Rajesh Kamat, CEO, Colors

During the start up, everyone jumps in everything. But now we have put together functional experts. We started putting structures. We identified areas and levels that we needed to build in, and in essence would strengthen the systems. You will see this pan out in the next few months, and each of the core functions would see people coming in different levels. The thought is that essentially it has to be a system-driven company. If you are talking a league, you cannot be driven by individual decisions, there has to be a system and process in place and people have follow tem with conviction.

As the Chief Executive Officer of Colors, Rajesh Kamat’s mandate was to put the channel on the forefront of the Indian television. With an experience that spans over a decade from FMCG to media, Rajesh drove COLORS to a leadership position in nine months breaking the nine-year norm of the Hindi GEC space.

Kamat joined Colors from Endemol India, where he was heading the business as the Managing Director for a period of over two years. Prior to that, he spent close to five years at STAR India, where he held key positions across various functions including business planning, media buying and planning, commercial, international business and licensing and merchandising portfolios. It is his diverse experience at STAR that laid the foundation for his thorough understanding of the media and broadcast space. At STAR India he last held the position of Senior Vice President – Commercial & Business Planning and was also a part of the Executive Committee.

In this interview with Noor Fathima Warsia, Kamat speaks on the building blocks of the channel, the steps the company has taken in the last two months after fluctuating between the number one and two spots, and the thought process on what next can be expected from Colors.

Q. By that you mean?

Some would gain more of the advertiser money, and some existing channels would lose, depending on the changes that you are seeing in the competitive structure of the industry.

Q. When was the point, when you stopped doing everything to revisit all your strategies, and see what was working for the channel?

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I would say it was before we had crossed over to the number one position, around early March, when we were roughly in the average of 250 GRPs. Our system was geared from zero to a certain point, and at that juncture, it was needed to pause and visit every single aspect. Because, if you have to consistently do well in the league, then you have to gear up every possible system to measure up to the competency level of the league’s every player. We stopped and we re-looked our content.

Q. There has been a constant allegation on Colors that the channel had the advantage of spending monies like no other channel...

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Yes, we have heard of those too. I will not deny that we were aggressive. When you get up and say that you will be disruptive, there is a certain aggression that has to come in all of your plans. However, we cannot comment on what we have spent, we never have in the past, and hence any figure you see floating around is not ratified.

Let me give you the thought though. We have been in sync with the other channels, and as the business proceeds, you would have a sense of the outlay too. There were reports that stated that Akshay Kumar was paid Rs 1.5 crore, we do not know where they got it from, but cannot do anything about people printing things like these.

The point that people do not see and talk about is what we were thinking when we were making these choices. We did not approach the business on a week-on-week or a month-on-month basis; we did with it on a 12-month, 18-month and 24-month basis. We did not do a brand campaign, we went in with shows.

On any channel, in a 12-month window, most channels would have one big-ticket show with one big Bollywood celebrity, and they make it for 39 to 52 episodes. We have had 16 episodes of Akshay Kumar, and you can even count 13 episodes of Shilpa Shetty in ‘Bigg Boss’ -- how would you call this expensive? We just did it differently. More importantly, look at what these shows did for us. We were buzzing due to Akshay and ‘Bigg Boss’, and they were very good TRP-generating shows too. Was it worth the investment? We are doing it again. Now if you are questioning our business objective, then that is a different question altogether.

Q. So you are saying all these conversations of advertisers not spending, and channels not making money due to slowdown, are not true?

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I don’t think it is. Channels are making money but they are probably experiencing a tighter control of fist. The checks on value is much higher than what it is used to be. The advertisers are spending. We have just come out of the IPL and look at the money that was spent on that. But advertisers are being cautious – instead of a 12-month plan, they may be doing a quarterly plan and there are serious evaluations happening every month. But yes, from our standpoint, the advertising pie has grown even in slowdown. The only that has changed is the share of the different players in the pie.

Q. What about adding more slots to the channel --- your afternoon is still blank.

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We have been toying with it for a while now. The yield on the primetime is higher. There is still so much to do in the slots that can be monetised. We want to stick to the proposition of disruption that we came with, and we are trying some unconventional things -- Hindi dubbed versions, Sunday morning and so on. We want to consolidate weekends and primetime and then afternoon, but yes, you would see the afternoon band launch in 2009.

Q. By when do you see that happening?

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It has already started. Rates are not exactly divided between legacy premium and reach premium but the way we are doing our deal right now, the reach premium is captured, only the legacy remains.

Q. So who has the most problems?

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Channels that have declining graphs. It would be difficult for them to hold on to, or increase, their rates.

Q. Raghav Bahl mentioned Rs 400-500 crore in a recent Moneycontrol.com interview...

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... I can’t comment.

Q. And you have been on track with corresponding revenues?

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We are way ahead of the curve.

Q. ...They instead look at the number of shows that are delivering for a channel. In that sense, STAR still has a higher number of shows doing well...

