Innovating the media landscape

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Govind Shahi tells Media Impact about how he promoted the free-to-air model, and calls for Asian TV channels to produce better quality content. Waqas Qureshi reports.

Up until a few years ago, traditional Asian TV broadcasters in the UK had clung on to the subscription-based business model – some would say protected it with their lives. More recently many channels have opted for a free-to-air service, realising the benefits that increased viewership brings to advertising.

Some personalities in the UK market have broken the subscription-mould, Govind Shahi being one of them. Formerly the business manager for ZEE’s Europe operations, Shahi now heads IndiaCast operations in the UK, and is Senior Vice President for IndiaCast Americas (including Caribbean and Canada) operations. As well as heading operations of Colors, Rishtey and News18 India in the UK/Europe regions, Shahi controls the overhead IndiaCast channels in Americas.

During his tenure at IndiaCast UK/Europe, Shahi took the business decision to turn premium pay channel Colors into a free-to-air service – risking all revenues the company was making from its subscription model. Shahi was also behind the launch of Rishtey on DTT (Freeview HD) – the first Asian channel to do so.

Zee was the market leader in revenue terms when he decided to move on, while IndiaCast channels currently rule the freeto- air (FTA) space (viewership) in terms of a network. IndiaCast has seen good growth in the last five years in terms of revenues, channel offering as well as viewership. And to add to that, several milestones were achieved along
the way including growing with an evolving market landscape, launching a channel with content from the original channel/syndicated from other networks, entry into the news arena, 24-hour Bollywood channel – freeview etc. All of these were new challenges not just for Shahi but for the media market as a whole.

“I have learnt a lot and it makes me happy that the journey has been meaningful,” he told
Media Impact. “I continue to believe there is additional share of revenues that can be garnered from this market which is potentially untapped currently. Needless to say, at IndiaCast we have big plans in the new fiscal year and we will work to improve the viewing
experience for all our audiences.” Shahi took the business decision to turn premium pay
channel Colors into a free-to-air service – risking all revenues the company was making from its subscription model. How risky does he believe that strategic move was? “The subscription model was showing a constant decline. All paid channels were losing subscribers on a daily basis and something new/different had to be tried.”

He said that the general market word was that the future looks bleak for the subscription model and it is only a matter of time before that becomes a reality.

“That is when we decided to risk a model that had never been tried before. Yes, we were
risking a huge amount of revenue.However, the gains could also be substantial. We already had a very successful business model in Rishtey and with Colors having our flagship programming, we decided to give it a go. It was an instant success with revenues sky rocketing along with popularity. You will recall we were the last entrants in the market amongst the top networks. Therefore we were not getting a fair share of revenues till that
point. Today, I can say we have a healthy market share which was primarily driven by the new business model.”

IndiaCast UK has grown from strength to strength. From a single channel it now has four channels along with a HD variant, and Shahi revealed there are discussions around another launchthis year. All corporates have a stretch target in the new fiscal year. In this industry typically the key KPIs remain revenues, viewership and reach.

“While the content may be the same, both the UK and USA markets are hugely different in terms of revenue drivers. And, there is no OFCOM in the US!”

The launch of Rishtey on DTT (Freeview HD) saw Shahi’s team try innovative strategies like FTA. “We decided to get the first mover advantage of being on a platform that caters to nearly half the UK homes.” The challenge was that Asians in the UK are used to watching
Asian channels on either Sky or Virgin so freeview is not their destination of choice, therefore there is lesser uptake of Freeview.Shahi has also recently launched Rishtey Cineplex and to compliment this Colors HD is also available, giving viewers on freeview a variety of entertainment.

USA market

The comparison between Asian TV in the UK and the USA is like ‘chalk and cheese’, according to Shahi. The US has a controlled pay market and all channels are bundled together, whereas the UK has evolved into a FTA market which relies mainly on advertising revenues. Shahi also points out that in the UK, a larger share is derived from mainstream advertisers while ethnic takes a larger share of the pie in US. “So while the content may be the same both the markets are hugely different in terms of revenue drivers for the business. And, there is no OFCOM in the US!”

Marketing on ethnic channel

Shahi believes that ethnic marketing on ethnic channels has seen a significant evolution over the last few years, with much better quality of adverts. Gone are the days when traders came to media offices and requested adverts to be made from visiting cards. Increasingly, the trend is moving towards ethnic advertisers having a budget, storyline and focussing on creating a high-end advert. Mainstream brands on ethnic channels has changed the way the market works and has added significant increase to the airtime revenues of ethnic channels.

“Most BARB rated channels are selling up to 75% inventory
to mainstream advertisers today which speaks about the importance
of the ethnic eyeballs”

“Most BARB rated channels are selling up to 75% inventory to mainstream advertisers today which speaks about the importance of the ethnic eyeballs.” But are Asian channels doing enough to get the message out to main stream brands to advertise on desi channels?
“Unfortunately no,” says Shahi. “As most of the mainstream adverts are being sold by sales houses and we depend on them to promote our channels. I think we have been lacking on this front and this needs to be improved to ensure there is the USP of the niche audience and the value of their disposable income or the ‘brown pound’.”

He also does not believe ethnic channels are producing enough quality content to boost viewership. “But I think that will be the next big wave. We have seen one major change with channels going BARB for mainstream revenue, the next one is happening with channel launches every other day. In my opinion the next wave will be of rationalisation where smaller networks will either leave or, simply align with the bigger networks who in turn will focus on producing local content. Local content will become the differentiator and will create the association of the audience here with the channels.”

Shahi says for the moment the BARB ratings are the only measurement system available,
even if figures and ratings don’t always necessarily truly reflect south Asian UK TV viewing. “No doubt that the number of people meters should be more as ratings fluctuate. I had done some overlaying with the Sky data and noted most of the ratings seem to match, so whether it is good, bad or ugly that is what we have to work with. And it is the currency for all advertising in UK. “However, it is time that all Asian broadcasters make a
representation to BARB and talk about increasing the number of people meters to reduce these daily fluctuations with an aim to make it more reflective of reality.”

Sky Asia Pack

The removal of the declining Sky Asia pack had a number of consequences, says Shahi.The direct consequence of subscription channels coming out of the pack is lesser revenue
for them on one hand and on the other hand they get increased reach from an airtime
sales point of view. “I think we are heading towards a glut in the market. With an equal distribution and increased availability of airtime coupled with the pressure of loss of revenues in subscription I think it is going to get tough for everyone. Even an advertiser will need to spend more and spread thinly to try and reach the entire audience base.” And what are the long term goals for IndiaCast?“ To be the number one network in terms of to p choice of viewers as well as profitability,” said Shahi.

But what would he like changed about the UK’s south Asian TV channel industry? “That’s one long list! I think to start with we need to work cohesively – almost a community feeling to some extent on wider issues while still maintaining a healthy competitive spirit,”he said.

“I think we are heading towards a glut in the market. With an equal distribution and increased availability of airtime coupled with the pressure of loss of revenues in subscription I think it is going to get tough for everyone”

“Don’t get me wrong, the situation today is miles ahead of what it used to be a while back. This is however a small industry and there is a need for people to stop investing time in pulling each other down and instead think progressively and work for the overall benefits
that could be derived. I still think there is a huge untapped potential in terms of the
fair share of revenues that Asian channels should get of the larger pie and we are nowhere close to attaining that. If we were to work towards achieving that, it will be happy days for all of us.”

Certainly, it appears happy days for IndiaCast, who have the experience and skills from Shahi to drive their business forward.

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