Sports television is a game of acquisitions

An alumnus of IIM Bangalore, it’s his first encounter with television in his 24 years of career in fields spanning FMCG, telecom, and broadband. He oozes zeal, sharpness and conviction as he talks about the initial challenges in the medium and the way forward for the sports television company he heads.

In an interview with Prajjal Saha and Sapna Nair of agencyfaqs!, Shashi Kalathil, chief executive, Neo Sports, reveals the nuances about being on the other side of the fence, being in a new medium altogether and the religion avidly worshipped by Indians – cricket.

Edited Excerpts

Frankly, I find no difference in the marketing function of the two. I believe marketing is all about building a bridge between the customer or the consumer and the brand – be it FMCG, telecom, broadband or television. One needs to get into the customers’ shoes and interpret things in their way, catch the dynamics and parley it in a manner that it makes business sense to your brand.

But the nature of your contact with these consumers is very different in each sector. In the telecom industry, one has a direct contact with each customer. For instance, in this sector, it’s possible to know each customer by his name, and also where to reach him. So to that extent, they are different.

However, the decision making is similar in all categories. Everyone needs to find the best credible, relevant and interesting way to communicate with the customer.

About television viewers, today, there is a lot of data to gauge viewership. There is the TAM data –though a few people might crib about it – which is undoubtedly one of the largest systems in the world. I think there needs to be proper utilisation of the data, and we need to extract meaningful information from it. That is the essence of great marketing, which is no different from the marketing in any sector. It’s all about understanding customer needs and desires and finding the best way to fulfill it.

The medium of communication is also different though and so is the nature of product. Different levels of marketing interface need to be employed at various points.

With respect to television, one thing which is very clear is that there’s nothing called ‘channel loyalty’. I am relatively new in this side of the business and this is just the initial learning that is getting formed.

But there are certain expectations from each channel, be it its production style or quality of programming. For instance, if it’s an Endemol production, people expect a certain quality of end product.

But the expectations do not engender loyalty. Loyalty is dependent on a bunch of environment dynamics, which is extremely complex. So you are literally living by the day or living by the property. So that’s becoming clearer to me.

I think the nature of branding, if you look at it from the marketers’ perspective, is somewhat different.

I will say that as long as people watch cricket, channels will continue to telecast it. In fact, cricket is like ‘dal-chawal’ to Indians. Very often, in lots of areas, consumers tend to think in one dimension. I am not saying it’s right or wrong but it is a fact. In India, the nature of our interaction with sports, in terms of mass viewership and the kind of commercialisation, has a complex sociological context to it. That is the reality.

And I also don’t think it’s a question of survival. If there are 30-40 million viewers, glued to the idiot box for six hours, and people lining up in front of stadium in 40 degree Celsius temperature, any marketer will kill for that kind of brand preference. I think it’s great that there’s huge passion for the game of cricket. And that passion is not predicated around whether a person has played the game, or whether the person understands the game.

As I simplistically see it, there are four levels of cricket viewing. There’s one core bunch of people who play/have played the game seriously enough. The second level of viewers is people who over a period of time begin to understand the nuances of the game. A third level of viewers comprises those who have socially got interested in the game, because every one else is watching. Then there’s the fourth level, which is social viewing, where people just get together to watch it. Between the third and the fourth comes the ‘Mandira Bedi’ kind of stuff.

It is true that there is too much dependence on cricket. But that’s the reality of this genre. Let’s face the truth that there’s this game called cricket which is a religion in this country. Anything that has happened in the evolution of cricket has got embedded in the psyche of not only the male Indian viewer but also the across all kinds of demographics.

But then having bagged the BCCI rights for the next four years doesn’t mean that we can sit on our hands. Neo Sports Broadcast is not looking at a four-year horizon only. It is going to stay for a much longer time.

One has to develop the skill and the confidence to be able to round off the sharp edges and reduce the dependence on cricket alone. We have developed that skill. Nimbus is making efforts to acquire rights not just for cricket but across other sports genres. In fact, we will de-risk whatever is a challenging business model.

