Taking a high profile exit, rapid expansion in the English Cluster as well as demonetization in his stride, MK Anand, MD & CEO, Times Network now aims to conquer the Digital front and take the company to over Rs 1,000 crore
BY SIMRAN SABHERWAL
‘Action Begins Now’ – This is the tagline that greets us as we step into Times Network’s office in the business district of Lower Parel in Mumbai. There couldn’t have been a more appropriate tagline too, as the television arm of the media behemoth Bennett Coleman & Co. Ltd (BCCL) has had an action-packed two years and has nearly doubled its bouquet offering from six to 11 (Times Now, ET Now, Magicbricks Now, Movies Now, Movies Now 2, Movies Now HD, Movies Now 2 HD, Romedy Now, Romedy Now HD, MN+ HD & Zoom) and seen a great run rate as far as revenues are concerned in the last three years.
For MK Anand, who recently stepped into his fourth year as MD & CEO, Times Network, this was a report card year and an assessment of the results for plans laid out earlier. He says that over the last three years, the company managed to scale up and sustain its topline growth until it was hit by the demonetization hurdle last November.
While the agenda for Anand’s first year in office was at the structural level with the focus on improving transparency and integrating management processes, the focal point in the following two years was on an internal benchmark survey that threw light on the employees’ role versus their remuneration both within the company and the industry. Says Anand, “That’s a very important activity that we did to bring everybody at par with reality. Once we corrected that, we got in a strong quarterly KRA-based monitoring, reviewing and feedback system.” These implementations have helped improve efficiencies, says Anand: “The changes in the last three years have led to a system that doesn’t have many inefficiencies. Overall, this brings better innovation, more competition, more competitive spirit, aggression, etc.”
Times Network also invested significantly in people, with training significantly going up. A “more structured induction programme” and “attitude level interventions for training workshops” were set up with special emphasis put on sales training.
DISTRIBUTION: GETTING THE RIGHT VALUE
Distribution has been particularly challenging for Times Network, which had “a handicap in distribution” and set up its own integrated distribution team post the dissolution of its distribution/subscription tie-up with MSMD - a joint venture between Sony's Multi Screen Media Pvt Ltd and Discovery Communications - popularly known as TheOneAlliance. Times Network went on an aggressive drive to up its distribution and expanded its footprint to LC1 markets. Commenting on distribution, Anand says, “As for distribution in FY17, I am very happy with the team’s performance. However, am I happy with the value that distribution subscription is giving to channels like ours? Absolutely not!” According to him, the English and News broadcasting space is “seriously undervalued” and compared to competition, Times Network’s subscription revenues are considerably lower, primarily because it does not have a driver channel like a GEC or a kids channel. Anand adds, “MSOs and DTH operators look up to English broadcast networks like us as we drive up the ARPUs (Average Revenue Per User) and the premium-paying subscriber cannot do without us. However, when it comes to weight and power at the negotiation table, it’s unfortunate that an entertainment channel is required even to get the right price for a news channel or an English movie channel. That way, I am not satisfied at all.”
In pure numbers, currently only 15% of Times Network’s revenues come from subscription as against 25% for its competitors but on a positive note, the subscription revenues have grown significantly. Says Jagdish Mulchandani, President & CFO, Times Network, “In terms of percentage, subscription is growing the fastest, because our base was pretty low. In the last three years, we would have grown at least 30%-35% CAGR. We were a negative network based on subscription income, but we have converted that to a positive network though we are still far away from our objectives.”
“Subscription has to play a much bigger role in the overall pie. Around 15% to 18% of the overall revenues come from subscription, but it needs to be around 25% to 30% of the overall pie to sustain it much better and make the business more viable,” Mulchandani adds. Anand also concedes that Times Network has now “started getting accepted as a reasonably significant broadcaster with a decent number of channels in SD and HD across the English entertainment and English news genres”. “We have started seeing a difference in the way we are treated by our partners - DTH operators and MSOs,” he observes. Commenting on the overall growth, Mulchandani says the company has seen a CAGR of 22%-25% YoY for the last two years, but this year the growth rate would be lower on account of demonetization. He says, “We were targeting similar growth this year as well, but post demonetization we’ve had to scale it down. This year, we would see a single digit growth of 6%-8% depending on how we close it, thereby impacting our topline growth and the overall revenues as well. However, when we look at the adex and the Fixed Chart Point (FCP) drops in the genre, we still see that our revenues have been much better.” Despite the demonetization hurdle, Times Network has managed to grow the pie and broad-base its earnings on account of the channel launches and reduced its reliance on the flagship product, Times Now. Branded content is another stream which has grown considerably with revenues crossing the Rs100 crore mark. Anand believes that considering the influence of the company, branded content should be worth a lot more - at least in the range of Rs 300-400 crore.
