Monday, September 03, 2012

UTV’s Global Broadcasting

UTV’s Global Broadcasting division posted a remarkable turnaround in the last year. CEO M. K. Anand speaks to B&E on the favouring factors and future expansion

B&E: UTV Entertainment Ltd. (a part of UTV Global Broadcasting) posted a profit of approx `355 million as opposed to last year’s loss of `820 million. How did you manage the turnaround?
MK: There has been a big write down that has happened on the inventory side, there has been some consolidation and all movies in the movie library have been taken in and written off. Right now we are sitting on a library which has zero cost on our profit and loss account. So our programming cost has significantly reduced because of that. In general, there has been an operational efficiency improvement between Q3 last year and Q1 this year by absolutely 100%. We were operating at `110 crore; this year our target was `220 crore. In order to achieve those numbers we needed to get `55 crore of revenue. In the year which ended at `110 crore, you would expect that the quarter would have made 27 crore, so the one ending at `220 crore should make somewhere about `35 crore in Q1 but we actually did around `50 crore. So we have already set the run rate for Q4 in Q1 and that’s how we move forward. The GRP increase happened in Q3 last year after a lag of 3 months. We were anyway planning to monetize. In Q4 we did significant marketing; we became sponsors of Goafest, which is the biggest ad event for the advertising fraternity and our ad rates have substantially increased over the last year after that. Also, all the channels were operating at 50% inventory utilization and right now we are operating at 100%.

B&E: UTV has been toying with various genres with Bindass, 3 movie channels and a news channel. What further expansions are expected now?
MK: A movie business is required as a portfolio player. It is better to have flanking businesses, like a movie business, which are bulk driven in nature so that it becomes easier for you to negotiate business with distributors and advertisers, as long as they are profitable, obviously. But our network will concentrate on the 15-24 target group and we will not push ourselves into the GEC (General Entertainment Channels) business. We are at a life-cycle where the GEC business will go lower. It’s like the mainframe business of the 1990s. If you already had it, it was good; but if you didn’t, it was better to have a desktop business rather then a mainframe one.


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