Subrata Roy fulfils his dream of owning a channel. But can he turn around the troubled Home TV?
After a year-and-a-half of embarrassingly low viewership figures and negligible advertising revenues, one would expect Mohan Bharara, head of marketing, sales, programming and distribution of Home TV, to be in despair. But at Home TVs New Delhi headquarters, Bharara is a picture of confidence. Home TV is in the take-off stage, he says. At first look, that is an extraordinary claim for a channel which has for some time appeared on the verge of winding up. Home TV downed shutters in Mumbai in September 1996, and issued marching orders to 120-odd staffers in Delhi and Mumbai. It lost its star programming director Karan Thapar in May and has been without a chief executive for six months which explains why Bharara has been forced to don several caps at once.
But just when all seemed lost for Home TV and rumours of shareholders Pearson and Carlton walking out of the venture became rife, a saviour arrived in the shape of Subrata Roy, promoter of the Rs 6,000-crore Sahara group. Sahara has signed an MoU with Home TV to pick up 51 per cent equity in the broadcast venture. We have already started chanting Good Sahara, chuckles a Home TV employee. (Good Sahara is how all Sahara employees greet each other.)
Says a source in Sahara: At a time when the industry is caught in recession and is cutting costs, we are looking at acquisitions. The focus is on deriving synergies from our existing businesses. We are merging our newspaper, magazine and television businesses to form a potent mass communication force in the country. Media analyst Iqbal Malhotra of AIM Television says: This is a good thing for Home TV. Besides the money, Home TV will get Saharas infrastructure in TV software.
The Sahara group, currently in its 20th year, has interests in airlines, para-banking and real estate, besides media. It publishes an English newsmagazine, Rashtriya Sahara and a Hindi daily of the same name, which has a readership of over 1.5 lakh in and around Uttar Pradesh. Sahara has an upmarket audio and video studio in Mumbai which is in the equipment rental business. In fact, Home TV had its first brush with Sahara when the latter leased out its studios to the channel for the production of a prime time variety programme last year.
Like everything else about Subrata Roy, his foray into the electronic media has raised eyebrows and invited several theories from the industry. For Sahara, media is all about money and clout. And with elections round the corner, the timing couldnt have been better, says an analyst. According to others, owning and running a television channel has been Roys dream for long. His role model, according to them, is Zee TVs Subhash Chandra and he believes that there is room enough for two media barons in Hindi language channels. We have entered this business knowing that it is capital intensive and has a long gestation period. Besides, Home TV has a respectable brand equity, says a source. Reports about the Sahara groups overtures to another channel, ATN, and the beleaguered Amitabh Bachchan Corporation Ltd have surfaced time and again, all of which have been furiously denied by the group. Says a source, These are all concocted stories. One cannot put an end to this sort of speculation.
But with Sahara finally jumping onto the satellite TV bandwagon, the question now is: can it succeed where five mighty media and financial conglomerates Hindustan Times, Carlton, Pearson, Schroders and TVB failed miserably? Home TV, run by TV India Ltd (TVIL), came in with an enviable shareholding pattern: the only Indian partner, Hindustan Times TV, owns 30 per cent, merchant banker Schroders holds 25 per cent, while international media groups, Carlton (a London-based television broadcaster), Pearson (publisher of The Financial Times and The Economist and a shareholder in Madame Tussauds wax museum) and TVB (a software producer and broadcaster in Hong Kong and Taiwan) own 15 per cent each. They were committed to investing a total of $45 million in the project.
Conventional wisdom says that the Sahara group is facing an uphill task. The way I understand the market, there is no place for a third channel after Zee and Sony. Home TV could have been number two, but it has missed the opportunity, says media analyst Siddhartha Ray of the SPA group. Statistics support this argument. Home TV earned Rs 7 crore in ad revenue in 1996-97, which is Rs 43 crore less than it had set out to earn that year and Rs 73 crore less than any satellite channel showing 8 hours of original programming and 16 hours of repeat programming a day requires to break even. Viewership figures offer part of the explanation. According to IMRB Peoplemeter, last week Home TV had a cable and satellite (C&S;) audience share of just 2.2 per cent behind Zee TVs 5.1 per cent and Sony Entertainment Televisions 2.9 per cent. Home TV had a cumulative reach of only 19 per cent in C&S; homes once again a poor third to Zees 32 per cent and Sonys 30 per cent.
Bharara says all this is about to change. Till recently, fragmentation of audiences was not taking place. Now, people are more open to utilisation of choice, and the number of trigger happy people is going up. But it would take more than a trigger happy audience to haul Home TV out of its troubles. The channel was troubled from the start. It was launched in April 1996, a year behind schedule because of the unavailability of the PANAMSAT transponder. Sony Entertainment Television, meanwhile, jumped into the fray in September 1995 and got a headstart over Home TV. Internal struggles in TVIL worsened matters. Sources say that chief executive Pradeep Chanda and Karan Thapar could not see eye-to-eye on the brand image of the channel. While Chanda was driven by commercial considerations and was not opposed to telecasting Hindi films and film-based shows, Thapar wanted to establish a niche in the genre of programming that Star and DD-III are known for. We opted for intellectual entertainment which takes longer to establish brand equity and earn ad revenues, says Chanda.
Within the first few months, the channel was struggling under huge cost overruns. It kicked off ambitious projects such as the UTV-produced daily soap opera Trikal, at the cost of almost Rs 50 lakh a month. It was an expensive programme which did not have the kind of impact that several cheaper serials such as Zees Tara and Campus have, says Malhotra. The serial did not do well because the market was not ready for a daily evening soap. But most important, a serial can do only as well as the channel, says a former senior executive at Home TV. Sources say that shows such as Lifestyle, Horn Please, OK? too were produced at unviable costs.
Our spending on programming now is one-third of what it used to be in the last few months. We have also become more focused. Earlier, it was a catch-all situation; now, we are concentrating on the 15-45 age group, says Bharara. He adds that once Sahara takes over, new programmes would be introduced and by May next, all the new programming will be in place.
Meanwhile, nobody is saying what the new shareholding pattern would be after the equity transaction. Would the entry of a sixth shareholder mean the exit of some of the existing ones? You must be kidding. We have a major interest in the business, says Deepak Verma, director, projects and planning of the Hindustan Times Group. Analysts predict that Carlton and Pearson could opt out and Hindustan Times will offload a substantial part of its stake. I will be able to tell you something definite next month, says Bharara.
At Sahara, Roy and his team are busy drawing up ambitious plans for Home TV. The Sahara group is a success story. We become number one in every business we step into. Television will be no exception, say company insiders.
