MUMBAI: It was in the year 1994 that Sameer Nair was hired as a director-producer in the television industry. Shortly later, he became Star Movies' executive producer.
In the following years, he controlled acquisitions of movies for Star in India, and subsequently became its programming head. He eventually became the CEO of Star TV-India, a position he enjoyed till 2007. In 2008, Nair became the CEO of NDTV Imagine, a Hindi general entertainment channel from the NDTV stable, which went off air in 2011. In 2012, after quitting NDTV Imagine, Nair partnered with a few ex-colleagues and founded few startups in the media sector. In 2014, Nair became part of Ekta Kapoor’s Balaji Telefilms, a company that he had given break while in Star TV. He joined as group CEO and expanded Balaji’s digital business. In a recent development, just before Balaji and Reliance Industries announced that the latter has taken an equity stake in BLT a shade less than 25 per cent, Nair announced his departure from BLT end July.
Nair was one of the speakers at indiantelevision.com’s second edition of Vidnet2017, held mid-July. He had a one-on-one conversation with Indiantelevision.com consulting editor Anjan Mitra. Edited excerpts from the conversation:
Has being in Balaji different from what you’ve been doing at Star and Imagine TV or even at a startup company?
First of all, I have been associated with Balaji for many years because we used to work with them in Star. Balaji is primarily a television production house and is one of the most successful television production houses in India. And, the plan with Balaji was that how do you take a business like this and scale it up. How do you grow 10x? For example, for a company that is already having eight to nine shows on air, we have 20 per cent market share in general entertainment Hindi fiction. We make some movies too. So how do you grow 10x? We can’t go from 8 shows to 80 shows. So the sense was we have to go from being a B2B business to being a B2C business, which is where this plan of creating a (digital) platform came up. Now, if you could take all the Balaji shows today and put it on one channel, then that one channel would become the #1 channel. But obviously that ship has sailed and we couldn’t have started one more GEC channel. So it became clear that we should go B2C and should go digital (OTT). We should create content for it and act on our key strength, which is content creation.
Which segment of the Balaji media business drives the revenues?
Currently, television, obviously. TV is our base business where all the money comes from. But the future will be the digital business, which is Alt Balaji that we launched on April 16, 2017. That’s where the future is.
How is Alt Balaji different?
Balaji is known for its daily soaps on TV…shows that have been extremely popular and also have been criticized (for regressive themes, at times). Alt Balaji is essentially everything that Balaji on TV is not! The kind of content that we get to create (for Alt) is stuff that’s not available on TV; that you don’t see on TV and is exclusive to a platform. And, it’s in the fiction space because that’s what we specialize in. This is a big market. We have chosen to be in the OTT SVOD space.
But critics say that the Indian digital realm is still more of traditional broadcasters, TV companies putting content available on linear or traditional television onto a digital platform. Do you agree with this line of thinking?
It’s true. It’s common sense. Whenever a new medium starts and it grows, it lives off content from an old medium. That’s the way it goes. When satellite TV started in India, it was living off the English language programming from the West. Then English language programming was dubbed into Hindi and finally original Hindi and regional language programming came. It’s a process of evolution. Logically, if you got to put the content out there into a new medium, by default, Star’s Hotstar would put its own TV shows. In fact, that drove a lot of the viewership (to the digital platform) to start with. But as it goes forward, if you can get content everywhere, then why would you pay for it? If you actually want people to pay for anything, then it (content) has to be good and exclusive and people must see value in it.
You mean content that you once famously described “between Narcos and Naagin”. Has that median changed or are you still grappling to traverse that terrain?
In India in the 2000 (decade), we did the ‘K’ soaps --- `Kyunki’, `Kahaani Ghar…’, etc. In 2017, that is pretty much the staple on Indian television, almost after a generation has gone. So, what we have missed as an evolutionary step is premium subscription television --- the likes of HBO and Showtime. The closest India came to premium subscription television was, may be, Star One. So that’s where the opportunity is. The need (today) is the world between `Narcos’ and `Naagin’. It’s a world between a Colors Infinity and Colors --- in all languages, not just in Hindi. And, that’s what we (at Balaji) are going after.
I was reading an interview of Reed Hastings where he said that new shows, especially when they are released, do affect the seasonality of the business and the bottomlines. Do you feel in India it is still the same story or India is still an evolving drama?
Even if you look at the TV business, the content business tends to work like that. So, in the Diwali quarter, your spends are up and your revenues too go up. However, I think, the big difference between Netflix and traditional content houses is if you have a subscriber model, then you have a basket of programming for a basket of revenue.
Would you like to share some of the numbers?
I am not going to share the numbers, but I can tell you what we are doing and why we think what we are doing makes sense.
Why are you shying away from numbers?
