Recently, Siddharth Zarabi, Executive Editor of BTVi, interviewed Dr Subhash Chandra, the chairman of the Essel Group, on the 1100 Days of Modi government. During the freewheeling interaction Dr Chandra offered a glimpse of his take on the media sector, which he rarely does. Brief excerpts of the interview:
Question: You said you are not in business, but I still have to ask you, being a media Baron, for your assessment of the media sector. I remember the days when the Zee script raided at Rs 10,000, I was a reporter covering the beat those days, since then there has been a downturn for the media sector which has started around 2008. Dr Chandra, where does the Indian media sector space stands today? A lot of investors have lost faith, valuations are at an all time low. Is the skepticism justified, sir?
Dr Chandra: In a way, it is justified. I would say so because if you look at the overall media industry in our country, if you take print media separate and take only electronic media, the sum total of the industry is a net loss. Zee is in profit, maybe SunTv is in profit so here and there few people are in profit, rest most of the people are losing money. As a result, the investors have to invest very carefully and a lot of investors have burnt big money. Take 9x for example, they have put thousands of crores, before that also there have been failures, after that also there have been failures. So, that's the reason. Since 2008, our script was about Rs 150 which is now about Rs 525 as per the last numbers...we have given results, we have given returns to our investors.
Question: On the overall, the GDP related contribution of the media in terms of advertising is 0.5 per cent in India and it remained so for many years while the global average is 0.8 per cent of GDP. A lot of people feel that it will be very difficult for the Indian media companies to achieve that kind of advertising linked growth. Is there a change of model necessary Dr. Chandra? Or do you think with the overall revival of the economy, we could move towards that average?
Dr Chandra: No, the model has to change. The model has to change in the sense, that there is so much inventory that is available. Today the number of news channels that we have in India, probably equals the number of channels of the whole world…the largest market is North America and their total number of news and business channels are eight. Now you imagine how many are here! It the general news category itself, there are 150 channels, then there are regional channels. Andhra and Telangana each have got some 50-60 channels, so this is too much. And people are coming in for different reasons. Not running as serious media companies. Even, some of them are there to keep the police away from themselves!
Question: Right, right! So, how does this change sir? There are no entry restrictions.
Dr Chandra: The government will have to consider this seriously. They should not issue licenses just like the way they have been issuing. It is very serious!
Question: A linked couple of questions before I end this. I want to ask for your assessment of digital Dr Chandra. So, if there was a print wave and I must point this out to our viewers that you yourself are in the English news print business that’s doing pretty well. The third wave is digital, yet a lot of investors say that a formula of profitability is still illusive in India and I would say, also in North America, not everyone is profitable. What is your assessment about digital? Especially, because a lot of young people are attracted to this sector.
Dr Chandra: Yes, now content creation, delivery, consumption all these areas are going to be digital. There is no denial about that. Again, in digital there is no entry barrier. But at the same time those who think that they can make a business out of it would find it difficult because, eventually you have to monetise the content. Whether, it is news, whether it is non-news, entertainment, documentary anything. So the right kind of content will sell, people will consume and the freebies slowly will disappear.
Question: This question is about a personal passion that you had spoken about some time back and this was to take the India's voice globally. To that end, the group has also launched an English language television channel. In fact, one of the last launches in the most recent recent times. Where do you stand on that? How easy or difficult it is to take India's voice global?
Dr Chandra: It is difficult because it is not going to attract advertisers easily. It will not have the rating that is required for example in India. Internationally also it will require a lot of effort and expenses. So, we are doing it for the sake of our country. We are expecting that there will be a lot of public and private companies those will come forward and sponsor this as our founding partners. We already have some. For us it is not a matter of making a profit.
Question: Because you touched upon the issue of ratings broadly. Again in your capacity of being a media baron our rating system has attempted a change yet a lot of people say that there are weaknesses, there are reports of channels doing double LCN launches and that sort of gives the sector a bad name how do you look at it?
Dr Chandra: It hurts me badly because if a watchdog, just like a police official, indulges in corruption it hurts the most. If a normal person does corruption, we still say...okay...accepted. On one side as a media outlet, we are commenting on others and on the other we do the same thing ourselves... it's not done. The rating system still has some flaws. I hope they fix them quickly and easily. I will advocate that nobody should ask for two LCN numbers. The distribution people also, in the greed of money, should not give in.