COMMENTARY
SPECIALS
CHAT
ARCHIVES

The Rediff Business Interview/ Kiran Karnik

'We are extremely successful despite the market's weakness for song and dance and bubblegum programming'

For one who says things like ''we are not unduly perturbed'', even when new competitors surface in a market that is becoming increasingly depressed, Kiran Karnik, 52, Discovery channel's India head, appears anything but flamboyant. ''National Geographic channel is just another competitor, like 30 or 40 others,'' he told Rediff On The Net, during his recent visit to Bombay to announce Discovery's forthcoming special programmes like the two-hour August 17 live telecast of the Titanic examination by forensic experts.

Suave, small-built, frail but natty in suit and sporting a salt-and-pepper beard, Karnik looks remarkably composed even as he concedes that the economic gloom is wreaking havoc on the media industry, including Discovery. ''We can't compete with news and sports channels, that's for sure. When there's a cricket match on, even I tune in.'' Hear Karnik on Discovery's efforts at avoiding being just another bubble in the surf whipped up by remote-happy cable and satellite television viewers.

Excerpts from an exclusive interview with Y Siva Sankar:

You have completed three years in the Indian C&S television market. Any interesting discovery?

Yes. The market is slowing down rapidly, which is unexpected. The ad spends are plummeting; they are much lower than the 1995-96 levels. 1997-98 witnessed a distinct slowdown. Revenues are down, even 40 per cent growth rates look unimpressive. The economic recession, the political uncertainty, the general, all-pervading gloomy psychology of it all, have had a tremendous impact on the media industry. And to think that just four years back, there was a mad rush to launch television channels!

But then, the rush has not become a trickle, so to say. Many more new channels seem to be bullish about India. National Geographic, for one. Does its advent mean anything to Discovery?

Well, they are all big players, owned by corporations, things like that. We're not even among the top 10. We're recognised as an independent, closely-held channel.

Will you review your India plans, given the industry's dismal show in the recent past?

One thing's for sure. We'll stay on. We've made up our mind on that. Our investments won't stop. We're looking at the Indian market, the subcontinent itself, in a long-term perspective. We're convinced the Indian market is big enough for us to be optimistic. We've realised that the Indian viewer entertains the all-inclusive concept: he is comfortable watching the entire spectrum, from Zee to BBC to Discovery.

Going back to National Geographic. What does its entry mean to the Indian C&S market?

We welcome their Indian foray. If you are wondering whether we're concerned, my answer is no. It's just one more 'competitor', like the 30 or 40 other channels in India. In one sense, it's good for the market. For it's not the brands but the category that gets established. This will help the market to grow.

We look at it this way. If Doordarshan's programming scores high television rating points, it may not mean much percentage-wise. But if Discovery's TRP increases from one to three, it means we've made a 200 per cent progress in a nascent market. This way, more and more people gradually notice and patronise our kind of channels.

There is another interesting thing happening. Channels are not making profits, except two or three. The peak is getting depressed. And the spread wider. It's a healthy sign, but the rate at which it is happening is slower than expected.

What are your impressions of National Geographic?

Good programming. Their documentaries are very good. But they are very good.

Sounds interesting.

I mean, they are so good, so expert-like, the ordinary viewer may find it difficult to relate. It gives the impression of an expert talking down to a lowly, ignorant viewer. National Geographic has a textbook style. Discovery is different. It's like a friend talking to another friend. With its lively mix of nature, wildlife, science, travel, space, life and what have you, Discovery is a hang-out place for curious minds.

You seem to imply that Discovery is a rage in India.

It is. Our penetration in the C&S market is 10 million households. We've a presence in 678 towns. We should know because Discovery is an encrypted channel, and we know at how many places our decoders have been installed. We've been extremely successful in a market known for its weakness for song and dance and bubblegum programming.

Do you think this piece of information has significance for the market?

Oh yes. It means the television viewer in India has become discerning, discriminating. It's a good sign. It is pointer to the fact that there is an unsatiated hunger for quality programming.

Do you think niche channels, some of which are either encrypted or pay, can secure a footing in India?

Here were are talking of C&S market, which encompasses the idea that the viewer is a subscriber. He would subscribe to a cable only when he wants something more than the ordinary. So there is nothing like a niche channel in the marketing sense. It's all in the mind. But yes, there are categories, as I said earlier. News, sports, business.

You mean, the market will survive if every C&S channel decides to go pay?

See, there's place for only two or three very best channels in each category. Sooner or later, there is bound to be a shake-out. Our feedback is that, yes, the Indian viewer is willing to pay for top-class programming. Eventually, it has to be that way. This free-to-air thing can't go on forever. This is the reality. Discovery will become a pay-channel in 1999.

