Story of a Turn-Around

BY IMPACT Staff

Media veteran Pradeep Guha, Managing Director of 9X Media, took on a company on the brink of  closure, and today, it is a leader in the music genre. Pointing out how focus on the smallest genre worked for 9X Media, he discusses the company’s brand integration offerings and what to expect from it going forward

By SIMRAN SABHERWAL

When media veteran Pradeep Guha was first approached by the private equity firm, New Silk Route (NSR) for 9X Media (then called INX Media Pvt Ltd), his initial mandate was to wrap up the company. But, after coming on board as a consultant, Guha realized that there was more to the company and decided to jump in by picking up a minority stake of 15%. He officially joined 9X Media on April 1, 2010 as Managing Director, but it was tough going as the company had losses of around Rs 800 crore  and was in debt of over Rs 100 crore. Some of its investors were considering exiting the company. Fast forward to today, and 9X Media stands strong as a five-channel network worth a little under Rs 200 crore. Guha has not only managed to restructure and turn around the company, but also made it profitable in the super-competitive music genre. There probably wasn’t a better man for the job than Guha, as in his previous stint at Zee, he had transformed the company.

Going back to when he joined 9X Media, Guha says that the entire capital infusion into the company was over and there was no money left. “The entire infusion that the various investors had made into the company, close to Rs 800 crore, didn’t exist. Additionally, around Rs 130-140 crore was still outstanding, payable to the market. The situation was grim,” he recalls. While the news channels INX News had already been sold to Indi Media, Guha decided to challenge the wisdom that existed in broadcasting to be present in every genre and exited the GEC space by hiving off 9X to Zee Entertainment. What remained was 9XM – the music channel. With the focus clearly on music now, vertical expansion was undertaken by building a bouquet of music channels and getting into the regional markets.

Q&A: I always had the mindset of an entrepreneur: Pradeep Guha

Leveraging 9X Media

What helped Guha was that 9X Media had some amount of brand equity in the market and this was leveraged to launch four channels in quick succession – a Punjabi channel, 9X Tashan, the second Hindi music channel 9X Jalwa, which showcases all time Bollywood hits, followed by 9X Jhakaas – a Marathi channel, and 9XO for international music. Learnings from 9XM were taken into account in the roll-out of the other channels. One such insight was that young audiences like to repeat their content; so rotation of songs or play-outs were increased and the library was made tighter, which helped save costs. Special attention was given to the programming schedule for each brand, on what should be played in different time bands, and the result is there to see. What also turned out to be a differentiator in the highly commoditized music space was the use of animated characters such as Chhote Bade and Bheegi Billi. Explains Guha, “The concept of animation was unique to us and we pushed it across the entire network. It’s so unique that it gives me a brand personality, and that brand personality is what is working.”

However, despite doing well on the ratings front, it was almost a year before advertising money started coming in. Says Guha, “Those were the struggle days for each of the new channels. All I had was some revenue coming out of 9XM and that was what was holding out the rest of the brands. From minus Rs 100 crore, year-on-year, we reduced the numbers and today we are comfortably positioned with a reasonable profit on our books.”

Guha is confident now that each brand is here to stay: “The turn-around from a balance sheet perspective happened last year… Four channels are individually profitable. 9XO is not yet making profit, but I am hoping that will happen this year,” he says. The flagship channel 9XM has managed to cross over Rs 100 crore in revenue. On the ratings front, both the Hindi channels, 9XM and 9X Jalwa, are consistently among the top rated channels in a space where close to 16 channels operate while 9X Tashan and 9X Jhakaas are market leaders.

Looking at growth, even though the pace in 2015 was slower than 2014, Guha says that 9X Media did see growth and the company has consistently grown more than the industry. In fact, he says that things started improving in 2015 and it was a turning point for the network. He adds, “We are going to end the year well with a decent PAT and at the PPT level, we will be healthy. My plan for the next year is to more than double that.”

Music: A Potent Genre

Calling music a “potent genre” and a great connector, Guha believes that music should be very high on an advertiser’s agenda due to its connect with the youth. “Music has been highly under-rated because it’s always been the smallest genre in any portfolio but because it is our only genre, we brought it to centre-stage. If this genre has to grow, we have to push it because we are the leaders and we have taken on a leadership stance in the music genre,” Guha claims. However, what does not help is the fact that the 10 sec ad rates are abysmally low-priced at Rs 800 – Rs 1,500, though sources say 9X Media commands a premium of 25-30% over the industry rate. One of the ways that 9X Media has pushed the envelope and integrated advertiser needs is by way of brand integrations. It has been very aggressive with brands in the last year-and-ahalf. The focus here is in creating innovative original format and content by way of songs, music, dance, Bollywood to appeal to the youth. A recent integration had the team at 9X Media write and conceptualize two music videos for ITC’s Bingo! Mad Angles which garnered over a million views each on You Tube. Another innovation was the creation of India’s first crowd-sourced playlist show, AskTrack. The social media based request show airs Bollywood songs based on viewer’s request through Twitter, Facebook and Whatsapp and is sponsored by local search engine, AskMe.com. The advantage of integrated branded campaigns is also that these campaigns are usually short term contracts and they make it possible to have multiple contacts with the same client in a year, and factor in rate increases, though in smaller percentages, each time a new contract is made. Some of the brands that 9X Media has associated with include ITC, Godrej and Idea. In terms of revenue, roughly 16-17% of revenues now come from this vertical.

