Wednesday, September 20, 2017

Justice delayed, but not denied

The Supreme Court upheld a Delhi High Court verdict barring Doordarshan from sharing with cable operators the live feed of cricket matches for which private broadcasters have acquired exclusive rights. Putting the judgement in context...

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It was over ten years in the making.

In October 2005 the Union Cabinet made it mandatory for broadcasting rights holders of major sporting events to share the signal with Doordarshan, the (so-called) public broadcaster.

For the uninitiated, here is how the system works.

An international sporting event – from a cricket series to the Olympics – is telecast in several countries, over a number of different TV channels. It is a large and complex operation. Shooting and producing the telecast of a T20 match, for instance, takes about 30 cameras and a staff of 80. It is obviously neither affordable nor feasible for each of those TV channels to station their cameras and crew in the stadium or, in the case of the Olympics, in several stadiums. That job is contracted to a single production company which, in turn, contracts with interested broadcasters, typically one in a country. The ‘host broadcaster’ adds commentary, graphics, and other elements, to deliver what you see on your television.

In a market like India multiple broadcasters vie for major events, especially of cricket, so broadcasting rights are awarded as a result of competitive bidding, with each multi-year contract running into anything from hundreds of million to over a billion dollars. What the broadcaster buys for that kind of money is only the right to telecast the footage live and to use it for a limited period. Neither the production company nor the host broadcaster has the IPR for the actual footage: that vests with the event organiser, for instance BCCI or the IOC. Broadcasters obviously expect to earn back that cost and more from advertising and from subscription revenue from cable operators.

The argument for feed sharing was that a large number of people did not have, and could not afford, access to cable and satellite television, so could not watch cricket matches. The whole thing hinged on the idea that these were “events of national importance”, and so it was the duty of the government and the public broadcaster to make it possible for the largest number of people to see them. To that end sports broadcasters were directed to share the signal with Doordarshan, who would reach those audiences.

Interestingly, in that very year, 2005, Doordarshan did on its own have the rights to a cricket series – probably the last time it did – and one day, without any prior intimation, sent bills to news channels for use of match footage in their news bulletins. The broadcasters collectively responded with a simple case. They said that if indeed these matches were events  of national importance it was the public duty of the press to report on them. In the case of broadcasting that necessitated the use of footage, and the only source of footage was the host broadcaster. If, on the other hand, the matches were not events of national importance, it should not be required for the rights holders to share the signal with Doordarshan.

With that they sat down with a quiet smile and waited to be told which of the two it was. And, oh, while you’re thinking about that, here is something else. The use of footage for reporting is in any case within the definition of ‘fair dealing’ under Section 39 of the Copyright Act, so is perfectly legitimate.  Playing off the backfoot now, Doordarshan and the I&B Ministry prevailed upon the news broadcasters to accept some usage guidelines.

In 2007 Nimbus (owner of Neo Sports) paid $600 million for five-year broadcasting rights for BCCI events in India, and did not see why they should share the feed with Doordarshan. When they went to court the government immediately promulgated an ordinance and then, with remarkable speed, enacted a law. 

The signal-sharing law (the Sports Broadcasting Signals Act ,2007) required that the rights holder (‘host broadcaster’) not merely permit Doordarshan to retransmit the signal but actually provide it with a ‘clean’ feed – i.e., untreated, without logos, breaks, commentary, etc. Doordarshan could then, without acknowledging the host, make the broadcast look like its own: not only put in its own logo but take its own commercial breaks, and sell advertising. In exchange – seemingly fair, in theory – it would pass on to the host broadcaster 75% of revenue earned, keeping 25% for itself.

Part of Nimbus’ case was that Doordarshan did not know how to sell; that if they were to sold advertising time on Doordarshan too, even their 75% share would be a great deal more, so it was an opportunity loss for them.

Nothing changed. It was only six years later, in 2013, that Star and ESPN impleaded themselves in the case.

Meanwhile Doordarshan freely misused its privilege. Given the feed to carry on its free terrestrial and DTH networks, it aired the matches on its cable and satellite channels, too. Why was that a problem? Because it is mandatory for all cable operators and satellite TV platforms like TataSky, et al to carry two Doordarshan channels, free of cost to Doordarshan as well as to subscribers. This has meant that cable and satellite operators have had access to broadcast of matches through two avenues: one through the host broadcaster, at a cost; and the other through Doordarshan, free. As Uday Shankar, CEO of Star TV, put it, “…the rights holder lost money, DD did not benefit, and consumers were shafted because they were paying for content which was actually free.”

