2 009 is expected to be a rough year for all in media. Television is no exception. With the stockmarket collapsing and balance sheets getting battered, advertisers have become cautious and the current quarter is expected to be extremely choppy. Multi Screen Media president (network sales, licensing & telephony) Rohit Gupta concedes that clients are consistently assessing the environment and signing quarterly deals as against the annual ones earlier. He, however, is confident that Sony Entertainment will ride through the stormy times on account of the strength of its network.
Indiantelevision.com's Ashwin Pinto caught up with Gupta to find out about what lies ahead, the mood in the market, the importance of tentpole properties etc.
Excerpts: |
How was 2008 for Sony in terms of revenues? What growth was managed over 2007? |
This year is expected to be challenging with the recession. What impact will this have on Sony and the television industry?
Print and outdoor will take a larger hit but television will still grow. A recent report projected a 10 per cent growth which is fair. TV has been growing at 18 per cent over the last few years. While that will not happen this year, there will still be growth. |
For the IPL what is the upside being looked at this time around?
Everybody including the franchisees have more time to prepare. Last time we just had 45 days to prepare. This year the hype will start after the auction ends. We will hold a meeting with the franchisees after 6 February to decide on the course of action to take. Also at the point of time there is no other major property on television. |
So you are confident on the financial performance of Sony for the IPL despite the slowdown? |
Have deals been closed?
This allows us to access more brands. Last time the IPL was not tested. Exclusivity was an incentive that we had to concede. By not giving exclusivity we will ensure that multiple brands can co-exist. |
But won't it be a challenge to get many brands on-board in a difficult climate?
I don't think that the rates are a problem. The challenge will lie in the outlay that a client puts on IPL. So this time around we will have smaller packages. The number of clients taking spot buys will go up. One does not have to buy all 59 games. A company can buy for ten games at a stretch. There is flexibility. |
Has the revenue split within the group changed over the last couple of years? I cannot give any numbers. However our dependence on the large channels is not that high. AXN and Pix are growing substantially. Max is now a very big channel in our network. |
What is the clients mood like in general?
The key is to have tentpole properties that can be sold. You need to have a distinctive niche in the market. Clients want more accountability. As a broadcaster you need to be responsive and understand clients' needs. You have to make sure that the client gets value back. Everything is not necessarily about a rate. The question lies in the effectiveness of the media buy. |
Apart from IPL what are the other tentpole properties coming up for the group? |
In the GEC space are the new arrivals having any impact? Is the ad pie growing or merely getting sliced further?
New channels will come. They may be on top for a while but the fact is that nobody is on top all the time. Clients also look at networks as opposed to channels per se. They want networks which are strong enough to withstand pressure. They want networks that have the sustaining power to ride over the tough times. Besides that you need big properties which ensure that clients look at you differently.
Each of our channels is in the top four in their respective genre. Sab is number one in the second level GEC tier. Sony has managed to hold on to its share more or less. Other channels have experienced a bigger fall in the GEC space. We may not have many channels but what we have done is to focus on building them. |
How has Sony built up its client relationship management efforts over the years? |
Which categories will be affected in terms of TV advertising due to the slowdown? |
Coming back to the cricket front the New Zealand tour is the first time that Sony will air bilateral cricket. How is this event being positioned for viewers and clients? |
But isn't the timing an issue as the telecast of the matches is very early in the morning? |
How many sponsors are being looked at?
We have clients who are interested in both the New Zealand series and IPL. That would give them visibility from Feb till June. So we are doing special deals for them. Generally we look at six to eight sponsors. |
Are you also looking at doing long term deals with clients for IPL? No! We believe that the IPL which is a big opportunity is better served through yearly deals. You have the option to re-look at things. |
IPL broadened the viewer base. Has the client base also grown for cricket as a result?
Yes! Godrej an FMCG company came on board. They do not associate themselves with cricket. Max New York Life came on board. It worked well for them. It was not the traditional clients that came on board. This year also you can expect to see some surprise companies coming on board. IPL after all changed the way TV viewership happens. It is not just the male TG that tunes in. |
Will the IPL be simulcast?
No! It will only be on Max. We did that with the Cricket World Cup in 2007 where some matches also aired on Sab. However viewership got disrupted and the channel loses share. Then it is difficult to get viewers back. |
When HBO left there was a gap created. Is Pix now starting to fill this gap?
It is pitched as a premium movie channel. It delivers in the 25+ SEC A, B category which is what a lot of marketers target. All the large brands are on it. |
How come Pix decided to air soccer with the FA Cup? |
The other two major distribution bouquets have two English movie channels - a mass one and a niche one. Isn't Sony at a disadvantage here with just one channel that does not have the latest offerings?
It does not affect the advertising side. Channels like MGM (which is in the Star Den bouquet) do not carry ads anyway and it is dependent more on a subscription kind of revenue stream. |
What is the roadmap forward for AXN?
AXN is doing well and has been growing at 25 per cent CAGR. You will continue to see local content. You will shortly see the AXN Action Awards. Each year you will have three shows produced in India. |
Does cost control become important in this environment though?
This is an area we always look at. It is something that we are always conscious of and it is not as if this area has suddenly assumed importance. For us it is business as usual. One has to see the returns more carefully though. |
On the licensing front how has business grown over the past year?
This was small four years back. However we participate more actively in trade fairs like Mipcom and we showcase more content in the form of formats there. Our shows are sold in European markets, the US. We took all our formats to Mipcom. along with other shows like Filmfare, Stardust Awards. The other aspect is the Hindi movie licensing business. We syndicate them wherever we have rights. |
Finally we are seeing channels advertise on rivals. What is Sony's policy?
We do not advertise on competitors nor do we accept ads from them. We accept ads from kids channels, news channels as we do not operate in that space. But you will never see us air ads from a movie channel belonging to a rival network. We are not desperate for revenue. |
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