What Else Is On The Cards?

9X Media has been very active on the Digital platform and 9XM was among the first channels to live feed its on-air content to its website, the Bollywood news destination 9XE – re-christened SpotboyE in December 2015. The website looks to further consolidate its position in the Bollywood space and also airs a 11 minute vignette, SpotboyE on both the Hindi channels. The immense popularity of the animated characters led to the launch of games with the characters as the center of attraction. Last month, a Bollywood based app was also launched.

In an effort to boost up revenues 9X Media has entered the live activation entertainment space and is leveraging its content on-ground by way of concerts. While television has two streams of revenue – advertising and distribution, Guha says that 9X Media currently has virtually no distribution revenue and this could be seen as an alternative source. The company has organized ‘Tashan Nights’ in Punjab with great success. This was followed by its first show by popular Bollywood singer Arijit Singh in Mumbai and another such concert is planned in Delhi. Commenting on distribution revenues, Guha says, “Since I don’t charge for the channel, it is a cost centre and not a revenue centre. So I just have to see that my cost is comparative and that’s what we measure. A few MSOs were asking us for too much and we decided to stay out but a couple of them actually called us back, and agreed to take us on at our price, which means I do have some brand value and customers are asking for me. I am not asking them to pay me anything, however they are definitely earning something from their consumers for my content which they are not passing on to me. Therefore, I am saying, okay you anyway have a revenue stream from your consumer. So, I am not going to increase my cost as far as you are concerned. Take it or leave it.”

Future Plans, Further Growth

Going forward, 9X Media is looking at more channel launches and planning to explore a couple of new genres. With a license already in hand, a Bangla channel could be in the offing and Guha is extremely bullish about this market. While the competition has diversified into other genres like fiction and reality, Guha is very clear that 9X Media will not walk down that path. He explains, “Even with content outside music in some of my competitive channels, at the ratings level, I am still ahead of them. So, why would I then add cost to get less? At best, what they might be getting is certain amount of sponsorship values because of the programmes but those values to my mind vanish with the cost of creating the programmes.” High-definition (HD) is another space that Guha will not invest in. He says, “If I was flush with cash, I might have launched an HD channel, but since everything that I do must go through a very rigorous cost benefit analysis, today I don’t see the benefit of an HD channel, may be six months or a year later. The cost is substantial, and today the market is not bearing that cost in terms of either advertising, revenues or distribution.”

While 9X Media is now in a healthy position, it will be interesting to see how things pan out at the music network in future. With a hands-on Guha at the helm, it will be worthwhile to see how he charts out growth for the company. Says Guha, “If I am a leader, I have to dirty my hands first. I try and lead from the front. I also go out and sell when necessary. I am equally involved in sales and distribution. Since I come from a news background, I understand content and sometimes ask, do you think I am interfering or am I contributing? So far I think I am contributing.”

 BRAND INTEGRATIONS 

Bingo! Mad Angles Music Star in association with 9X Tashan: The client brief was to popularize Bingo! Mad Angles across Punjab. ITC wanted to do something very unique that would have Bingo! enjoy top of mind recall amongst its TG. Since Music is big in Punjab, the team pitched a talent hunt concept to ITC ‘Bingo!’ It was decided to build a property and create a song for Bingo! Four well known artistes were signed and a song was created, which had the brand communication effectively integrated. Product presence was very well showcased. The music was peppy and relatable for the youth. The entire exercise of talent hunt and song lasted for around 3-4 months with on-ground and online auditions across key cities in Punjab. The hunt culminated with the winner getting an opportunity to record the ‘Bingo! Mad Angle Song’ along with the Top singers from Punjab. ITC also printed 9X Tashan’s logo on the Bingo! Mad Angles packs (around 3 crore packs) that were retailed across Punjab for the campaign duration. The Bingo! songs were aired on 9X Tashan and also promoted on digital platforms which received an overwhelming response from the people of Punjab.

Askme presents AskTrack on 9XM: A hour-and-a-half breakless music show from Monday to Friday  on 9XM, where viewers have to ask for their track and the channel would play it. It lets viewers control the playlist: Request your song using hashtag and song code and watch it play with your message! The playlist would dynamically play the most voted song ‘live’. All song codes are available on a special microsite www.9xm.in/asktrack and on-air during the show.

HMSI Campaign with Betel Nuts: Honda CB trigger wanted to position that it’s the best companion on a road trip and can cruise on all kinds of surfaces. The campaign revolved around Betel Nuts going on a road trip using their Honda CB Trigger. Five episodes were created showing Betel Nuts exploring different locations on their Honda CB trigger. Travelling on rough terrains to hilly roads and on a sandy beach, the brand was promoted in every episode focussing on its looks, USP and sturdiness.

Feedback: simran.sabherwal@exchange4media.com

Tags : Impact Feature