It was against this background that the sports broadcasters made their case. They were arguing not against sharing the signal but against Doordarshan’s rampant malpractice. In 2015 the Delhi High Court ruled in their favour, and the government predictably went to the Supreme Court, which has upheld the High Court ruling. Interestingly, to rule in their favour the court relied not on complex or arcane legal niceties but on what it called “the plain language” of Section 3 of the original law, the Sports Broadcasting Act of 2007, “which makes it clear that the obligation to share [the signal]…is to enable Prasar Bharati to transmit the same on its terrestrial and DTH networks.”

So ends another long, tortuous battle. Or does it?

Welcome to Season 2
 The day before the Supreme Court delivered its verdict in this matter Dish TV wrote to the Competition Commission (CCI). Ahead of the 28th August close of bidding for media rights for the IPL for 2018-22, they asked the CCI to prevent Star from acquiring those rights.  

Dish TV pointed out that of 270 cricket matches played and to be played in India from 2012 to 2019 Star has broadcast rights for 191, and that is without the telecast rights for the IPL (which have thus far, from the start, been with Sony). “Once Star acquires the telecast rights for IPL as well, not only will the market share in terms of viewership of Star skyrocket but distribution platforms such as DTH and multi-system operators will have no choice but to subscribe to the Star Sports channel for cricket content,” their letter reportedly said.

The Star TV network is, no doubt, the big boy of the five sports broadcasters in India, and Sony its only real competition. Star’s long-time bitter rival Zee struggled with sports broadcasting for many years and finally pulled out of the genre when they sold Ten Sports to Sony. While Zee is not in it, sports broadcasting is a big money maker for Star and it is in Zee’s strategic interest to choke that line of business. And Dish TV belongs to Zee.

The monopoly power Dish TV is apprehensive about is the result of open, competitive bidding. Star TV evidently had the resources and the appetite to put big money on the table, take the risk and build a business. Is that not what entrepreneurship is about?

But Dish TV, or Zee, is not alone or unique. Reactions to the Supreme Court ruling have been interesting. Mint cites an unnamed top sports broadcasting executive as saying that the verdict, while fair, “perhaps strengthens the hands of sports channels too much.” Let me guess: he’s not from Star TV. And about Dish TV’s letter, “It is fair to ask regulators to intervene.”

It is the way of Indian business that we like free markets and don't want Government to interfere with business -- except to restrict and restrain our competition.

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First published in The Hoot (www.thehoot.org) on 28th Aug 2017




Marketing forgot him – and that shows

Jack Trout passed away on 5th June 2017. In remembrance, The Smart Manager invited tributes to the man who coined the concept of Positioning. Here's mine.

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Whether the concept of Positioning is thriving or has gone the way of the USP and the dodo may be arguable, but Jack Trout’s most important work was perhaps his 2006 book In Search of the Obvious, aptly subtitled ‘The Antidote to Today’s Marketing Mess’.

“While CMOs are being fired and US brands are descending into chaos, confusion and commoditisation,” Trout writes, “US consultants are producing book after book about what should be done about the mess.”

That is exactly what he’s done too, you may say. The difference, though, is that Trout argues against the arcane concepts, catchphrases and esoteric jargon that have become the stuff of marketing. “You can easily sum it all up by observing that marketing is increasingly becoming a complex science of data mining, number slicing, niche segmenting, and so on and on. As I said, marketing is a mess.”

Taking inspiration from Robert Updegraff’s Obvious Adams, Trout makes the case for common sense, which was really the unifying theme in everything he wrote and said. The trouble, as Updegraff wrote, is that the obvious seems simple and commonplace, but we like clever ideas and ingenious plans.  And those who tell us to get our heads out of our computers, to think simply, and to speak and write simple English, make us uncomfortable and insecure.

Current marketing literature and the discussions on marketing forums show a profession in search of a role and meaning.  The biggest concerns of CMOs seem to be digital and social media, and managing and making sense of data. But the internet, and all that it spawns, “is not the ultimate solution,” as Trout says. It is “only a new way to reach people with your obvious idea.” And if that is what keeps CMOs up at night, rather than the pressures of driving top line growth by consistently delivering a competitive value proposition, it is small wonder that, as they lament, not more of them become CEOs.

Thankfully there are the few beacons, the iconic practitioners of the Obvious Adams philosophy. And there is no better exponent of it than Google. It’s not just technology that keeps the brand where it is, it’s what they do with it and – most important – why.

