Viacom18's digital business will be profitable in 3-5 years, says Group CEO Sudhanshu Vats

Ten years is a long period in the lifetime of a broadcast company, especially at a time when Netflix and Amazon Prime are changing the rules of business. BestMediaInfo.com caught up with Sudhanshu Vats, Group CEO, Viacom18, to talk about the channel's decade-long journey and its future outlook.

Vats, an advertising veteran who's been in the broadcast industry for barely five years, feels that though the consumption of content is moving from the TV screen to the mobile screen, the broadcast sector is still the sunshine industry.

The CEO of the Rs 3,100-crore broadcast company talks about his plans to monetise the OTT, which he thinks will be profitable in the next three to five years, expanding the film and the regional content play and his experience of being on BARC board and why return path data would be a more credible TV viewership measurement currency.

Chairing the BARC board for nearly a year now, he gives a thumbs-up to the new measurement system. He said, “It measures what India watches. It has gone much deeper, measuring rural and regional (especially Southern region) much better. The earlier system had more urban and more Hindi belt bias. I think that has all gone.”

Though, as a broadcaster, he wishes that niche channels are better represented and measured.

Asked why channel hasn't invested in sports broadcasting, Vats said, "Sports for India is largely cricket and cricket is a very high investment, long gestation game." He said the group was looking to acquire and launch more regional channels.

Excerpts:

Viacom18 just completed a decade of existence. What has been the important learning?

To me, the learning is – what works best is a great team and we have a passionate team. Second, we were able to build strong brands and the third important learning is that we have been able to build a portfolio of businesses within Viacom18, portfolio of genres within businesses and portfolio of products within genres.

In a tough year like this, our film business is doing very well. Our growth this year has come largely from our film business. We launched digital last year and that’s a future business that we are building right now.

How much credit would you give to your association with brand Viacom and in what ways is it going to help the company in future?

What works most is not necessarily a brand name. It’s about how people come together, it’s about the culture and it’s about the enterprise. It’s about innovation and how people do things.

Five years in media after two decades in FMCG – how different has the journey been and did the media experience live up to your expectations?

I love the industry and that’s why I am here. It’s a fantastic place to be in. The dynamism and energy of the industry is superb. There are a lot of youngsters. It is a future industry – a clear sun-rise industry. The kind of disruption and changes that are happening are outstanding.

Viacom18 has launched/ acquired channels in almost all major regional markets. Do you see regional as a big opportunity?

We have decided to launch Colors Tamil in February 2018. We will continue to widen and deepen our presence in regional. We will continue to explore new regions and we will enter at an appropriate time – either organic/ inorganic, depending on the opportunity we get.

Is Viacom18 planning to venture into sports broadcast?

This question (about sports) is asked to me very often. As of now, we are not really interested in getting into sports. Mainly because sports for India is largely cricket and cricket is a very high investment, long gestation game. We have a lot of other opportunities for investment, since we are a full-play young media company. That’s the way I would take it.

Do you see BARC the same way from two different lenses – as a Chairman and as a broadcaster?

When I wear the hat of BARC Chairman, I must say it has made a considerable progress. It has gone much deeper, measuring rural and regional (especially Southern region) much better. The earlier system had more urban and more Hindi belt bias ratings.

I think the fidelity of the system is extremely high. Which means that any event is picked up and ratings are high and it is picked up very well – be it a show launch, or a channel launch, or an event like Dr Kalam’s demise or Jayalalitha passing away or floods. All of that is captured very well. I think it’s a good system, though the measurement of niche channels is an area that can be improved further and there is work in progress. Increasing the sample size and looking at return path data (RPD) would be good steps.

As a marketer turned media executive, you have seen both sides of the coin. What would you say about the continuous restraint by advertisers to shift from CPRP to CPT buying model? In fact, HUL is said to be reporting globally on CPT despite buying on CPRP basis.

That is for them to answer.

I think buying on CPM or looking at a more universal currency is a better idea, because that’s how currency is used globally. Also, once we start measuring total audience – audience on TV and digital – it’s important that we have a common currency. I am sure advertisers will look into that. It’s difficult for me to say if it will happen in five years or so, it may happen earlier than that. You never know. I think we have to keep working.

When do you expect your digital business to break even and turn profitable?

I think all businesses have to run on the fundamental principles of profitability. As of now, investments are being made in digital. But I am confident that in three to five years, we will find a business model which will make this business profitable as well. The good news is that advertising is growing and another good news is that as you have enough A-ward subscribers of advertising-led VOD, if you look at the China model, after a growth in the advertising-led VOD, automatically, you will get subscription-led VOD. Then you have a lot of people behind the paywall.

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