Home >companies >people >I am more enthused not by the numbers but by the direction: B. Sai Kumar

Mumbai: After a major retrenchment at the company in the last one year, B. Sai Kumar, group CEO of Network18 Media and Investments Ltd, was thrilled with the company’s financial performance this quarter. In an interview after a board meeting on Monday, he spoke about the potential of digital media and plans for its broadcasting business. Edited excerpts:

Your first thoughts on the quarterly results...

It’s a quarter of record profits. The kind of numbers that we are posting is a first and sustainable. I see this as the result of a few fundamental moves that we made which is now going to be putting us on a new trajectory. So while it’s always good to see good quarterly results I am more enthused not by the numbers but by the direction.

What is the mandate behind News18.com, Firstbiz.com and the Gujarati news channel?

These are opportunities. With the ETV acquisition we have made a fairly sure-footed move in the regional broadcast market in news and entertainment. News consumption is going multi-device faster than entertainment and News18.com is, therefore, a logical extension of that. News18.com is going to go bilingual and enter many more geographies. Network18 is going to increase its digital footprint not only in content but also commerce. Between bookmyshow.com and other e-commerce websites we are one of largest digital commerce players in this country. With CNBC Gujarati, which is a natural extension for CNBC because Gujarat is truly the language of business, and News18.com and the various e-commerce initiatives, you will see us emerge in the next fiscal as the largest broadcast and the largest digital network.

How do you plan to monetize your digital brands? Firstpost.com isn’t profitable yet.

Firstpost.com will break even next year. This is, therefore, a three-year break-even product. It doesn’t happen in many mediums.

We are here to build serious and credible products that engage audiences. Traffic growth has been stupendous. Advertising will follow. The means for monetisation for digital are far more exciting than the choices available for broadcast or print. I don’t think management teams have gone and tested all these means.

We’re seeing green shoots in that. Most of the growth that we have seen in Moneycontrol and Firstpost in the last two quarters has come from non-display, non-traditional advertising. It has come from embedded ads, native advertising and joint conversations with the sponsor.

Your comment on the entry of Huffington Post in India.

When brands like Huffpost come into the market, it is an acknowledgement of the maturity of market in the space. These are brands that do a lot of thinking before entering geographies. I believe we are at the cusp of a monetisation revolution in digital. They must have seen it too.

To that extent, their entry is welcome. As far as competition goes, we are in the Indian market where there is no dearth of competitors in news or entertainment. Competition is not new for us. It’s a huge market, broadband is coming up, digital is growing. What else do you expect? Join the party, that’s all.

CNN-IBN has not been able to beat Times NOW while IBN7 is not even among the top three Hindi news channels. How do you plan to change that?

You’re absolutely right. IBN7 has recently seen change in editorial leadership. We consider this as a brand which can do much better. Management teams will have it very easy if every channel was number one. We need to have something to worry about. We have plans.

But I still consider CNN-IBN to be a leader in its space. Measurement for English and business news is a bit of an issue. So, yes, the competitor you named could be the flavour of the season but I’ll want to draw your attention back to what works in key constituencies. In any mature market players take positions and viewers take positions for that player. There is enough space in the English news market for two or three leadership brands and that’s where we are.

It’s also important for us to take a look at our lives in news from a 15-20 channel network position. When we were a one trick pony we were very focused on that one trick going alright. Today you are a network of 15 –20 channels, for all those channels to be number one is ideal but if they are not all that we can say we’ll try and make them number one every week.

With a new corporate owner at the helm of affairs ,there is talk of how much they control the management both in terms of profitability and editorial line.

I’ll give you a frank answer but please don’t misquote me. I know a lot has been talked and written about it but if you ask it from me, today was our board results and I have not met anybody from there (RIL). So this whole thing about control is something that is being written about and talked about. We have stated it and Raghav (Bahl) has stated it that this is something between his investment companies and that group. There is no direct investment into Network18 or TV18.

Your comment on the advertising market in the last four-five quarters…

Let me start with the cliché, the ad-to-GDP ratio. I truly believe we are under indexed. We were used to 15-18% growth rates, I believe that on a compounded basis to grow at 15-18% growth rates for good 4-7 years would have corrected our ad-to- GDP ratio, so that was the expectation from us in the market and it was not an unreasonable expectation at all.

But when the economy goes soft, you have to go back to the basics of media buying. The media buyer has a funnel approach always. The platforms that give you return on investment (ROIs) -- so GECs (general entertainment channels) and cricket -- have continued to be strong. Colors continues to be strong, so do Star Plus and Zee. Niche and news (advertising) have gone soft purely because of the funnel approach, because you prioritize.

But that has to change...and we are seeing that shift.

In the last three months we have seen interest coming back into news because of the elections.

Having said that even in broadcast in news and niche you will need to focus more on innovative solutions, the advertiser is getting bored of one-way communication even here. He’s getting spoilt by digital. We expect to correct the decline in growth in news very soon.

Could you share plans for the entertainment business?

Well, let’s look at the results for this quarter. I think if you remove our Motion Picture losses then our entertainment broadcast operations have seen a spectacular performance. I see that continuing on the back of two things -- we have got stellar brands there whether it is Colors or MTV or Nick or a Comedy Central. Net distribution income from India Cast continues, especially Colors and MTV are the flavour of the season in international markets.

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