Google’s stated mission is “to organize the world’ s information and make it universally accessible and useful”, and everything they do is to serve that single purpose. Google neither was the first search engine nor is it the only one, yet it has a global market share of 78% in desktop access and 95% in mobile and tablet access. Ten years ago Yahoo’s mission was to be no. 1 in mobile search. Now its market share is 1.7% and the company is in the ICU.

It is not a coincidence that Google is one of the two most valuable brands in the world (alongside Apple) on all the major brand valuation reports: those of Interbrand, Millward Brown (Brand Z) and Forbes.

With technology brands one may wonder how much proprietary technology contributes to their success, so consider a consumer brand: Gillette, which has dominated the market for men’s shaving blades for over 100 years, and even today has over 70% of the global market.  

Gillette is driven by its unofficial motto, “There is a better way to shave, and we will find it.” It has repeatedly introduced better products to already-satisfied consumers, who faithfully drop what they are using and adopt the new, more expensive one. It has built an unassailable position by focusing on one thing and, by excelling at it, continuously raised the barrier to entry.

Result: In Interbrand’s listing of the world’s most valuable brands Gillette at no. 16 is the no. 1 Personal Care brand, and has been from the beginning.

Closer home and down the technology scale is Amul, aptly described in Melt as “the number one nobody talks about’. With a turnover of Rs 38,000 crore* the Amul brand is bigger than the total turnover of Hindustan Unilever (Rs 34,000 crore).  

What keeps Amul there? In a word, trust. At a time when, as the Edelman Trust Barometer reports, consumers’ trust in brands is declining as marketers cut corners and even blatantly deceive consumers, here is a brand built on trust – and uncomplicated thinking. And, in a low-technology business, they have kept the barrier to entry very high, delivering uncompromising quality at prices that are unviable for competition, by maximising marketing efficiencies.

The search for the obvious begins and ends, says Trout, with the Chief Executive Officer.  With the pressures of the stock markets and of PE investors and the resulting focus on short term results, CEOs need to show they are doing something. But the tougher, the more complex the environment, the more important it is to know what not to do, which road not to take. The trick is to know where you are going. If you don’t know where you are going, any road will get you there.
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* Cited by R S Sodhi, Managing Director, GCMMF, in Melt, June 2017

First published in The Smart Manager, Jul-Aug 2017

Wednesday, June 7, 2017

NBA vs Republic TV — the pot calling the kettle…?