‘Arnab’s exit genuinely didn’t hurt; the numbers prove it’
The office of MK Anand, MD & CEO, Times Network, was recently refurbished and this, remarkably, coincides with the major changes that are taking place in the organization. Talking candidly with Simran Sabherwal, Anand says the departure of Arnab Goswami didn’t really matter to the network, and that his successor, Rahul Shivshankar, ticks all the right boxes. He also talks about the ongoing rating tussle with CNBC-TV18 and lists the challenges ahead for him and the network.
Q] Times Now had become synonymous with Arnab, he was the face of the channel, built on his persona...
I will correct you and this is something I want to correct. Arnab Goswami was built on Times Now, Times Now was not built by Arnab Goswami. Times Now was launched in 2005 and would have still been here even if someone else was the leader. So, how can we say that he made Times Now, in the first place? There was a bit of misuse of the single face and freedom that it started looking like that and probably that’s the reason that when the event (Arnab’s departure) happened, the reaction was ‘Now what’s going to happen?’ I don’t want to waste any more time or breath to say this that his going genuinely didn’t hurt and there’s proof that it didn’t matter as you can look at the numbers.
Q] You got Rahul Shivshankar on board...
Rahul has the right amount of aggression and affability. We needed to get somebody who had the personal ability to make the team work together. That’s a great advantage I have with him. He doesn’t look aggressive, looks quite mild, but he is absolutely capable of calling the shots and cracking the whip when required. That’s a quality at a management level we were looking for. His news sense was made in Times Now and he has also got the same tone and tenor.
Q] You have filed a complaint against CNBC-TV18’s budget rating, calling it unethical...
We have written to the Telecom Regulatory Authority of India (TRAI) asking what is the legal position on multiple LCNs (Logical Channel Numbering) and frequencies since it’s not written anywhere. This is not about multi-frequency but about opportunistic multi-frequency. If you want to do multi-frequency, then do it through the year, pay for the carriage annually and sit on that leadership as you are paying to be present on five frequencies and getting the traffic. In this case, you are not paying for it but opportunistically on Budget morning knocking off the regional channels in your network with the business channel and then taking the business channel off the morning after. You have no purpose to do it but to spike your viewership and to prove to the world that you have 90% viewership on Budget day, nine times more than competition. If the intent is to tell the advertiser that my product is bigger, say it by all means but if you are not bigger the next day and the day after, then what is the intent of the ad? It is cheating. If you did it on Budget day to show you are No. 1, then show your leadership every other day. You can’t! Week after week, the leadership alternates between CNBC-TV18 and ET Now, it’s a 50-50 play. We have checked with NBA (News Broadcasters Association) and asked the IBF (Indian Broadcasting Foundation) to intervene and gone to TRAI. TRAI has sent them a notice asking for an explanation and is waiting for the answer. We are not going to sit quiet on this. We are going to do whatever needs to be done to clarify or at least call out the intent.
Q] What could be the game-changers, going ahead?
Digital is an important area. Expanding into regional and Indian languages including Hindi, should be the next phase, we should probably look at it next year. However, I wouldn’t say it’s a game-changer, it’s more of a natural expansion of our news capacity into all these markets. With Times of India’s local news capability and our broadcast ability, I want to start with any of the regional markets – may be Bangalore, Kolkata, Chennai, as Times of India has editions there. I want to look at a pilot model where we can use the local infrastructure of the print side and TV infrastructure and the brand.
Q] Would you be then looking at a GEC?
You can never say something is totally out. That depends upon how the market is. Financially, scale-wise we are approaching a decent size and scale and the next growth has to come from diversification into mass. As a group, our strategy is to sit at the top of the pyramid with a percentage of reach and revenue. Now that we have the technical ability, to play mass is not impossible. News has to be first, but from the point of view of a game-changer, going into entertainment is highly advisable. This could be in the digital space. Digital is more of a distribution of video than a new business and eight years down the line, broadcasting is going to be digital and there we have an opportunity.
Q] What are the challenges you see looking ahead?
