhaps 10-12 companies and we would be creating and servicing long term deals, just like the evolved pay TV markets like the US. IndiaCast wants to lead this revolution as it happens and that is what we are gearing up for.”
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