It was inevitable. It was only a question of who would be first to pull the trigger, and when.
Two years ago, almost to the day, I raised the red flag – even before BARC started publishing data. Asked in a Q&A with The Hoot about the watermarking technology to be deployed by BARC, I had said (in part) the problem with it is that the broadcaster controls the switch. If you’re disgruntled and don’t want your channel to be measured you can simply stop watermarking, and the system will not be able to read your channel. That will distort the picture, and a major network doing that could hold the whole system to ransom.
Last week it happened. All English news channels turned off watermarking, and with that BARC’s ability to measure and report their viewership. All except Republic, that is, which was the cause of the action. The other English news broadcasters want BARC, or someone, to take action against Republic for multiple placements of the channel on distribution networks – having multiple LCNs, as it is termed.[i] 
Let’s rewind a bit.
“He that is without sin among you…”
As Republic was gearing up for launch the word went round in the business that it had acquired multiple LCNs on several distribution networks. Perturbed, the News Broadcasters Association (NBA), of which Republic is not a member, wrote to BARC not to report its data. NBA also complained to TRAI.
Republic went on air on Saturday, 6th May. (Saturday is a good day to launch because BARC’s reporting week is Saturday-Friday and you get a full week of data from your very first week. Data for the week are published on the following Thursday.) Accordingly, data for Week 19 (6th to 12th May) were published on 18th May – and all hell broke loose.
Republic was reported to have had, in its very first week, a 51% share of viewership of English news channels. Unthinkable, and unacceptable.
Times Now, long the undisputed leader in English news, had been widely expected to crash when Arnab Goswami quit. Everyone watched keenly but week after week it remained no. 1, to the utter surprise and frustration of its competition. Then Goswami came back on the air, now as the face of Republic, and – lo! – promptly that channel appeared on top while Times Now slid to second place. Worse, the viewership of Republic was 80% higher than that of Times Now, and twice that of the next three combined. No ifs and buts: Republic was it.
Meanwhile India Today TV also complained, to both BARC and TRAI, about Times Now too engaging in the same practice, of multiple LCNs. Yes, the same India Today which had done the same thing two years ago, when Headlines Today was rebranded and relaunched as India Today. According to a Chrome Data Analytics report at the time, India Today TV was on dual frequencies on each of 70 cable networks, giving it an additional 22% reach. At a cost, of course: by some estimates, 50% over its normal carriage fee.
Nor were they shy about what they had done. Ashish Bagga, CEO of India Today Group, was quoted commenting on it, and expressing his delight with the outcome in viewership and market share. Alas, the glory was short-lived: the channel was no. 1 for one week, before dropping back to its usual place in the pecking order. An expensive, if happy, week.
Times Now did not deny India Today’s charge, only justified it as a “defensive manoeuvre”.
BARC chose to do nothing about either complaint – NBA’s against Republic or India Today’s against Times Now – and for very good reason. They said they were aware of broadcasters engaging in this practice in the past too, and took the position that they “… measure viewership of channels basis their unique Watermark ID, irrespective of the platform the channel is available on or the number of instances within the platform.” And, quite rightly, that “BARC India is not the regulatory body for resolving issues concerning the multiplicity of LCNs for a channel.” Unexceptionable, on both counts.
In fact, BARC’s policy already states that “Regulatory issues pertaining to this, if any, would lie within the domain of the Ministry of Information & Broadcasting (MIB) and/or Telecom Regulatory Authority of India (TRAI).”
Reacting to what they saw as BARC’s inaction against Republic, all other English news channels stopped watermarking, thus effectively pulling out of the BARC system and rendering it unable to measure and report English news viewership at all.
Now it is reported that TRAI will conduct an enquiry. Into what and to what end remains to be seen.
Heads, they win; tails, we lose
Matters are now rather interestingly poised. For all the sound and fury the anchors display on their nightly shows, English news is a very tiny genre in the overall context of Indian TV: less than 0.1% of total TV viewership. Even within the news category itself all of English news is only about 8% of the leading Hindi news channel, Aaj Tak – which itself is only about 9% of the leading Hindi GEC, Star Plus.
So what does that imply for the current impasse?
The most important reason for audience measurement is for advertisers to know where to put their money. If the channel or the genre is important enough they manage without data because they cannot afford to miss the audience it delivers. That is what they did during the painful period of transition from TAM to BARC: they bought on the basis of old data.
In this case, though, it’s not just the absence of current data: the whole category has been disrupted. Data up to Week 18 does not feature Republic, while data with Republic is available only for Week 19 and cannot be compared with earlier weeks. So there is, in effect, no data at all.
Nor is English news is central to any advertiser’s plans: it is just too tiny. There is probably not a single media plan in the country which would be disrupted in its absence. That is not to say that advertising on English news is useless: just that it’s not essential. And what it adds to a media plan – frequency, impact and delivering a focused audience – it does at a relatively high cost, getting as it does 22-25% of what advertisers spend on news channels for delivering a tiny fraction of the news audience.
The affected broadcasters are caught in a cleft stick. Unless a knight in shining armour – the government, TRAI or the courts – charges in to their rescue, they have two choices: make some face-saving gesture, get back in, and risk having the Week 19 kind of data again; or stay out and risk advertisers pulling out in the absence of data. While they have acted as a subset of the NBA all of them are also members of the IBF, the biggest shareholder in BARC, and a couple of them are on its board. What they do have going for them is, of course, the clout of the news media, which can often induce matters to take an unpredictable turn.
BARC, on the other hand, is not immediately affected. The largest part of its revenue comes from broadcasters, and of about 900 TV channels in India only 6 are in English news. Their broadcasters cannot afford to pull out of BARC fully because all of them have other channels, for which they need the data.
BARC’s other source of revenue is media agencies, on behalf of advertisers, who can afford not to buy English news. This means the absence of data on English news will not materially affect the value and usefulness of BARC data to its subscribers, and therefore will not affect BARC.
If TRAI does uphold the complaint against Republic and orders it to operate on a single LCN, it is highly unlikely that the broadcaster will snap to attention and comply: they are bound to fight any adverse ruling through all the appellate processes available to them. In other words, whatever Republic is doing or has done is not going to change in a hurry.
For the present, then, BARC is safe, advertisers are unaffected, and it is the English news channels which have something to think about: they got themselves into this situation and they have to dig themselves out of it.
But that is only for the present
What this standoff has done is to expose the weaknesses of the system, the better to be exploited by those better placed to do so.
First, that BARC can be held to ransom. This time it has been challenged by a small genre that does not materially affect it or its other stakeholders, but what’s been done once can be done again: next time by a single broadcaster or a group of them whose absence is keenly felt and forces BARC to the negotiating table.
Second, the practice of multiple LCNs is out in the open. It’s not financially viable on an ongoing basis but is a useful way to get a temporary blip in ratings for the launch of a new show, for example. It distorts the data but BARC will – even if rightly – do nothing about it. So, unless there a law or a court ruling to prevent it, it’s here to stay.
The advantage of a system run by a vendor – like TAM – is that the vendor has no role in the business except to provide data. They are answerable to the industry and the survival of the system depends on their being able to keep the stakeholders satisfied.
On the other hand, the problem with an industry-owned and –driven system like BARC is that the players have interdependent relationships outside of the measurement system and have conflicting stakes in the business. Worse, in the case of BARC the ones being measured not only control the system, but also individually have the power to opt out of it at will. That cannot be a sustainable situation.
BARC as an entity is not responsible for the shenanigans of broadcasters, but those very broadcasters own (60 percent of it) and drive it. They are the plaintiff, judge and jury. Unless it finds a solution outside the judicial system in which affected parties – which would most often be the constituents of its own shareholders – can approach an objective, independent body of third-party experts, the audience measurement ecosystem can look forward to the proverbial interesting times.