One challenge is being limited in English. Two is competition heating up in certain sectors, such as English entertainment, which is a good and a bad thing. Good because if there is hyper competition, it means that our choice of market is not wrong. Bad because we have seen costs rising almost vertically in English entertainment content and a weaker rupee doesn’t help. I wouldn’t look at distribution, carriage, etc., as challenges anymore.
Q] How are you gearing up to take on Republic?
I don’t think we should hyphenate the two at all. We don’t need to gear up, we are already up there. They need to gear up to sort of climb the mountain. My best wishes to them.
THE A-TEAM @TIMES NETWORK
NIKHIL GANDHI, PRESIDENT – REVENUE, TIMES NETWORK
On Focus Areas: The focus area is to take the brands into a whole new territory in terms of revenue growth and profitability. I have drawn a threefold strategy - to get the right people, move to a brand-led approach rather than a product-led approach and most critically be aware of the growing competitive environment. With the huge number of followers that we have on Facebook, YouTube, Twitter, I am putting together a strategy of how we can monetize all of this because these are the audiences that advertisers are seeking. We are going to integrate the social media connect with television and digital and put it together and offer the client one big solution.
On Growth Drivers: We want to take branded content into a whole new space altogether and scale it up, for each and every product and IPs that we create. For Zoom, we are looking at a new digital play. From a revenue perspective, we need to grow some of our brands on the ad sales.
RAHUL SHIVSHANKAR, CHIEF EDITOR, TIMES NOW
On Focus Areas: The emphasis of any professional news brand should be on projecting news based on facts and that is central to my journalistic career. A large number of news channels, including prospective ones, have been built on the journalism of views and rhetoric and I believe that we should be aggressive on facts and good hard stories that change lives and alter our perception. That’s what I want to build on.
On The Core Team: We have a very good set of individuals who have been associated with the brand for years and they are central to the core ethos of Times Now. It’s because of them that this channel is in a leadership position and hasn’t suffered despite exits and that’s a huge credit to the team. It is an extremely tight machine which binds together and each member of the core team understands their place in the team and executes their role to perfection.
VIVEK SRIVASTAVA, SENIOR VP & HEAD – ENGLISH ENTERTAINMENT CLUSTER & ZOOM
On Zoom: While we were a leading Bollywood entertainment brand, we were not playing the latest music. Now we do not play music that’s more than eight years old. Secondly, we increased the tempo of music and adopted mood-based programming across day parts. Thirdly, we changed the language in which we were talking to consumers. We had shows like ‘Music Takatak’ and ‘Acche Din’ - two different vocabularies while talking to viewers. Now, we have shows like Music Takatak, Loudspeaker, Toofani Hits, which are in the same zone and talk to the hardcore filmy music viewer. These things collectively have given us that bump up in GRPs, we have gone up from about 9½ to 12½ GRPs.
On the English Cluster: The space is about smart acquisition, smart scheduling and smart segmentation and this is our mantra. You play the best movie in the best slot and get the ratings and combat competition. The English movies segment has been the most stable space after BARC has come in with no unexplained fluctuations.
SANDEEP GURUMURTHI, EXECUTIVE EDITOR, ET NOW
On Key Differentiators: The one key differentiator is that we are a hardcore news-driven organization with aggressive focus on agenda-setting rather than following a template. We are nimble as we don’t have the overhang of a 20-year legacy. While the nature of content is commoditized during market hours, the innovations we have brought on the screen are a differentiator. Our USP is that we are a fiercely independent newsroom and I can say with authority that there has never been an instance of anyone trying to influence me or my team’s views.
On Growing the Genre: We have led the genre for a large part in the last couple of years and have helped grow the genre. We have had considerable success both in terms of viewership and the response that we get from various stakeholders – be it the industry or the government. People engage with us because they see that the brand has evolved significantly over the last two years. Looking ahead, I am reasonably hopeful that in three months we will be in the market with a significant disruption that will again force the entire category to look at English business news space. We are looking at how to get more people to watch business news post market hours.
JAGDISH MULCHANDANI, PRESIDENT & CFO, TIMES NETWORK
On Growing the Revenue Pie: In the last three years we have added products both in Standard definition (SD) and high definition (HD) and have been able to grow. Looking at CAGR, we are growing much better than the market. This year apart from ad sales taking a dip because of demonetization, every other revenue has been intact. The subscription pie and branded content have been growing almost at the same pace and have done well. The ad sales stream is likely to pick up and will be back on track.