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How do you define a show that is doing well? The advertiser is creating a campaign to build reach. The question for the broadcaster is can I deliver that reach. We as broadcasters put parameters in it, and work out ways to see if we can build reach faster than, or equal to, someone else. The composition of the number shows doesn’t make the difference.

We have seven odd shows that are an upwards of 3 TRP average, and that is a good potent combination. If you even looked at more stinger parameters like primetime GRPs, we are higher, so as a channel, we are on track on being able to monetise what the channel is delivering.



Q. What are the other things that we can expect from Colors now... Any new channels in the pipeline?

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This is a question that is always tossed up to us. If you are asking me whether, as Colors we would branch out and launch another channel, the answer is that the effort is to really consolidate growth. There are enough avenues of growth within Colors such as international association and syndication, and that is we are focussing right now. There is a lot more to do here itself before launching anything else.

Q. Finally Rajesh, how do we know which of three of you on top is doing well, and will get consistent in occupying that slot in the future?

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The fight right now is good for everyone – the viewers, the advertisers and even for the broadcasters. You would see that there would be various versions of the successful products that would keep coming up – that is true of any industry. If you are the one who comes up with the idea that pushes the envelope up, and this could even be only for a quarter, it is your quarter. And that is what everyone, including us, is trying to do.

Q. And the slowdown has not impacted that? Are you able to increase your ad revenues the way you would have liked to?

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We probably have the least of problems on that. We have a rating chart that is going up to back up the increase that we are bringing in our ad rates. But this has been our plan since the start. We did not enter long term deals, we really held on to rates. We gave advertisers the comfort that their brand is safe, since we are going to spend on our channel, and do what we have to stay ahead.

Q. ...For instance?

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We had the option of launching two more hours of content versus replacing two shows. We chose to replace the 9.30 pm and the 10.30 pm shows since we felt that the slots were not delivering up to the full potential. There is a temptation for adding more as this can lead to more GRPs. But instead we took such decisions, and you can see that these were more business-led calls. Another important decision that we had to make at the time was on distribution. We were generating the content, where we could have taken the chance of moving from push to pull. We had discussions with all bouquets and then zeroed in on OneAlliance. The risk was the same there as well – this could have been a direct impact on GRPs and hence advertising itself. But eventually, it paid off.

Q. Fair enough, tell us what are the changes you made on people front?

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During the start up, everyone jumps in everything. But now we have put together functional experts. We started putting structures. We identified areas and levels that we needed to build in, and in essence would strengthen the systems. You will see this pan out in the next few months, and each of the core functions would see people coming in different levels. The thought is that essentially it has to be a system-driven company. If you are talking a league, you cannot be driven by individual decisions, there has to be a system and process in place, and people have to follow them with conviction. Not creativity but everything other than that. For instance, just within sales, there are systems in place for inventory planning, volume of sales, the kinds of money coming in, servicing clients and so on. And there is a similar action happening across content and marketing.

From a zero base channel, we are now a 250 GRP plus channel. And that means that the marketing strategy would change too. Our channel itself is a great platform right now, so where we would do a six-month outdoor campaign, now a 10-day campaign would suffice too.

Q. Well, are you comparable to STAR and Zee, in terms of revenues, in the market?

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I would say Zee but not STAR. STAR still enjoys the legacy component, by virtue of their consistency. It is not easy to break those shackles; the legacy premium still goes to STAR. Our effort has to be consistent or be equal to STAR or higher than that, and then we should get that premium also.

Q. Media planners and advertisers have been very vocal that channel GRPs is not something that they look at...

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...It is not

Q. Why did you choose not to partner with the distribution set up within the Network18 domain itself?

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Each of these units is standalone, and each of them has its own business objectives. You would not see a CNN IBN or a CNBC tying up only with Colors. Since each unit has its own business objectives, and if the partnership with a group company can match the objective, it is great. But if they don’t, then the business head is free to proceed with whatever he feels leads him closer to the business objective. We partnered with OneAlliance for two reasons -- three of our channels were already there, and IPL. IPL was in April, which was when we wanted to go pay. The OneAlliance bouquet would get negotiated, and it made sense for us to get on to the bouquet at that stage. IPL and Colors possibly would have been a great combination.

Q. In the current scenario, there are three players on top, where each is more or less in the same bracket as the other. We are at a place where there is no distinct leader. Is this good or bad from a Colors’ standpoint?

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Yes, the industry has reached the point where the ranking of a channel is based on its seasonality, the highpoints, the spikes in episodes – much as is seen in the western broadcast industry. There is no distinct leader. As an 11-month old channel, we have achieved a great feat. We are at the top in the league already, and we have maintained the consistency.

The next question is from here, where. The way we see it, all the three channels would look at consolidating their position, but this kind of a see-saw state would continue for at least next three to six months. After that, it depends on what strategies people take and how each can differentiate. If there is something that would set one apart from others, and each of us would gun for that.