First published in The Hoot (www.thehoot.org), 22nd May 2017

[i] A channel is meant to appear in the programme guide on your TV only once, in the genre to which it belongs, i.e., among like channels. A channel that appears more than once, in different genres, increases its chances of being viewed, because when people surf they come across it more than once, and so could increase its ratings without actually being seen more. This is a questionable practice, but not illegal.

Thursday, October 27, 2016

The Yogi and the Commissar

It’s the season for media biographies, as NDTV and TV18 publish their life stories. If NDTV comes across as self-righteous TV18 is open about its sins of commission.
Book review
More News Is Good News: 25 Years of NDTV, Edited by Ayesha Kagal, HarperCollins Publishers India, 2016, 392 pages, Rs 799.
Network 18: The Audacious Story of a Start-up That Became a Media Empire, by Indira Kannan, Penguin Random House, 2016, Rs 699.
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NDTV celebrates its 25th anniversary with More News is Good News: Untold Stories from 25 Years of Television News; and Network 18 marks the transition in its ownership with the unimaginatively (if correctly) titled Network 18: The Audacious Story of a Start-up That Became a Media Empire. To be accurate, though, it is not Network 18 but its previous owners who are marking the transition.
It is interesting how true to type the two books are: the one, self-absorbed and self-satisfied; the other, racy and somewhat breathless.

The man doth protest too much
The NDTV book is high-school-year-book-meets-corporate-brochure. A collection of pieces by employees and associates recalling the wonderful times they have had, proud of and grateful for the privilege of belonging, and with an underlying note of the superiority of NDTV. High professional standards, ethical, principled. It never did anything wrong, and rarely made a mistake.
Prannoy Roy sets the tone in his opening piece. He presents NDTV as the brave victim of a corrupt environment, standing proud, bloody but unbowed, and makes a virtue of the company’s poor performance in both ratings and profits.
Each of the company’s three news channels – NDTV 24X7, NDTV India and NDTV Profit – was once the leader in its genre but has not been for years.  Roy’s contention is that this is so for two reasons. One, because NDTV has refused to prostitute itself for ratings. Two, because the ratings system is not only inadequate but manipulated by unscrupulous broadcasters. To anyone who has known the news broadcasting business in India that is a familiar refrain.
It is not as if there has been just one ratings system in the country. During NDTV’s life as a broadcaster there have been three. First there was TAM. When NDTV began to slide down in TAM ratings along came aMap, which showed it in a much stronger position. So while TAM was the industry standard they switched to citing aMap, slicing and dicing the data to claim leadership.
When, in time, their channels slid down in aMap too they ran a campaign citing three unnamed “major surveys across India" to claim 60% viewership among an undefined audience. Contrary to standard professional practice the ads did not detail where, when, and by whom these “major surveys” were done, or the defining parameters. Coming from a company that has its origins in psephology and counts among its brains trust Dorab Sopariwalla, the senior-most market research professional in India, it seems unlikely that this was out of ignorance or an innocent oversight.
In 2012 NDTV sued TAM’s parents Nielsen and Kantar for $1.3 bn in a New York court on charges of deliberately publishing corrupt and tainted data and favouring rival channels in return for bribes. The claim included compensation for loss of revenue over a period of eight years, the amount on that account reported variously in a range from $680 mn to $810 mn. Calculating even at an average of Rs 50 to $1 for an amount of $700 mn, that is Rs 3,500 crore or an average of over Rs 400 crore per annum in loss of revenue
To place that claim in perspective, consolidated revenue reported in six years to March 2012 (available data), the year in which NDTV sued Nielsen et al, was a total of Rs 2,635 crore, or an average of Rs 439 crore a year, which is about the same as the claimed loss of revenue. In other words, NDTV claimed they lost half their potential revenue because of TAM's shenanigans. How likely is that?
In the event, the New York court dismissed the case and nothing has come of it thus far.
Now TAM and aMap (which had closed earlier) have been replaced by BARC, a ratings provider set up jointly by the industry bodies of broadcasters, advertisers and advertising agencies. BARC data for Week 40 of 2016 (1st to 7thOct) show NDTV 24X7 with a share of 12% is fourth of five English news channels; NDTV Profit with a share of 13% is fourth of five in English business news; and NDTV India is not in the top five in Hindi news. So it would seem all ratings systems are either inadequate or manipulated.
No, wait. There’s hope yet. “Another benchmark is the BARB in the UK, which just came out with their ratings that NDTV 24x7 is India’s Number 1 news channel ahead of Aaj Tak and ABP,” said Vikram Chandra, CEO, in an interview to Impactonnet. Doesn’t BARB measure viewership in the UK, though, not in India? Ah, I get it. NDTV 24X7 is the most viewed Indian news channel in the UK – not quite India’s Number 1 news channel, as Chandra would have us think.
The issue is not low ratings; it is that NDTV can neither improve the ratings nor live with the fact. It does not become a self-appointed moral standard bearer to constantly moan about how unfair the world is.