On Growing contribution of English Cluster: Going forward, English movies will have a much larger revenue share in the overall pie. News sometimes becomes seasonal as elections and any big event happening in the country gives you a peak. But when you take the English cluster, it gives you a steady rate, because of the inventory and the right products.
WHEN TIMES NOW WAS IN THE NEWS
The biggest news from the Times Network was the exit of star anchor and former Editor-in-Chief Arnab Goswami. In the decade that Goswami spent at Times Network, he had helped catapult Times Now to numero uno position and his dominance on the primetime 9 pm slot made Newshour – and even Times Now - synonymous with him. While many wondered how Times Now would fare post Goswami’s exit, the channel has managed to retain its market-share of 42% (Source: BARC| India Urban| NCCS AB 22-50 Males| Wk 50'16-10'17| 24 Hrs|Relative Share %), though rating of The Newshour has seen a dip. Times Now was often criticized for its over-dependence on Goswami, with limited scope for others, with The Newshour driving the rating and revenue game. But, all this is set to change now with Rahul Shivshankar stepping in as the new Editor-in-Chief, and efforts being made to broad-base shows and anchors. For starters, Shivshankar comes on at 8pm with ‘India Upfront’ - and not 9pm as Goswami did. Explaining the rationale behind this, Shivshankar says, “The Newshour is associated with a rhetoric-driven format and that is what Arnab excels in. I wanted to broad-base and expand primetime as it is not just 9 o’clock. We also have to ensure that we bring credibility at different times.”
“The earlier system did not have too many IPs. We will have more IPs on the channel because the channel deserves more IPs, and the viewers deserve more IPs,” Anand declares. “In addition, we will ensure that we monetize all IPs, that allow us more potential for sponsor engagement and more activities for advertisers to engage with their customers. More IPs is not just because we arebroad-basing but because this is how the channel should have been.”
BREAKING OUT OF THE MOULD: ET NOW
Talking of ET Now, Anand says that he is happy with the performance of the business news channel and on the financial front, ET Now “has caught up” with CNBC-TV18, though distribution remains an area where ET Now is still to catch up. In terms of ratings, ET Now has a 41% share compared to a 51% share of CNBC-TV18 (Source:BARC| Mega Cities| NCCS AB 22+ | Wk 7-10'17| 24 Hrs| Relative Share %) making the genre a virtual two-horse race.
Sandeep Gurumurthi, who took over as Executive Editor at ET Now a couple of years ago, says in his time at the helm, the channel has “brought the rigour of a general news channel to the business news channel in terms of systems, processes and the way we attacked big stories”.
In addition, the business news screen was completely redesigned with more actionable information being provided to the viewer. ET Now’s content offerings’ were also broad-based post market hours to include general news like politics and sports. A major shift was breaking the set pattern of the FPC duplicating a general news channel when it comes to breaking news. Gurumurthi says, “We demolished the concept of a FPC and said that we remain with the news when we break a big story. We stay on the big story for 10 hours or even two to three days as against just half-an-hour, as was the norm earlier. If it’s a big story, then we put all our might behind it and the entire organization works on that story. We also broke the morning and evening time bands of traditional business channels and integrated to become one news team, synergizing our people to one purpose.”
LEARNING FROM THE ZOOM REVAMP
Times Network had revamped Zoom - its first channel - from a glamour product, with elements of Bollywood and fashion to a channel that jumped the hurdle of social media in June, 2015. However, the changed format resulted in a loss of viewership but corrections soon after have shown encouraging results. Says Vivek Srivastava, Senior Vice President & Head - English Entertainment Cluster & Zoom, “On Zoom, we had a bit of a challenge post the revamp as the numbers were not quite in the range that we had expected. We fell down to number 9/10 in terms of ranking. In the last six months, we have slowly and gradually come up to number 6, if you also consider the FTA channels. If you don’t consider the FTA and the retro channels in the picture, then we would be the No.3 brand. The ramp-up has been fantastic and also means that we have taken the right steps.”
