Mumbai: The media arm of Reliance-Anil Dhirubhai Ambani Group (R-Adag), Reliance Broadcast Network Ltd (RBNL), is receiving expressions of interest from potential partners to float television (TV) channels together, even as it prepares to launch a bouquet of three channels later this month with its joint venture partner, the US-based CBS Studios International, under the BIG-CBS banner.
“There are people who are talking to us,” RBNL’s chief executive officer Tarun Katial, 35, said. More channels could be in the offering with CBS in local languages and speciality genres. As RBNL looks to metamorphose from being a radio company to a complete media services firm with presence in business segments such as TV and out-of-home media, one of its biggest assets is the 20 TV channel licences it has secured from the government, which will allow it to expand. Edited excerpts:
The third phase of bidding by private firms for radio stations is around the corner. What will be your strategy?
We would target areas in regions where we are already present. The hub-and-spoke model works well for us from a cost point of view as we would already have built the content and the brand in that specific region. Also, if the government allows, we would like to have multiple frequencies in metros as demand is huge with limited frequencies available. To be a significant part of someone’s media-spend plans, wide geographic reach is important. By building a pan-India network and not taking a metro-specific or regional approach, our radio business has turned Ebitda-positive very fast (Ebitda: earning before interest, taxes, depreciation and amortization). The third phase is a good opportunity to build on that profitability.
RBNL recently raised Rs 400 crore. Is that enough to bid for new stations?
A significant portion of the funds raised would be used for bidding for new radio stations, though it would largely depend on the nitty-gritties of the policy. We have to see the number of frequencies that are opened up and in what regions. Our objective is to maximize media inventory in the metros and create regional reach.
Is there enough demand from media buyers to justify new stations?
Over the next six months, one of the key concerns media buyers would face is whether they can air their ads. While on an average there are six stations in metros, smaller cities have only two to three. So, there is very limited inventory and a large number of brands seeking a share of the pie. Our channel has been running at 100% inventory throughout the year and that has helped in firming up yields.
You’ve entered the out-of-home media space and created a lot of properties in Delhi around the Commonwealth Games. Has the controversy surrounding the event had an impact on you?
The Commonwealth Games have helped us in executing public-private partnership projects with the Delhi government very fast. All the inventory has been put up, including 100 pieces of street furniture such as signages, public toilets and even dustbins, where we will be able to sell media space for the next 22 years after the Games are over.
What next for RBNL?
We’re very focused on creating formats involving intellectual property, such as music and TV awards and conferences, conclaves and exhibitions surrounding them, both in the business-to-business as well as the business-to-customer space. Also, TV will play an important role going forward. We’re committed to building local franchises, whether they are localized versions of CBS formats or Indian IP (intellectual property) that can travel abroad.
Would you look at more TV channels after the new launches?
We have licences to launch 20 TV channels. Our joint venture with CBS is long-term and allows us to do more than three channels. They could be in local languages and specialty genres. We’re definitely going to expand from where we are. We’ll have to see how the landscape changes with digitization kicking in. Our partnership with Reliance DigiCom will allow us to distribute very effectively.
Are you in talks with other potential partners for TV channels?
There are people who are talking to us.
Tell us more about your plans for TV.
We’re very committed to building local franchises, whether from some CBS formats or whether it’s original local IP which can travel worldwide. My fundamental belief is that time has come in India to start looking at programming produced in India but not necessarily in Hindi. It may not be in the fiction space, but there is a lot of scope in the lifestyle, reality for us to produce something exceptional.
And because of the 360-degree opportunity now, we’re able to monetize that enough to make a margin on it. At one point of time, because people thought English was so niche, you weren’t able to cover your basic production costs of a high-end show on an English channel. But now with your ability to sell to specific audience on the ground, on mobile, on air, and online, more than helps you monetize your costs on high-end properties.
If we were to do India’s Next Top Model, our ability to do enough on ground, lead up, activation with luxury brands would more than cover an extensive production budget, which used to be a classic concern for why you wouldn’t do a show like this on an English channel. But India is a huge market for luxury brands today and everyone is seeking a piece of that pie, with few properties, barring high-end magazines, to latch on to.
RBNL is trying to become an across-the-spectrum media firm. What is your human resource strategy for this transformation?
We (almost) never hire (sales staff) from media companies, because we don’t want them to come with preconceived notions of the way media gets sold and not be able to drive yields or volumes. We want our people to come in with a fresh mind, so we can train them the way we want to. If you want to have a new way of operating in the market, you can’t have walled gardens operating. So we’ve built a team of 250 sales people who have never done media sales before.
A large part of the time goes in training these people the way we want them to, and we’re one of the biggest poaching ground for media firms today. Attrition is at 25-30% and we continue to try and bring that down, but we can’t do very much about that. But again, you have to find a new way of doing business, like no one had sold integrated media.
That fact that you are a young CEO must be an advantage for you in transforming the company?
Time is of the essence in a market like India. If you keep waiting for the right time, resources and the right kind of scale, you may not be able to achieve what you want. I was fortunate that our chairman and vice-chairman were supportive of the fact that we wanted to make RBNL a multimedia entity.
The average age of this organization is 32, and being fairly young, it helps in seeking opportunities and acting on them fast. I think what we all bring to the table is an ability to not resist change.