The Sermon on the Mount
Roy informs us that NDTV operates by what they call (“rather pompously”, he admits) the “Heisenberg principle of journalism”. Paraphrased, it means that for a news organisation profits and integrity are in conflict. “Almost by definition, the path to making profits for a news organization is littered with compromises that change the nature of journalism, often so that it can no longer be recognized as a news channel,” he says, and goes on to describe three: going tabloid; fiddling the ratings; and blackmail and extortion.
NDTV, of course, does none of these reprehensible things, which is why it is not profitable.
Dismissing all Hindi news channels (except NDTV India) as tabloid, Roy contends that advertisers, advertising agencies, CEOs and marketing heads watch only English channels, “so all decisions on advertising rates and expenditure are based solely on the number of eyeballs, not on the quality of the channel, because nobody has watched any Hindi channel.” Unlike the UK, he says, where a quality media vehicle gets “a much higher advertising rate per eyeball than a tabloid”, in India it does not.
Again Roy conveniently, and disappointingly, ignores the facts.
BARC reports that in Week 40 of 2016 Aaj Tak generated 164.58 million impressions; Times Now, 1.34 million; and NDTV 24X7, 331,000. If advertisers were to pay all of them the same rate per 1000 impressions – as they logically should – NDTV 24X7 should earn a price per 10 seconds that is 25% of what Times Now does; and 0.2% of what Aaj Tak does. Roy knows far better than I do what kind of rates each of them gets today, but I have no doubt NDTV 24X7 gets far more than the number of impressions would warrant.
NDTV’s lasting contribution to Indian broadcasting – not just news but all broadcasting – does not find a mention in the book: the infamous placement fee which financially crippled Indian broadcasters, including NDTV, and continues to.
For the uninitiated, in the old days TV distribution used analogue technology, which offered limited bandwidth. (Remember when you had no set top box and the channels showed up on your TV in a seemingly random order?) Those with top-end TV sets could receive 106 channels in theory, but fewer than 60 with reasonable (for then) clarity; and at the other end, the rank-and-file could see 11 clearly, and a total of 36 at all. Hundreds of channels competed to buy those positions simply so they could be seen and, obviously, the ones with the deepest pockets got them.
Over time the practice grew to such proportions that for many broadcasters – and certainly for news broadcasters – the placement fee became the single largest line item in their P&L. Distribution became the first priority for the allocation of funds, ahead of content and salaries. While the biggest networks – Star, Zee, Sun, Network 18, Sony – got into the distribution business themselves, cutting their own costs and making money to boot, all but the big five have been bleeding for years.
Digital technology will put an end to this extortionate practice, which is why the cable trade has resisted the efforts of successive governments and continues to stall digitisation in large parts of the country. That is the reason for those syrupy ads on TV sweet-talking viewers into getting a set-top box. No government can afford to arm-twist cable operators, who are politically important at the local level, so they keep pushing the digitisation deadline (now it’s 31st December 2016) and cajoling viewers.
It is widely believed in the TV business that the initiator of this practice was NDTV, and there is enough anecdotal evidence to support the belief. One view is that they did it to prepare for and support the 2005 launch of NDTV Profit, going up as they were against the entrenched CNBC-TV18. But a key NDTV player of the time, who was in the thick of it then, told me years afterwards that it was earlier, to ensure the visibility of their channels prior to their IPO in April 2004.
For all his protestations, Roy goes on to accept that “on balance our news media and its ‘soft power’, both television and print, have been working for democracy.”  But, he cautions, we are hurtling towards a regulatory cliff, and that is when governments try to take control. “…the time has come once again to fight any encroachment by the government and to act before it is too late,” and, later, “…any changes in the media environment must be initiated and guided by journalists, in dialogue with the judiciary, not with or by the government.”
Instead of these and other similar broad statements about the way things should be, it would have been good to know what Roy and his colleagues have done about these issues. Leadership means walking the talk, not just sermonising.

