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“The year has been extremely good. We became a Rs 100-crore brand last year. This year, with Awaaz kicking in and the IBN news channel launching, we hope to become a fairly significant news network and that we will have two of the most influential channels in India in our network.”
Haresh Chawla, CEO, CNBC-TV 18, started his career with HCL-Hewlett Packard after graduating with a B.Tech from IIT-Mumbai. From HCL Comnet, he moved to another start-up, but this time in the unconventional sphere of film distribution, with ABCL. His affinity for start-ups extended into the next assignment as well, heading the newly-launched music division of The Times of India Group -- Times Music. In his two years there, Chawla was instrumental in building the brand as well as the repertoire of Times Music across a vast number of genres.
Chawla joined CNBC-TV 18 in 1999, and under his leadership the channel has become a much-viewed channel by corporate India. After ‘Awaaz’, he now readies to launch India Broadcast News. In conversation with Pritie S Jadhav of exchange4media, Chawla speaks about competition and the network’s strengths. Excerpts: Q. How far is Awaaz from reaching breakeven?
We are expecting to break even in the next six months or so.
Q. You have a niche and relatively well-defined audience. How do you expand your base?
We believe that we created the category of business news, and now, with competition entering, we have to dominate the category, we can’t own it anymore. So our domination of the category is done in two ways – one is to continue to dominate English news, and the second one is to open up a whole segment of Hindi business and consumer news, which we have done through Awaaz. We clearly have seen that there is very little overlap of viewers of Awaaz and CNBC, which is not unexpected looking at the content differentiators in the products. So, as a TV18 network, we have added on several new viewers from smaller towns and cities where all the spending power resides today.
Q. 2004 saw a number of kids channels being launched, and this year we see more news channels, lifestyle channels coming up. What do you think is the reason?
We are in a phase in India where television players continue to look at the entire business optimistically. And clearly, there will be a lot of expansion in the next couple of years, with several channels coming in despite the fact that there is a bottleneck as far as distributing a channel goes. Also, foreign players have realised the potential of the Indian market. We have also seen the overall market getting into consolidation and see the impact of technology over the next three years in the subscription part of the market, which will make the television market larger. Currently, everyone is just milking the broadcasters as they are seeing revenue linkage come down and, therefore, are seeing the future expansion of the market. It is a state of an industry where all players are visualising a different market place three years later.
Q. Would you say that the space between general news channels and business news channels is decreasing? Why or why not?
No. See what CNBC has done, it has proved to the market that the business news category is as large as the general news category. Therefore, as far as audiences go, our influence arrival is that of an NDTV 24X7, our revenues are step-in-step with them. So, if you look at our market position, we have proven that the business category in India is as relevant and as important as the general news category. But to say that the two are merging is not right because as we go forward and more and more players enter, the gap between the business category and general new category will actually widen.
Q. Do you feel that event driven programming has and will help the channel?
Our channel is defined as a user’s channel versus a viewer’s channel. People don’t come to us for entertainment, they come to us for information analysis. Thus, an event allows getting more than three voices unlike the studio show. It allows the channel to gather depth and breadth beyond what is possible within a studio. That is a conscious forum for us.
Q. And how does the inventory usage look like?
We have very healthy inventory utilisation and, at the same time, we are constantly in the process of negotiating our tariffs. So, if you look at the combination of utilisation and tariff, it is pretty much at optimal level and improving.
Q. With so many new news channels making an entry in the Indian television space, does CNBC feel threatened?
Frankly, we are keeping an absolute eye on our competitors. I guess the market has become competitive and I would be foolish to say that we are not paranoid. So far, our position remains unaffected. If you see what we have done, it’s not as if that’s happened by accident. Over the last one year, we have made considerable investment in the business and, secondly, we have created entry barriers for the competition. So, the issue is not whether we are threatened about it, the issue is whether we have done the right things to ward off certain threats.
Q. What does the channel need to do to keep its position?
The business viewer is an extremely discerning viewer, so I think we are helped by the fact that the content, credibility and information requirement of the viewers are almost like a high involvement purchase and thus, all product attributes start to matter, and when that happens, then everything tends to matter, like number of man-hours and the experience that journalists/anchors have, the global capabilities of the brand, our experience of being in the environment, and being the sole channel for the last five years.
The category is a high involvement one and, therefore, it becomes much easier for us to do the right things here. The consumers in business look for competitiveness, credibility and so on, and thus our competitors will take time measuring up to those parameters.
Q. How has 2005 been so far as far as ad revenues are concerned?
It has been extremely good. We have continued to show phenomenal growth in ad revenue. We became a Rs 100-crore brand last year. This year, with Awaaz kicking in and the IBN news channel launching, we hope to become a fairly significant news network and that we will have two of the most influential channels in India in our network.
Q. What is IBN’s rationale and positioning?
The fact of the matter is that we always had our eyes on the general news space because this is an audience that we understand and we understand the advertisers, too. Therefore, it was very logical to enter the general news category, which is clearly a space that has got a monopoly. We also feel the market can absorb and will be delighted to have an alternative product. Yes, it will be a challenge for us to make sure that the alternative that we offer is different from the current products. I won’t be able to discuss any further details on this, at least now.
Q. What have the investments been like?
We have invested hugely in our facilities, putting in over Rs 50 crore in upgrading our facilities one year ago. We spent a lot on setting up our infrastructure across the country. We have invested considerably in our manpower as well. Therefore, all efforts of that investment are really visible. Today CNBC has got about 400-odd people who do one job, i.e., report on business news in this country, compared to the competition who may have about 40 or 50. Clearly, the extent and depth of input is showing up on the output and that’s the reason the competition has not been able to make a dent in our position. Going forward, I guess we are keeping our eyes on the ball completely. Our focus is to continue setting the benchmarks for the business.
Q. What have been the positive implications of Awaaz Consumer Awards?
Awaaz is gathering momentum. I think we got its distribution set-up right and running absolutely fine about three months ago only. And now that its distribution is in place, it is gathering audiences at a fairly good pace. The response from viewers and advertisers has been pretty encouraging so far.
Q. How much does seasonality affect the performance of your channel?
Seasonality for a business channel is really the budget quarter. It is an extraordinary quarter, where you may get a 10-15 per cent flip on your revenues. But apart from that, there is very little seasonality.
Q. Are things on track for TV18 to raise Rs 55 crore to fund IBN?
Oh yes, everything is on track! I can’t disclose anymore to you because we are a listed company.