Tony D'Silva is an old hand in the distribution business. And when Star India hired the former head of international operations at Zee Telefilms, as executive vice-president, distribution on 2 May, to fill in a position vacant since Arun Mohan put in his papers, it was a decision welcomed by the trade.
D'Silva joined Zee in December 1999 from Modi Entertainment Networks where he was CEO. Before his stint at Modi, D'Silva was with tobacco major Godfrey Phillips.
In this freewheeling interview with indiantelevision.com's Thomas Abraham, D'Silva outlines how he proposes to keep Star ahead of rivals Sony Entertainment and Zee Telefilms.
Excerpts:
Now that you've settled in at Star, could you give an overview of where you're at as far as distribution numbers are concerned? According to my information, Star has a declared all-India connectivity of 3.5 million.
Actually, we currently have a paid subscriber base of over 6 million.
What is your corporate set up for distribution currently? Is that good enough for the current scenario or do you see some restructuring? If there is weakness where do you see it?
There are no significant weaknesses. Fortunately, we have a very good team of people.
But there has been some reorganization of our operations. What we have done is we have integrated some of our support services into the regions, to make them more productive and efficient. eg. trade relations, which includes promotions, seminars etc and C band dish services.
We have also brought in some people from trade relations, who will work much more closely with our programming and marketing team. This is essentially towards supporting the field force in their activities on the ground.
Additionally, we have split north and east into two regions. So now we have four regions - north, south, east and west - as opposed to the earlier three.
| "We are focused on the distributor. We will be spending a lot of time and energy and obviously money in training these guys" |
What about the management structure?
There have been some changes there. Directly below me is Akhtar Javed, who is the all-India sales head. Of the four regional heads, Phiroze, who was earlier heading the western region, is now heading the east. We needed someone with experience to drive business in this area. This is essentially a nascent market; so the challenges are much more.
The west is now headed by Vikram Tukral. He was earlier heading the north. Heading the north now is Samir Malhotra, who was earlier looking after C band sales, technical and has coordinated our international business as well.
In the south, there are no changes. Mujib continues to head.
Other than restructuring, are there any changes you have instituted?
We are upgrading our software, making it more distributor and field force friendly. This will result in far greater interaction between distribution and the IT department. This is an initiative I have taken.
What sort of arrangement do you have with your distributors?
By and large, all our distributors are exclusive to us or may have ESS (ESPN Star Sports). We are focused on the distributor. We will be spending a lot of time and energy and obviously money in training these guys.
As far as growing the numbers are concerned, do you agree that there appears to be a plateauing off as far as actual subscriber base increase is concerned? And if so, the only way you can look at revenues is to increase paid connectivity. What are your goals on that front for the coming year (1 July 2002 to 30 June 2003)?
Our next focus area is the rural market. These smaller markets have potential for growth. We are targeting paid connectivity of 7.5 to 8 million in the coming year.
| "Our strength is without doubt our programming. As for Sony, everyone is talking about it in the market. What is happening on the ground is still to be seen" |
On the issue of declared connectivity, the MSOs complain that they are being squeezed at both ends - broadcaster as well as franchisee. The difficulties of getting the franchisees to toe the line, added to consumer resistance leaves the MSOs in a no win situation, is their argument. And this appears to be borne out by Hinduja TMT's just released financial results. Their losses are mainly recorded at the cable arm end INCableNet.
All those working on the ground, which is the broadcaster, the MSO and the link operator, have to work together to make this business more viable for everyone. I also feel very strongly that the law enforcement machinery should also support this activity to prevent piracy in the market place.
Talking about INCableNet, we seem to be headed for another round of blackouts and such skirmishes because a new subscription contract is under negotiations. Am I correct?
Well, our contract has ended. We have given them a proposition and the discussions are on. We expect to come to an understanding very soon. Our objective is not to have confrontation. The objective is to grow together.
The relationship with MSO Hathway (in which Star officially has a 26 per cent stake)? Is it of benefit?
How will you make it more beneficial? Our relationship with Hathway is an arm's length one. They get no special benefits. Neither do we. So our negotiations with them would be on the same plane as any other MSO.
In the south, Star gets limited carriage for Vijay TV because SCV is a dominant force in Tamil Nadu? Additionally, Star Plus does not even get a look-in in that market? How do you intend to change that?
Star Vijay is carried by SCV and that, too on a good band. There were some problems till two months ago; but they have been sorted out.
One fact is that in the current scenario, to significantly increase connectivity you have to offer compelling content. And at an all-India level this is through cricket. Which is why ESPN Star Sports has the highest declared connectivity in the country. Sony can confidently state that it is going to up its numbers massively by the time the World Cup kicks off next March, probably earlier because there is the Champions Trophy in September. What has Star got to offer at this stage? To increase declared connectivity that is?
As far as declared connectivity is concerned, actually at an all-India level we are almost on par (with ESPN Star Sports). Where they are definitely ahead is in the south. But in the northern markets we are ahead. So it evens out.
Regarding the second part of your question, our strength is without doubt our programming. What could be more compelling than that? As for Sony, everyone is talking about it in the market. What is happening on the ground is still to be seen. We will have wait and watch on that one.
With all three players Star, Zee, Sony trying to up revenues from the same till, do you see a scenario soon where the cable ops may well start picking and choosing bouquets. The days of the all-encompassing basket of channels are numbered, is it not?
It is a question of time, but it will definitely start happening. As is the case in the rest of the world.
Who is the bigger threat, Sony or Zee?
Actually, it depends areawise. But I would say both are our competitors. Though if I have to choose, it would be Sony. Once the cricket kicks off anyway.
Star has got a bit of bad press as the prime mover against CAS. Is this fair do you think? And how does Star respond to the criticism that it is revealing its "anti-consumer" colours in its strident opposition?
My response to that is Star has never said that it is against CAS. What we are concerned about is its implementation. As a concerned party, there are still many issues on which there is no clarity as yet - hacking, piracy, SMS, transparency. What is the implementation process? It is not as simple as is being made out.
