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The Rediff Business Interview/Rathikant Basu

'Television has come full circle, from local to national to local content. The real challenge now is to create a new paradigm'

He has seen it all. From a top ranking government officer to Doordarshan chief to secretary, the Department of Electronics, to chairman of Murdoch's India empire. Now Rathikant Basu is all set to carve out his own entrepreneurial niche with a little bit of help from Murdoch himself. His target: regional language viewers of North India. Pritish Nandy interviewed him recently.

What is this new venture you are planning with Murdoch? How is it different from eVentures, his venture with the Mittals?

eVentures is essentially a funding organisation. It will fund Internet ventures and e-commerce applications. It will also function as an incubator. I do not think it will enter the content business though it may be involved in funding it. What I propose to do is create an extension for Star. Star already has a bouquet of channels and some joint ventures like Channel [V] and Star Sports with ESPN. But it has not yet gone into regional channels.

You intend to fill that gap?

Yes. For Star.

I thought you were entering the Internet content business.

That too. But what I want to start with is a foray into regional language television which operates on a different scale from Star. Star operates on a pan-Asian level in one sense and on a national level on the other. These channels will focus, instead, on individual states. Like Bengal, Punjab, Gujarat, Maharashtra. But together they will form a good bouquet. An attractive option for advertisers.

From there we can move on to content for the Internet.

In other words, you will create content?

Right. We start with satellite television but will quickly move on to Webcasting and TV on the Web. When you are looking at that you are actually looking at a huge audience of very affluent Indians around the world.

You will do both TV and Internet content out of the same company?

Yes. We are calling it Broadcast Worldwide.

What will be Murdoch's stake? Will he market your content through, say, Star?

No. Since 80 per cent of my money will come from Indian investors, I will have to create an independent broadcasting and marketing platform that will make their investments viable. Of course, I can bank on Star to help me out, at least initially, with sales and distribution which is very important because I am going digital from the start. I am also getting technical help. Murdoch has also taken a five per cent stake in the venture.

What is the size of the regional TV market?

It's pretty large if you take the whole north.

Why are you sidestepping the South?

It is rather well covered by Sun, Eenadu and Asianet. Getting in there will be a long haul. It will also cost a lot of money.

In other words, you are back confronting your old friend Zee, which has launched Alpha channels in Bengali, Punjabi, Gujarati, Marathi?

Their focus has been Hindi and I do not think the regional channels are their main thrust area. They are carrying dubbed programming in a large way. My strategy will be entirely different. I think that despite Zee and maybe versions of Sun and Eenadu which may come out shortly, there is still a lot of space for quality regional language channels.

Can these channels afford viewership fragmentation and still remain viable?

I think so. One of the reasons why I have confidence in the venture is because advertising rates are still very low in this country. This means there is a great scope for increasing the total advertising buy.

You mean the ad rates are low for TV in India compared to other media? Or do you mean our ad rates are low compared to international ad rates?

Compared to both international rates as well as rates in this region. Singapore, Malaysia, Indonesia, Thailand. The advertising spends there are much higher than here. So I see a substantial growth in spend in the Indian market and as viewership fragments, advertisers will have to spend more to cover the same numbers.

What do you reckon is the adspend on Indian TV today?

Around Rs 30 billion.

As against how much in print?

Say Rs 50 billion. The adspend on TV is about 35 per cent of the total.

Where do you see this going in the next five years?

To above 40 per cent. But volumes will grow much faster because of the general buoyancy in the economy and the sharp increase in the number of brands coming in.

But since print is unlikely to be able to push up its rates very much more, won't this give TV a larger percentage of the adspend quicker than you think?

The niche segments in the newspaper world will be able to increase their rates. Not the mainstream newspapers perhaps.

Apart from the Hindi and English channels, which have national reach, how much business do you think the regional language channels can actually garner?

I would say around 50:50 in some time. Today, the revenues are very much skewed in favour of the national channels but that will change in the next five years. It is already changing in the south where four years ago most of the TV spend was on national channels. Today the bulk of advertising there goes to regional channels.

Which satellite do you intend to broadcast from?

We have not yet firmed that up but it is likely to be Insat 2E. We also have an offer on Asiasat 3 but there is a lot of difference in the price.

The quality of broadcasting will obviously differ?

Yes. Broadcasting quality is a function of several factors. Source material; the transmission chain; the power of the satellite. Insat 2E has less power than Asiasat 3 but it can compensate for that with good source material and a well-run transmission chain. Since we are going digital, quality is much easier to control and ensure.

Don't you anticipate competition from cable TV? For language broadcasting would obviously be a simpler and more cost-efficient route because viewership is region-specific.

In certain markets cable might have an edge over satellite. But the cable market is terribly fragmented at the moment and I see that as an opportunity. It will take a long time and very expensive technology for the cable market to consolidate.

The real challenge is going to be, as I see it, Pritish, to create a new paradigm in television. It is going the full circle now. It started off as being very local with a few terrestrial stations. Then came satellite television.

Which changed the nature of the content entirely?

That's right. From local content it became more national. You gave common content to a larger mass of people. But, now, viewers are going back to local content. Sun TV today has 45 per cent share of the audience in Tamil Nadu. What is even more interesting, over 85 to 90 per cent of audiences in Tamil Nadu are today watching only Tamil programming. In the north, the figure is much less because they don't get enough of quality regional programming.

What does it mean to you personally, this shift to entrepreneurship?

It was inevitable. As you grow in government, you become less and less independent in your ability to take real decisions. That is why, I moved out. I saw an entrepreneurial challenge in Star TV. Now I believe I can do it for myself.

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