Monday, August 13, 2012

A B&E EXCLUSIVE INSIDER

As subhash chandra plans a gradual exit, B&E catches up with him and his two sons to discover more of what’s going on at work

If you thought that that sounded much like the veteran Chandra, you would be right, as even Punit says, “We both focus on profits!” But that’s where the similarities (on the business front) between father and son end. Vanita Kohli Khandekar, an independent media consultant and writer, tells B&E, “Chandra is a visionary and no one can match him at that. But a big problem at Zee was execution. Chandra is very good at spotting business opportunities, while Punit is more of a hands-on operational guy. He gets involved with the nitty gritties and that is what the channel needs today.” Amit Goenka gives a similar feedback between his father and elder brother as he says, “My father is a great visionary, while Punit is a perfectionist.” After fixing up the group’s GEC, Punit is now focusing on expanding the regional and sports channel portfolio. The company has acquired the remaining 45% stake in Taj TV and as few know, its management is in the process of restructuring the entire sports business under the Ten brand. The sports bouquet of Zee will be made a separate entity and will function as a subsidiary. Also, Zee Sports will be renamed Ten Action (the proposed name) and a new golf channel (Ten Golf) will be added to the sports bouquet. So what’s the rationale behind this restructuring? Punit says, “We believe that Ten Sports is a formidable brand within the sports genre in the country, and garners the highest viewerships in the genre on any non-cricket day. And since Ten Sports and Zee Sports functioned as separate entities, we could not club the two channels and offer it to advertisers. Therefore, Zee Sports was not able to piggyback on the popularity of Ten Sports, either on the distribution or the ad-sales front.”

Apart from that, niche content is on Punit’s priority list. Zee is exploring the opportunity to launch niche channels in genres like action, sports (pool & golf), home shopping and the likes. The company is also going to launch two high definition channels soon. Industry experts say that the Indian market is not ready for niche channels as of now. But Punit counters, “If you wait for it to become viable, you will never be in the game. We have always been ahead, because we see an opportunity before anyone else can.” The niche channel business will bloom once the number of digital TV homes grow. Punit projects that there will be around 45-50 million digital homes in the country over the next five years. Thus, they plan to invest in the niche category over the next few years.

But the wine has not been sweet forever. Chandra’s elder son has had his fair share of disagreements with his father, and he candidly admits that and offers, “I am a firm believer of the saying that by the time you realise that your father was right… you have a son who thinks his father is wrong!” He cites one example: During his early days, unlike Chandra, Punit strongly believed that it was important to rope-in celebrities and go for high buzz programming to remain competitive. However, time and again, he felt that his belief was being proven wrong and that his father was right after all. [That explains why Zee TV has mostly stayed away from roping-in celebs and high buzz programming, even if such a strategy had worked well for other channels.] But that had also created a disconnection between the channel and the young audience, whose importance had been gradually but steadily increasing in the TV space. Till date, Zee doesn’t believe in high buzz programming. But Punit is not the one to give up, as he says, “One phenomenon cannot determine that it will work well in general, forever... After all there has never been a second KBC.” Surely, when Punit takes ‘total’ control of Zee, you will witness one big change. Take a guess.

Till date, Punit has managed to pump life into Zee, while his younger sibling Amit, has built a Rs.24 billion business in the gaming space, almost out of nothing. However, their lottery business has had to face a lot of regulatory issues and Amit feels that is the biggest challenge for Playwin in the years to come. Like his father and elder brother, Amit too never loses his focus on the bottomline; as he shares his continuing worry about slowing growth and falling margins in the gaming business. He says, “Playwin is profitable but not as profitable as other businesses of the Zee group. Margins are low, and not more than 2.0-2.5%. In terms of revenues, we expect a slow growth of 7-8% over the coming year.” Amit is also keen on other businesses. He shares, “Currently, there are few areas in the media vertical, where we are either not strong or absent as a group. One of them is the interactive space, and I am interested in getting personally involved with this space soon. Over the next six to nine months, many new events will unfold...”


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