IAA’s Knowledge Series on the theme ‘Reshaping Markets Through Disruption’ was hosted on 16 September 2016 in Mumbai.
The session featured Raghav Bahl, founder of Quintillion Media, and Ronnie Screwvala, founder UTV Group, Unilazer Ventures and Swades Foundation. With a sub-theme of ‘If I had to do it again’, the chat was moderated by Mini Menon, co-founder and editor, Indy Network.
The session began with the moderator referring to Bahl’s latest entrepreneurial venture, The Quint, and asked him the difference between now and setting it up his first venture, TV18.
Using a cricketing analogy, Bahl said, “It’s like the second innings of a Test match. When you play the second innings of a Test match, what plays on the mind of a captain is whether you have played well, whether you have the lead and stuff like that. You’re not starting from ground zero. You also know in your team which guys have done a bit of spot fixing, which guys are genuine team mates. You also know the pitch conditions. You’ve batted well and realised whether the ball is spinning or not. So you actually know a lot about your team, conditions and the status of the lead. But then the second innings is on the third or fourth day of a Test match. You’ve to set up a target. You’re a little tired. You don’t know how much time you have. In the first innings you know it’s a five-day match and there’s time on hand. Second innings are wonderful and rejuvenating. All the constraints of the first innings are not constraints anymore – capital is not that much of a constraint. What is a constraint is do I have the energy and time to do it again.”
Menon then asked Bahl about the motivation, considering he’s made a lot of money already.
Bahl responded, “The standard answer to this would have been money isn’t everything. But, money is everything! You do want to earn much more. I’m not a dollar billionaire. It’s good to be a dollar billionaire. A rupee billionaire is a one-sixtieth of the dollar billionaire. Money is always a motivating factor.”
Screwvala said, “From a motivation point of view, I don’t look at it in a ‘Do it again’ context. It’s more about an on-going journey. As we mature, different priorities come in life and you take them on as you go forward. I’ve stepped out of media and entertainment for five years. People have asked me whether I miss it, and I say I don’t miss the industry, but I miss the people.”
The moderator interjected to say that if the duo had non-compete clauses, those should have ended sometime this year. Bahl said that he didn’t have that clause when he exited Network18.
She then asked Screwvala whether he’s looking to get back into the movie making business, because that brought out the best of him, according to her.
“I think when we morphed from a B2B to B2C model, outside of broadcasting, perhaps movies were the big things out there. But, I’m not going to answer your question about the non-compete clause. Right now, the exciting stuff is non-media related. If I did that because of a non-compete, then I have it to thank, but instinctively my first thought process was to work with a completely different set of people so that I learn much more in the way I want to progress and that’s how it worked for me,” said Screwvala.
In the context of big studios and budgets, Menon questioned what the model of foraying into movies would be, should he choose to re-enter.
Screwvala said, “Footfalls have increased, people are watching more of it, but not because they’re paying for it. We keep talking about the industry being a 100-billion dollar industry in conferences. We’ve been saying this even 10 years ago.”
Bahl said, “We signed on at astronomical prices. The cost structure of that industry broke. Any industry that sees star talent get 50 per cent of the revenues (not profit) of the film, will never make money. Unless these things get fixed, studio after studio will get out of business. You have to get into the creative and control it. But, the studio (acquisiton) model in which you say, ‘Yes I’ll buy this film for ‘x’ and leave 50 per cent of the IPRs with the producer, give 30 per cent of the revenue to the star after paying him Rs 25-30 crores’, can’t work.”
Screwvala compared the current movie production ecosystem to the VC/private equity situation in other industries.
“It’s going through the same situation. Founders don’t know what to do with the money,” he said.
He added, “I don’t think it is doom and gloom. It’s a correction model. It happens once in ten years. It’s a fallacy to believe that it should have never happened. You need some of those excessives sometimes. It’s like saying today in retrospective there is no impact in the mass advertising the e-commerce players do. But my question is that if they hadn’t advertised the amount they did, would we have had that many people buying online. They created a market.”
‘You can’t reinvent the model’
The moderator moved the discussion away from movies to the space Bahl operates in currently. Saying that even ‘brokerage houses have digital channels’, she asked him about the ‘disruption’ he plans to create in the space with Quint.
Bahl said, “I don’t think you can reinvent the model. You just have to look at the content.”
He pointed out that CNBC TV18 had grown from a turnover of Rs 5 to 6 crore in the late ’90s when it was launched, to about Rs 400 crore presently. He guesstimated that with ET Now’s at around Rs 100 crores, the total size of the market was Rs 550 crore, thanks to growth in the last 15 years. Yet he pointed out that the equity investor population was no more than 3 to 4 per cent.
“The law of economics in India is that we are late adopters. We are late adopters in any game. The USP has to be better content. Yes, you can do a little more on digital, but then the other brand will also do it. We have MoneyControl that became a huge property, and that was disruption. But, at the end of the day it has to be about content. You have to be independent. The editorial issues you will take up will be edgier, bolder and independent,” he said.
Bahl added, “It’s not about reinventing the wheel; it’s about making it sturdier.”
Menon referred to an incident from 2007 – UTV Bloomberg had released a full-page ad in The Economic Times about its ratings.
Screwvala recounted, “Raghav built a much much larger media enterprise than we did. Our paths really crossed where we started this small little media channel which was then called Bloomberg UTV. One fine day, for a day our ratings were better than CNBC’s, and we put up an ad. That got everyone’s goat. The next day my UTV ticker from CNBC went down. I’ve not got clarification from Raghav yet, so I thought I’ll bring it up.”
Bahl responded, “On the day they went ahead and put up this ad, Udayan (Mukherjee) was anchoring in the morning. He doesn’t take criticism too easily. He used a pretty strong word. UTV got pretty upset with that and sent us a legal notice.”
Thanks to the anchor not mentioning the name of the competing channel, Bahl explained, the situation was brought under control.
Towards the end, Menon probed the veterans on gutsy decisions in their careers.
“I’ve done foolish things, not the gutsier things. There were two bets we took nicely. We took CNN IBN nicely when we came in as a number two player and took number one quickly. Colors is one dream case study, where everything came right. If I had to do this again, I would do this much more calibrated,” revealed Bahl.