Missed opportunity
The rest of the book is detail. Vishnu Som’s piece Reporting Under Fire, reminiscent of the writing of John Simpson, stands out for actually sharing the experience: the trials and tribulations, the frustrations, the limitations, and the triumphs. That is the kind of first-person inside story you want to hear.
Barkha Dutt, who must have much to share, has only her script for a show she did to mark the tenth anniversary of her Amanpour moment, her coverage of the Kargil war. Amusingly, the script is reproduced in its entirety, complete with marginal notes and directions like these:
-          “Start with an abstract close-up – a flower, a bit of a stream, and not a mountain long shot”
-          Bite – Vishal, brother of Vikram, doesn’t speak very clearly – so have to see if this works”
-          “Slow-mo shots of us looking at mountains together”

You’re left wondering whether this is due to vanity or simply poor copy checking.
The book is a missed opportunity – for the reader, if not for NDTV. This is not just any 25-year old company. It is a company that was in the forefront of one of the biggest, most fundamental changes this country has seen, without which democracy was a joke.  A couple of pieces recalling the clunky, makeshift operations of the old days are interesting and amusing, but there is regrettably little by way of insights, or of sharing of what must have been the excitement – sometimes heady, sometimes tense – of pioneering private news television in the country in the teeth of paranoid regulation.

Network 18’s mea culpa
If the NDTV book is about what’s wrong with the rest of the world, the Network 18 book is a confessional: “a story of brilliant ideas, severe setbacks, naked aggression, spectacular victories and fatal flaws”, as a cover blurb describes it.  Written – very competently – by Indira Kannan, a former Network 18 journalist, it obviously has the full approval of Raghav Bahl, who also holds the copyright to it. 
The rise and fall of his empire was fraught with questionable practice, but with Network 18 now behind him Bahl has nothing to lose on that front and tells it – or lets it be told – like it is. Detractors and those in the know will inevitably have different versions of incidents, but to the outsider this is a dramatic story candidly told.
Bahl in his foreword writes with angst about losing control of Network 18. “With such enviable achievements, why do I still ask, ‘Did I succeed?’ Because I eventually lost control… A far more important question than, ‘Did I succeed?’ for any first-generation entrepreneur is, ‘Why did I fail?’ I can answer that for myself with hindsight candour. It was a lethal mix of hubris, unrealistic ambition fuelled by reckless debt, and the misplaced belief that I could tame any crisis.”
It is creditable that up front he takes full responsibility for the denouement. There will no doubt be those who question the detail, but it is unlikely anyone would argue with Bahl’s ownership of the outcome.

