Exclusive | Gaurav Gandhi on IndiaCast, international opportunities and more

Gone are the days when your brother back in the US watched a show on Zee TV and felt ‘home’. With broadcasters and producers keen to tap into a growing Indian-origin audience base of 3 crore across geographies, viewers can now watch a Serbian version on Indian hit Balika Vadhu!

Thus, citing opportunities in international markets in addition to their strong business in India, IndiaCast, the distribution company (a joint venture between TV18 and Viacom18), has been distributing its flagship channel Colors and its content in the international markets since early 2010. Over the last couple of years, other channels from the network have also been widely distributed in international territories.    

Adgully caught up with Gaurav Gandhi, Group COO, IndiaCast to get the right business sense, understand the opportunities the business holds in international markets, how they take MSO and network wars and more. Edited excerpts below:

Adgully (AG): We begin with something that is keeping the distribution sector of the broadcast industry in the news, public spats between broadcasters and platforms. What is your take on the latest one involving one of your competition networks and a distribution platform?

AG: Given the complexity of the structure and its functioning, isn’t it important for people like you from the industry to get together and educate the consumers / viewers / audience as there is still some of uncertainty with regards to the working of distribution networks?

GG: As a broadcast network, our role is to create quality content and make it available to the audiences. So we are agnostic to which platform a consumer may chose – be it any DTH or any cable company. I think what we need to make consumers aware is that India is probably the only market where pay television services are so cheap and have not increased in pricing (in real terms) in the last 15 years!! While viewers pay about Rs. 200 – 300 for about 200+ channels, they are willing to pay Rs 300-500 per ticket in multiplex for a single film!  We need to educate that at two levels – one to move towards digital platforms (from analog) and two - that quality content will come at a price. Only when the ARPU goes up in the digitalised era can all stake holders make money.

AG: Give us a sense of the businesses at IndiaCast.

GG: So, we have three verticals- Domestic distribution, International Business and digital distribution (new media). Our domestic businesses has grown dramatically over the last two years and as you are aware besides Network 18 (TV18, Viacom 18, ETV & A&E 18), we also distribute Disney UTV channels. So our portfolio of 40+ services is extremely strong. Our international business too is now of fairly significant scale. We distribute more than 10 channels (including our flagship service COLORS) from our network in close to 90 countries and our content distribution deals cover 125 countries. We have created specific services for overseas markets – like Rishtey (which has a different avatar in each market it launches) and News 18 India. In revenue terms too, in a short span of time we have caught up with some of our peers / competitors, who have been in this business for over 15 years. Our third vertical is digital – were we distribute our content on all mobile and internet platforms in India and around the world. We do deals with the likes of I-tunes, YouTube, Netflix as well as a whole bunch of telcos and other OTT operators. Our revenues come from subscription (e.g Netflix, yupp tv), advertising (e.g YouTube) and direct to consumer sale (e.g I-tunes)

AG: Can you share with us some of the challenges that you face both, in the domestic and international businesses.

GG: India is a low ARPU market, where 200 + channels are available for Rs 200-300… Each stake holder is fighting for his share. Further, the digitalization process has not gone very smoothly as real addressability is yet to kick in; billing (by the MSO) to the consumer has not yet started – and this is in the top 40 cities. The next phase of digitalization will involve 8000 towns where the issue of implementation will be even bigger. The other big challenge will be the funding the MSOs will need for phase 3. All of these are challenges for the entire industry. The international market is extremely lucrative – both in ARPU terms as well as in share size. The challenges here are of the nature of Piracy, cost of reaching some of the smaller markets and capacity constraints of platforms to carry more of the Indian services.

AG: With such huge investments going in the international markets, what degree of importance do these markets get for IndiaCast?

GG: These are huge markets not only for us but as an industry as well. There are about 3 crore (30 mn) Indian-origin people outside the country knowing Indian languages. The International opportunity can be defined by 3 Es- ENORMITY of audiences (30 mn Indians), ECONOMIC BENEFIT (it’s a high ARPU market, which results in high per subscriber fee for our channels) and the third is the EMOTIONAL CONNECT – the consumers have an emotional bond with Indian TV channels – it’s their connect to back home. Our channels have footprints in 90 markets and syndication footprint is in 125 countries. The international distribution and sales business is a high margin business. Revenues come from subscription, ad-sales and syndication. In the last few years both, ad-sales and syndication have grown significantly for us and the industry per se. As more markets have ratings systems that cover the diaspora audiences, and viewership data of Indian channels becomes available, advertising revenues get a significant boost (for e.g in the U.K and the Middle east). On Syndication, the big jump has come from targeting ‘non desis’ or the mainstream audiences. We realized that there is huge opportunity in focusing on the non-Indian base in markets like East Europe, Africa, Central Asia and going forward Latin America. Bollywood had shown that Indian content can travel to different countries but TV has really done it in terms of volumes and revenues.

AG: What has been the focus in terms of channel launches in overseas markets for IndiaCast?

GG: Besides COLORS, our big focus currently is on expanding the footprint of our other brands – Rishtey, News 18, MTV and ETV. Our News play is differentiated from others as we have created a dedicated brand for overseas markets – which is not just a current affairs service, but also covers business and financial markets. News 18 has already launched in UK, Singapore, ANZ, Middle East and will soon launch in US and Canada. Rishtey, the sister brand of COLORS, is something that takes a different shape and form in every market it launches. We tailor make the service and either make it Pay or FTA depending on market to market. The next market for launch is U.S and Canada where the channel will be a pay service. MTV is the leading youth brand around the world and is a big hit amongst diaspora audiences as well. MTV India is available in close to 40 countries. We are also distributing the multiple ETV branded services (across languages) in U.S, Canada, Middle East, Singapore among other markets.

AG: What are the targets you have set for the year 2014?

GG: The target for our domestic business would be to continue the momentum that we have had over the last 24 months. We represent 40 strong Pay TV services and have leader brands across genre. It’s a 4-way race on the domestic distribution front and we are confident that we are set to get our fair share of revenues in the next 12-24 months. On the international business front, we have started this business four years ago and have already caught up with some of our competitors who have been in this space for 15+ years. The idea now is to ensure all 10-11 brands from our portfolio get global footprint (just like COLORS has got). We will launch more products, open new sales offices and get into newer markets in the next 12 months.

AG: Lastly, if you have to specify what makes IndiaCast standout in the market, what would that be?

GG: The essence of formation of IndiaCast was to create one entity which manages monetization of intellectual property (linear or non linear), across geographies and across platforms. That itself is something unique and differentiated about us – and gives us a serious advantage over others by making us ‘future ready’.