New Delhi: LS. “Raj” Nayak may be exiting NDTV Media, the joint venture company he formed with news broadcaster NDTV Ltd.
NDTV Media, where NDTV holds 74% equity in the venture and Nayak and his team hold the remaining 26%, was set up in 2003 to offer advertising sales and marketing services to television channels run by NDTV Ltd as well as other media companies.
Nayak, chief executive officer, NDTV Media, said any comment on the issue would be premature. A questionnaire emailed to NDTV’s group chief executive officer K.V.L. Narayan Rao last week remained unanswered till late Monday evening.
On Monday, when reached over the telephone, he asked this reporter to call later, but then couldn’t be reached.
A senior executive at NDTV Media said almost the entire team of 200 people working in the joint venture is likely to move to a new company being set up by Nayak.
He refused to divulge the name of the new company. Given that neither of the parties involved has so far made a comment, this executive asked not to be identified.
“The modalities of how the joint venture will be dissolved are still being worked. We are also talking to all our current clients—including NDTV—to move their businesses to the new company. But those issues are still be discussed,” added this executive.
In 2009-10, NDTV Media has generated around Rs320 crore in gross revenue for NDTV’s news channels—NDTV 24X7, NDTV India and NDTV Profit. The executive cited in the first instance, who handled some of these channels, said the company managed to improve its performance over last year on the back of the general election last May and the two Union Budgets (one last July and the other in February), which triggered a spike in advertising spends on news television.
Tensions between Nayak and the NDTV top brass first surfaced when NDTV did not give the mandate to sell commercial airtime for its entertainment channel NDTV Imagine to NDTV Media.
Instead, Sameer Nair, chief executive officer of the Hindi entertainment channel, set up his own sales and marketing team in 2008. A few months ago, NDTV sold NDTV Imagine to Turner Asia Pacific Ventures.
Though NDTV Media was launched as a fully independent media marketing and consulting company, the NDTV branding may have restricted its growth with many broadcast companies remaining reluctant to work with the firm because of its close association with NDTV.
Even though NDTV Media did get business from Filmy, Mi Marathi and UFO Movies, media industry experts remain divided on the potential of the media ad sales outsourcing model.
Rajesh Jain, executive director at audit and consulting firm KPMG and head of its media practice said the jury is still out on whether the outsourced sales model has worked.
Mona Jain, chief operating officer of VivaKi Exchange, the centralized buying agency for Publicis Groupe SA, however, said there is room for independent media ad sales agencies, which can cater to India’s growing population of niche, television channels as well as publications.
A top executive at media agency ZenithOptimedia said rumours about the split between Nayak and NDTV have been doing the rounds for a while. “Probably other independent sales agencies are also making a pitch for NDTV’s business and promising better returns,” added this person who did not want to be identified.
According to the NDTV Media executive cited in the first instance, the company works with NDTV Ltd on a “commission basis”.