I am going to come to that. I got to build up to it. What we are doing is we are creating fiction shows--- 10 to 12 or 15 episodes in a series and with multiple seasons going forward. We will give five episodes free. So we don’t have a one-month free scheme. What we have is every series of ours is free for the first five episodes --- three episodes you can see on YouTube, two you can see on the app and then it means you have liked it; which means you are hooked on to it. We are going to ask you for some (subscription) money then. That’s the play we are aiming at. There are some things you want to pay money for and some you would not. For a movie like `Dangal’, a big section of the audience in India gave Aamir Khan Rs 300-400 crore (Rs. 3-4 billion in ticket sales) despite being aware that the film would come on TV for free technically, in a few months (of its theatrical release). But they still thronged the theatres and bought tickets. There is a draw that (good) content has…where people want to pay and see it. Our sense is to create content that people would want to watch and pay for.
Coming back to numbers, we have got a great start. We have got about four-five million downloads. We have got subscriptions from day one, primarily because we are in five-episode free model. I can’t give you subscription numbers, but we are doing well compared to the market now. We have got subscriptions from about 70 countries. Most people have taken the quarterly pack and not the annual pack, which is fair I guess. They may first want to sample the content and see how the service is. We have got good reaction to our content.
People who have downloaded your app are mostly of the Indian diaspora?
Indians mostly. It’s an Indian and Indian diaspora game. It’s all in Hindi for now. We have done one Tamil show and are going to do one Bengali show. But it’s targeted towards Indians primarily. So we are not yet in the foreign (audience and non-Hindi speaking) space.
What are the expansion plans for Alt Balaji?
For first couple of years, we are going to focus on content, build up customer base and do content in multiple languages. We are doing content in Hindi, Tamil and Bengali. We want to add Gujarati, Punjabi and Telugu too, which we are planning to launch within 18 months time.
The sense that I get from feedback that even the big OTT players don’t know where the revenue is going to come from in India. What is Alt Balaji’s point of view on revenues and business model, considering you are quite a late entrant?
We are looking at the revenue from a subscription point of view and we are not in the AVOD space. We are not looking for advertising support. Within the SVOD space, our business plan is to spend some amount of money on content and getting to a certain number of paying subscribers by the end of two to three years, which takes us to break-even. That’s the plan. And, for that, the kind of content we are creating is premium subscription television content --- the kind India has not seen so far. We are putting it out there (and) giving consumers the opportunity to sample it. We think the market is pretty large. There are two million homes that are watching Star World or Colors Infinity and there are 165 million (TV) homes that actually a Colors or a Star Plus reaches. The in-between audience, say about 25-30 million homes, today are already spending Rs.1000 to Rs. 2000 on a combination of Internet, entertainment and telecom (per month). They have two-three smartphones, have a DTH connection and watch one or two movies in a month. These guys will potentially spend $10 more per month in the next five years. That figure when you take to 25 million homes becomes a $3 million market. Now, what will they spend it on? They will spend it on OTT services, watching new movies. So, we are focusing on those 25 million homes, which will, in the next five years, probably become 25-40 million homes. Out of that, we want a fair share.
By 2019-2020 you will reach the breakeven point. So, where are the stumbling blocks? Which are the three biggest stumbling blocks for digital platforms in India?
One of the big stumbling blocks used to be the connectivity issue. We used to wonder how this is going to work and how would we reach the consumers. Call-drops and bad connectivity is a problem. But in the last year or so, with the kind of push Jio is doing, the (digital) highways are being built. Second big stumbling block would be, would people pay? We keep saying that Indians get everything for free and that’s like a constant refrain. But ideally you pay for everything. You get nothing for free. If you go to a temple, you got to put money in the pooja thaali for blessings. So, I think people will pay. They are paying for movies, IPL matches…In fact, people have always paid for TV. For all this drama around ‘Indians like to get everything for free’, ever tried to not pay for your cable connection? They’ll (LCOs) just cut it (connection) off. Right? And, from 1992 this is going on. The third stumbling block would be if consumers are willing to pay, what are they going to pay for? That’s where the content comes in. Already, almost all of us have become Netflix subscribers. It may be expensive, but for a certain set of audience it is good to go. Amazon has come along too. So, these are the three key things and they are being addressed.
In all this, do you feel somewhere the government can be helpful in removing the stumbling blocks?
I don’t know actually. But government should stay far away from it. This is going reasonably well. Private players are helping in building infrastructure and are building businesses. Let market forces decide.
At the moment, it is almost like ‘free for all’ without any regulations for the digital players; something like what cable and satellite TV was once upon a time before MIB and TRAI waded into it in 2003-04 onwards. How do you view the growth of the digital world vis-a-vis regulations or its absence?
This is a tough one because the Internet is open; so technically at this point of time you can go out on the net and find porn too. Now going forward, more and more people will create (digital) content and somebody will push the boundaries and maybe or maybe not the government decides to regulate it. Ideally, if the players together are not creating obscene content just for the sake of creating obscene content, that would be the best self-regulated environment. But it is a big a market; too many content creators are out there and it’s hard to assume things. But I feel there are already some rules and regulations in place.
And where do the OTT platforms fit into the Indian debate of net neutrality?
Obviously, there should be net neutrality. I think all the OTT platforms are now pushing for net neutrality. If we don’t have net neutrality, then it would be like the TV business’ carriage phase, which still persists, though it has gone down because of the digitization.
Is the digital world at the moment a content driven business or a technology driven business?
Well, it’s a combination of both. Tech is equally important.