AT FULL THROTTLE: THE ENGLISH CLUSTER
A bright spot for Times Network was the performance of the English cluster as with four launches in 2016 – Romedy Now HD, Movies Now HD, MN+ HD and Movies Now 2 - it was an action-packed year. In addition, the English cluster saw an aggressive marketing push which helped bump up numbers, particularly on the TRP front with Movies Now (19%) and Movies Now 2 (11%), making up one-third of the genre (Source: BARC| Mega Cities| NCCS AB 15-50| WK 50'16-10’ 17| 24 Hrs| Relative Share %)
Says Srivastava, “We became very aggressive on the marketing front. We believe that if we are the No. 1 channel, we have to be No. 1 not only in viewership but also in share of mind and if you see the share of voice in marketing, across all networks, our brands typically have had the maximum share, and that’s why our properties have also done well. For example, most of our premieres have done better than the competition.” While Movies Now has consistently been among the top two in English movies, what’s “heartening and a delight” has been the performance of Movies Now 2 which in a short time managed to pip HBO and is in the top five channels in the genre. Srivastava believes that Movies Now 2 “will get very close to the No. 3 spot in the next financial year”.
Times Network has bet big on the HD space and this belief has paid off with the success of its four HD channels. The next year is expected to see the next level of growth for HD with more cable operators focusing and pushing HD channels - particularly English and sports channels - to drive up their ARPUs. With HD fitting in perfectly with Times Network’s top of the pyramid positioning, targeting the influential top 2% of the population, the company believes its HD proposition offers the advertiser the right focused audience and brings a significant contribution to revenues.
Following the Government’s demonetization announcement in November 2016, which pulled out of circulation 85% of India’s currency, Times Network initiated a nationwide campaign - ‘Remonetise India’ - to bring the economy back on track. The campaign was launched on January 4, 2017 and in the first phase ‘Remonetise India – Invest in the Nation’, activities included Telethon, Go-Cashless Rally and Sahayta Camps. The second phase, ‘Help your Help’ was launched on February 15, 2017. The campaign aims to build awareness and reach out to urban Indians and sensitize them to aid financial inclusion. Commenting on this initiative, MK Anand, MD and CEO, Times Network says, “Times Network reaches out to about 4.5 crore urban English viewers every week. This the largest premium, influential audience in the country and the Network in fact is an influencer to influencers.” He adds that Times Network’s reach and access to influencers and decision-makers made it imperative for them to help the transition from cash to digital payments, and adopt it as a CSR initiative. “It started as sort of a poser that can we as a company influence the economic growth of this country? Can we add one percentage point to the GDP growth of this country? It was a lofty idea that if India is growing at 7.5%, can we at Times Network do XYZ things and make this 8.5%?” Anand says.
GOOD GOING ON THE INTERNATIONAL FRONT
On the international front, Times Network is now present in 100countries. Post the UK launch of Times Now, the recent expansion enables Times Network to add a potential audience of 1.4 million Indians in mainland Europe, taking the international footprint to 10 million on five continents. The international presence helps the network particularly to grow on the IP front and it has engaged in market contact and expansion by way of ground activities in the Gulf, US and Singapore.
NOW, THE BIG FOCUS AREA IS DIGITAL…
With Times Network Digital now being a separate business vertical, digital expansion will be a key focus area. Earlier, the digital mandate was given to the individual teams and Anand admits that it was a mistake. He says, “That was a mistake because broadcast natives cannot really be digital. With all due respect to people who were handling it, we would have been a lot more ahead if we had a digital native in charge.” As part of this strategy, Times Network will go big on acquisition of talent, looking for digital natives in the next 12-18 months, with the aim to take on their broadcast competitors in the digital play and possibly become larger than them in this space.
For the year, Anand says that 2017 will be the “end of the consolidation of the English leadership which we have effectively been able to execute and deliver”. Looking ahead, he adds that, “Some amount of brand work still remains, consolidating the leadership and getting paid for what we are really worth. That’s not a one day job, and that’s the last part of my work, that remains in the current phase. I would look at CY2017 and FY2018 as consolidation and getting to the final stage of monetization.”
On the channel front, the network will be launching Times Now HD and Viceland in partnership with Vice media. Commenting on expansion beyond the English space, Anand says, “Two areas of growth for Times Network, once you are the market leader and taken 30-35% of the total English market, is to enter other languages and go beyond news.” With the infrastructure in place, the focus will be on product launches and ensuring that the “installed capacity is optimally utilized to deliver as many channels that it can” just as it was done in the recent past. Though delayed, due to demonetization, the management’s priority remains taking the company to over Rs 1,000 crore in the next couple of years and contributing to 15-16% of BCCL’s revenues.