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INTERVIEW
"I EXPECT A NEW LOOK CHANNEL V BY MAY 1999"
Channel V Asia managing director Steve Smith comes across
a refreshing change from several television heads who hesitate
to reveal any numbers or talking openly about problems at
their charges. He is frank about not having a fail-proof formula
which will rev up the flagging fortunes of Channel V. The
intent in being open may be strategic, but it nevertheless
is something many other heads should follow. It will help
in bringing a lot of transparency and credibility to the television
business in Asia, which has to gain a lot in maturity.
Smith spoke to the Indian Cab&Sat Reporter on the challenges
he faces.
Q.What was your assessment of the music channel scene
in Asia, when you joined Channel V, with more specific reference
to India?
A.When I joined Channel V what struck me was
how undifferentiated the two major brands - Channel V and
MTV - were from each other. You remove the two channels' bugs;
you will not be able to tell one from the other. MTV has mimicked
what we were doing in localisation and leaped over us. It
got the right Hindi-English mix and gained critical mass.
But initially MTV was reluctant to localise; Viacom wanted
Americano. That's one of the reasons Star TV and MTV parted
ways. When it returned on its own it was western, but it did
a flip and went Hindi. And it took away the market from us.
The difference is MTV is a global brand with a great business
in the US and it's gaining in Europe.
Q.What went wrong with Channel V?
A.Channel V was a victim of its own success. We had pretty
fast growth. We found a formula that we were comfortable with.
Competition came in and we got complacent. Then when we were
talking about a fightback, the owners of the channel started
asking for returns and we had to focus on cost cutting measures
just when the competition was on a roll. This led to further
problems.
We didn't change. It's so critical to evolve. We took our
eye off the need to change. We took our eye off the ball.
We didn't turn over veejays; we used the same program formats.
My predecessor was in his seat for more than three years,
I think much too long. My belief is that a person shouldn't
be in charge of a music channel for more than three years.
You have to change leadership regularly. I have a two-year
contract, extendable to a third. You will not see me in this
position beyond that.
Q.What changes are you likely to bring in Channel V in India?
A.We are still trying to sort out the situation.
We want to differentiate the two channels - MTV and Channel
V, that is. The core of our strategy is to wean the Indian
youth to Channel V. It should be the channel of choice for
kids. 70% of music on MTV is Hindi film music. The channel
appeals to all audiences, even adults. And my experience shows
that kids don't like any channel that their parents like.
We can't forget there are four music channels in India today.
Being just a music channel is not enough. Should we be just
a music channel? Or a lifestyle channel? That's a classical
dilemma. We are facing reality and trying to find market opportunities.
I hope and expect that by May this year Channel V will have
differentiated itself and got its new identity.
One option being considered is to go regional and make Channel
V a music platform for the major Indian languages. But we
have to manage this carefully without alienating our core
Hindi audience.
Q.Will there be drastic changes in the management of Channel
V in India?
A.I'm beefing up staff. Already a new executive
producer Punit Seera is in place. A new business development
person Mel Velarde has been appointed. We are looking for
Jules Fuller's (Channel V head in India) successor. We need
an Indian guy to head Channel V in India within the next three
to six months. Jules is a creative and ideas guy who has been
dumped with administrative work, which means his abilities
are not being utilised to the fullest. He will be more useful
elsewhere in Channel V. We are looking for a distribution
head to deal with cable TV operators in India. We need a commercial
director to coordinate with the Star TV ad sales team on Channel
V. I've taken on a couple of consultants - Shashank Ghosh
and Mahesh Murthy - to help with the reinvention of Channel
V. We want to bring in a performance-based incentives scheme
to the channel.
Q.Is the channel making losses?
A.Yes, we are making losses. Our accumulated
losses are less than $50 million. They are much less than
MTV's losses. The loss this year at Channel V is the same
as last year as we've kept a strict vigil on costs. Growth
in our revenues was 10% this year. Growth last year was much
higher. The big test is going to be this year.
Q.How much funding is being pumped into Channel V?
A.Across, Asia we have managed to get in additional
funding to the tune of $38.4 million. Around 50% of that is
to be poured into India.
Because some of the stakeholders are not keen on continuing
to invest, their holdings will go down, while Star TV's stake
will go up. As per the new equity structure, Star TV's stake
will go up to 63% from 50%. Turner's (through Warner) and
BMG's shareholding will come down to 6% each. EMI and Sony
are holding on to their stakes of 12.5% each.
Q.Any last words?
A.I intend intend to take back control of Channel
V's destiny.. Channel V's revenues.
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