Adventure and misadventure
The tie-up with CNN was quite a whodunit in itself, starting with pulling it out from under NDTV’s nose. Full credit is given to Haresh Chawla for the whole gutsy, brazen process from the idea to the closure, and to the surprising, little-known role of Subhash Chandra in facilitating it.
The launch and success of Colors – now the no. 3 channel in India, after Sun and Star Plus – is a story of guts and glory. NDTV Imagine, Real and 9X had been dismal failures. Why would there be room for yet another Hindi GEC? Colors set out to be big and pulled out the stops in content, distribution and promotion. It started with big shows, upped the ante on distribution – the broadcasting industry was agog with whispers about how much they spent – and invested heavily in advertising and promotion.
But, as I wrote elsewhere at that time, it is not enough to have the resources. It needs the risk appetite to put money, careers and reputations on the line, and then the energy to fight every single day to keep your place at the top of the league table. Chatting to Haresh Chawla when the launch of Colors was imminent, I remarked about the huge amount of money they were known to be spending. “Paise to phir kamaalenge,” he said. “Izzat ka kya hoga?” (“We’ll earn the money again, but what about the loss of face if we fail?”)
For all its successes Network18 lurched from crisis to crisis, most often of its own making. Having never been known to take time off, “In 2007, finally, [Bahl] would take leave – unfortunately, however, it was of his senses…” Global Broadcast News had had a madly successful IPO, but ambition, impatience and liquidity make a deadly cocktail. Even while deep in debt, between 2009 and 2011 TV18 managed to raise Rs 1,000 crore in equity. “Stuck in a deep hole,” Kannan writes,“[they] had managed to get their hands on a 1000-crore-rupee ladder…. Instead of stepping on the ladder, Raghav and his managers decided to widen the pit.” And so instead of paying off their debt they blew up the money on Homeshop18, Firstpost, and a new Hindi movie channel.
That, says Bahl, was when they lost Network18. What happened later (borrowing from Reliance and their conversion of the debt into equity) was, he says, only the singing of the dirge. In his narration of the process of losing control there is no rancour, only regret. He takes full responsibility for what happened, and says Reliance did nothing more than they were entitled to within the framework of his agreement with them.
In the course of its growth from a production house to a media empire, Network18 developed a highly questionable ownership structure. Each time they launched a new channel – CNBC Awaz, CNN-IBN – they set up another company and stock analysts complained that Bahl was syphoning off value from TV18. Bahl blames “outrageous” rules regarding foreign equity, because of which the only way to get each licence was to launch another private company, off TV18’s balance sheet, but equity analysts don’t buy that argument.

Nikhil Vohra, CEO of a venture capital fund and one of the first analysts to follow TV18 and Indian media stocks, says the complexity and opacity of the group’s structure were unwarranted. “It is completely untenable to suggest that it’s the government which forced them to do what they’d done,” he is quoted as saying, and that investors “just lost complete faith in what Raghav was doing”, diminishing the company’s ability to raise equity and forcing Bahl to support the business with debt.
Asked earlier by Shuchi Bansal of Mint (in an interview published as an appendix in the book) what his compulsions were to sign the Reliance deal, Bahl says, “We were in a classical debt trap. Our market cap had come down to Rs 400 crore; our debt was Rs 2,000 crore plus. So a debt to market cap ratio of 5. We would not have survived.” But the debt trap was not something that happened to them: it was of their making.
Bahl does say that in terms of delivering value to shareholders the company was an ‘absolute and abysmal failure’, and that, “None of these analyst things would have happened if we had actually put the shareholder first.” Too little, too late.
Ironically, a company built on a foundation of reporting and analysing business and the stock markets was sinking because of some of the worst practices of listed companies: opaque structures, syphoning shareholder value, and a cavalier attitude to public money. It was this attitude that led to many infractions such as buying Infomedia without due diligence, or going into huge contract negotiations without legal advice.
All credit to Bahl for letting it all hang out, for taking the responsibility, and for letting his views on many issues be presented as just that: as only his views, along with others which don’t necessarily agree with his, including, on the Indian Film Company fiasco, his sister’s. While that has its place, though, it doesn’t detract from the rights and wrongs of what he did, by commission or by omission.
What Kannan has written, and Bahl has authorised, is much more than the biography of an entrepreneur or of a broadcasting network. It is instructive reading for any entrepreneur,  and indeed for any CEO, whether owner or professional. There are of course lessons in what Bahl did – the boldness, the risk taking – but the more valuable lessons, perhaps, are in what he did not or did wrong, not just when a rookie entrepreneur but even at the height of his high-profile success. The latter is scary, and a warning to every CEO.

Different strokes…
The timing of the two books is fortuitous, enabling as it does an illuminating comparison of two leaders, of two organisations, following a path much the same in many ways and at about the same time but in two very different ways and with very different outcomes.
Interestingly, these books come hard on the heels of the publication earlier this year of the autobiography of Subhash Chandra, perhaps the original television trailblazer, from yet another background and with yet another personality and style.
For those interested in television, especially for those who have been associated with the business and have known the players, this has been a year of rich reading. But, among all of them, the Network 18 story stands out for the important messages it holds for anyone who runs a business.
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Note: Title from Arthur Koestler, The Yogi and the Commissar (1945). The Commissar, at the materialist end of the spectrum, uses any means necessary, while the Yogi's emphasis is on ethical purity, not on results.
Disclosure: As a news broadcasting executive the author competed with both NDTV and Network18 across genres of news. He was also associated with TAM as a member of the TAM Transparency Panel.
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First published in The Hoot (www.thehoot.org), 20th Oct 2016

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