It's the cable operator who is wary of pay-channels for fear of losing customers. There is a feeling that if the subscription rates go up, people might stop buying C&S services. But we are educating the operators. The Indian viewer has to reconcile to the fact that he has to pay more to get more. It may sound cliched, but let me say it again: this is how it is all over the world.

Does it necessarily mean that it will work that way in India too?

I feel so. Television is addictive. Research bears that out. Our market feedback is that there might be no more than a 10 per cent drop in the number of subscribers if channels go pay. The trend has to be towards encryption anyway. That's the only way small, top-class channels can grow. Encryption is also necessary in the context of copyrights. A channel with separate beams for different regions will be better off if it is encrypted.

Discovery has been duplicating its broadcasts in Hindi. Any plans of launching Discovery in other regional languages?

Well, we've plans, but there's no time-frame. Dubbing as we do it is an expensive proposition. We don't compromise on quality. Because we believe audio plays a critical part in a channel's success. For people who don't understand English, Discovery could mean a whole load of pretty pictures. We want to be a story-telling lot, we want to complement the visuals with meaningful, comprehensible audio. Our feedback is that viewers in states like Tamil Nadu, Andha Pradesh, West Bengal do not prefer Discovery in Hindi which is very popular in regions where the lingua franca has a semblance to Hindi.

Channels like MTV and Channel [V] have gone in for what is known as Indianisation which seems to be a successful move. Will Discovery follow suit?

No. We'll remain a channel with a global outlook. We don't want to get into the mould of a mass channel, so to say. Anything in India that can make world-class Discovery programme material will be harnessed. In that sense, India-specific programming will increase on Discovery. But it does not necessarily mean that it will be made by producers in India, though the best among them will get an opportunity.

Last week, Cartoon Network released findings of a survey that Indian kids like Indian brands more, Bata over Reebok, Ruf N Tuf over Levi's. Do you think there's something here for Discovery to understand?

Yeah, I've read about it. The findings have been bothering us. But then, it's interesting to note that in India, MNCs like Bata, Hindustan Lever acquire an aura that is very Indian. I mean they are actually perceived as Indian companies. My gut feeling is Discovery will also be seen as an Indian channel.

Talking of kids, they seem to have a say in many Indian homes as to which channel will play. More often than not, it's the Cartoon Network. And the concept of going in for a second television has not taken root. How will Discovery square up against the new kids on the sofa?

We don't have to, I guess. People tell me that it's only on Discovery that there is some agreement among family members. It is like a common denominator. One friend told me that Discovery, unlike other channels, promotes harmony in his home. Some young parents told me that with Discovery around, they don't need baby-sitters anymore. I hope this will continue to spread. Truth to tell, we learn that Discovery is more popular than cartoons among the 6-14 age-group on Sunday mornings.

Having said that, let me admit that we don't believe we can compete with regular channels. No way. News and sports, nobody can beat them.

Mention Discovery and it conjures images of nature and wildlife. But you say it's much more than that. Are you happy with your brand's image?

I agree, Discovery India has to rework its brand positioning. We've to reorient our image. Science and history programmes will be publicised more. Plans are afoot. An ad campaign is on the anvil. More will follow.

I believe Discover never discloses financials. Maybe you could tell me what it would take for anyone who wants to launch a channel like Discovery in India?

Rs 500 million a year. In the first four years, let me assure you, profits will be unlikely. If anybody with less than Rs 2 billion in his kitty wants to get into the business, I feel he would do well to perish the thought. Let me add: we don't expect to make profits even next year, but we're prepared to continue.

You seem to draw encouragement from a certain fact.

Yes. Our ad revenues have been rising. I won't be able to state the figures. All I can say is that the 1997 revenues were 250 per cent higher than 1996, and 1998 revenues will be 200-250 per cent higher again. They could have been much higher, but for the gloomy scenario all around. Anyway, we hope to sustain and improve upon that rate for the next few years.

But then, the next few years could also see the Broadcast Bill becoming law. What will Discovery do in case the cap of 49 per cent on foreign equity is retained? Have you identified any Indian partner?

About the foreign equity thing, we're very concerned. But no, our thoughts are not in the direction of a tie-up. We don't think we would like to be in a situation where the majority stake-holder could run Discovery purely for commercial reasons. In case it (the Broadcast Bill) becomes law, we may have to review our plans.

But I've a feeling Discovery will be spared. It's an education channel, in one sense. We've a presence in 149 countries. Nowhere have we been asked to shut shop for reasons of equity composition. I'm optimistic India will be no different. How can it be?

Interviews