Press Releases2012

Apr 05, 2012
Chairman features in World Screen's, TV Asia Pacific publication

Looking at India's crowded and chaotic television landscape today, it's easy to forget that just two decades ago the country's airwaves were ruled by one dominant state broadcaster. In 1992, Subhash Chandra took on the incumbent Doordarshan with India's first Hindi-language satellite channel, Zee TV. Twenty years later the Zee portfolio includes a host of thematic and regional channels many of which are also beamed to South Asian audiences across Europe, North America, Asia, the Middle East and Africa. The Zee channel business is just one part of Chandra's Essel Group conglomerate, which also owns the Indian DTH platform Dish TV and the North American health and lifestyle channel Veria Living. Chandra recently met with TV Asia Pacific to talk about the way forward for India's booming media sector and his aspirations for turning Veria Living into his newest worldwide brand.

TV ASIA PACIFIC: What challenges do you see for the future growth of the Indian media business?

CHANDRA: There are challenges in the market, for example digitization. The government has set a deadline of 2014 [for all cable operators to upgrade their systems to digital]. My guess is it will [be partly completed by that deadline]. I think that it will take a few more years, maybe to 2017-2018, even 2020, for the cable industry to become more consolidated, from 100,000 mom-and-pop cable operators to one or two dozen corporations who can control a large [market share] and provide good quality [broadcasts] and technology, and service the customers in a better way. The ARPUs [average revenue per sub- scriber], which are just about $4 per home for a bundle of 400 channels, would [have to] increase to a viable level. Currently it's not at a viable level for any consolidation to take place. The regulator will have to open up the market-leave it to the market economy to see what [prices] people can bear.

Today, there is no pay market in India. Everyone says there is a $7-billion pay market in India. I don't believe that. It is just giving a bundled service to the household; people don't pay separately for HBO, they don't pay for Zee Cinema, they don't pay for premium content separately. Slowly that will start happening. For example, we have started an à la carte service, a 24-hour network [Zee Khana Khazana] that is all about food and cooking. People have started paying separately for it. We are soon launching a golf channel, which will be a premium high-quality pay channel. Pay services will have to develop and evolve over the next five to seven years.

Similarly, in DTH, [there are] far too many operators - six or seven of them. They will have to consolidate. Again, their ARPUs will have to increase to a profitable level. Today it'snot at a profitable level. That money will then have to flow into programming.

The production industry also needs to be well organized. Today it is fragmented, it is again mom-and-pop shops. The pricing of the programming is very high [in relation to the] quality. Then, the advertiser and the programmer have to be on the same page. We are delivering almost 90 million homes but we are only being paid for 40 million homes, because the rating system covers only 40 million homes.

Many anomalies have to [be eliminated], and my belief is they will be and the market, from the current $17 billion to $18 billion [in revenues], will become $60 billion to$70 billion in five to seven years' time. There is a huge growth opportunity.

TV ASIA PACIFIC: The channel's landscape is so fragmented. How do you maintain, and increase, your share of advertising dollars?

CHANDRA: We are a network of channels. We are serving [audiences in] seven languages [with] 30 networks and we have almost 17 percent of the TV eyeballs. Against the 17-percent viewership we control, we are able to extract almost 25 percent of the advertising pie. Not many people are able to do that. So many channels are [launching in India]. But today, if you ask me, at least 100 chan- nels are available for sale, and there are no buyers. The market will get consolidated. The fringe players will van- ish or get bought out. Distribution is a big challenge.

There is no [carriage] space in cable. Even on satellite there is hardly any space.

TV ASIA PACIFIC:

What are your plans for ZEE's business in the United States?

CHANDRA: In the U.S., having served the South Asiandiaspora pretty well, we are now servicing mainstream American audiences with health and wellness programming through Veria Living, which is in 10 million homes. We relaunched it in January with a renewed programming thrust. We will expand the distribution and a lot more American people will benefit from Veria to live healthy. We have already invested in excess of $100 million in Veria's programming. We plan to invest $250 million more in the programming on this network. All the programming is being done in very high quality, high definition; a lot of celebrities are getting involved with it. There isn't anything like Veria in the market at the moment.

TV ASIA PACIFIC:
What are the expansion opportunities for Veria in the nonlinear space?

CHANDRA: First and fore-most, there is a complementary website, so if you want to find recipes or know more about the programming or about some particular ailment, you can go onto Veria.com and then get your information. We are talking to various distribution networks, those who will distribute the programming on a VOD basis, on an over-the-top basis, and other ways. I'm sure we'll make some of our videos available on different net- works, including Facebook, and also make them available through libraries.

TV ASIA PACIFIC: What are the priorities for your overall international business in the next 12 to 18 months?

CHANDRA: Veria at the moment is only in America. We are syndicating the programming to different countries, but we would like to take the network [to the worldwide market]. In five to eight years, we'd like to make it a global brand. In countries like France or Germany we'll probably dub the programming, in some places we'll subtitle. Even within the U.S. there is a possibility that we could create a parallel network in Spanish.

For the Indian programming [on Zee TV], we are already dubbing into local languages. In Indonesia our programming is available in Bahasa. It's very well received. In Saudi Arabia
we have a channel that is subtitled in Arabic. It's the number three channel there. In Russia we are also doing programming dubbed. Things are happening every day.

TV ASIA PACIFIC:
You were recently honored with the International Emmy Directorate Award. What does this recognition mean to you?

CHANDRA:  Our programming, the South Asian programming, is very well recognized and appreciated by almost 600 million viewers across the globe. We are in 167 countries. What the International Emmy means to me is that it's recognition that India is not only a tech-savvy computer-software country, but it has also arrived in terms of media and programming.

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