We strongly believe that it’s our job to give the consumer what he/she wants. It’s not for me to tell them to pick up a stick and start playing hockey. We believe that the audience composition and dynamics keep changing and so does the way people interact with sports keep changing.

We are fully aware that no sports fan is loyal to the channel. His loyalty is more towards the game, the players or at times even to the region or team he represents.

Ya, I agree that it does happen. But again this is quite a short-lived phase. If the Indian team underperforms in one or two matches, there is a slight marginal decline in viewership. However, as soon as India wins a match, the viewership regains its momentum. And interestingly this momentum continues for the few subsequent matches, even if the team falters again.

And the best part is that the Indian team always manages to win one in every five or six matches. Had the Indian team performed abysmally constantly, there could be a decline in viewership or loss of interest in the game. But the truth is that it never happens.

A sports channel’s viewership is strongly polarised in nature, and that’s because of cricket, which itself has a polarised viewership.

For instance, in a five-day cricket test match, one wouldn’t expect the same kind of viewership throughout. Rather, it will get a maximum viewership if the match is on a deciding level, and that too on weekends. This is one end of the viewership. At the other end, the viewership could be normal.

Similarly, for a sports channel, when cricket is on, the viewership is maximum and during the rest of the days it is simplistically dichotomous, which probably could deliver TVRs even below one.

Therefore, a sports channel needs to find a balance between these two extremes. And if one finds a neat business proposition going, there is huge opportunity to be exploited because sports viewership in India is still very un-evolved.

In most developed countries, there are around four-five sports genres which are viewed regularly. But in India, there is only one popular sport.

Having said that, there are also other opportunities within and beyond cricket, which are still waiting to be explored. For instance, we also have 130 days of decent domestic cricket calendar in India, which is completely under utilised today. But then the way of presenting domestic cricket needs to undergo a radical change. We believe that live cricket of a reasonably good standard, if packaged well, will sell in India.

For instance, 30 years back, I used to read about Ranji Trophy matches very avidly in the newspapers. But that has changed now since television coverage started. There’s a huge difference between cricket now and then. It’s obvious that if domestic cricket is presented in the same old format, people will not watch.

At Neo Sports, we plan to bring a certain quality of cricket, which will be packaged and presented well. We are also ready to spend on the marketing of the same. Then within cricket, there is also non-India international cricket which does well, and we will look forward to that.

To be precise, we will go where the viewership is. We strongly believe in the philosophy that the moment the marketer thinks he can play ‘god’, the words reverse and ‘god’ becomes ‘dog’. So I can’t say that I will engender viewership of a certain kind. If tomorrow viewers want to watch crab wrestling, we might get that for them.

And it’s not that the Indian sports fans are completely oblivious to other games or good sports. The way Indians have consumed FIFA World Cup, without India in it, is completely different. This substantiates the fact that there is opportunity in other sports genres that can be exploited.

As our country develops, we will start having disposable income, infrastructure and resources to develop sports. Then we will surely witness a change.

I don’t know. We have been debating that internally. Currently we have a national footprint, so we can’t think about creating local properties.

There are a few concerns attached to it. At present we do not have the scale to operate or employ people at a local level to create such properties. So this doesn’t make a sensible business model for us as of now. Today our channel is not structured to plunge into that kind of a venture. But I do agree that there is huge opportunity lying there as well.

If one picks stuff thinking that there’s an opportunity there, then one has to be savvy enough to figure out if it’s a long-term or short-term opportunity and make it work. It’s a bit of something you take from the market and some stuff you give to the market.

We are looking at all kinds of stuff. We are looking at different kind of properties on cricket itself, apart from other games, which may have never been played in India. There’s an evolving social dynamics that you have to catch.

Yes, we plan to come up with a new channel, which will be on sports news. The observation is that the amount of time dedicated to sports on a news channel today is massive. And with our area of competence, which is sports, we can possibly do a better job than the news channels in this arena.

No, cricket is not bound by language. This is why we say that even Bollywood is less mass than cricket because there’s a language issue there.

But this strategy has come from my experience in PepsiCo. My big frustration then was that Pepsi ads for all regions had to be in Hindi during cricket matches.

I would have killed for a great cricket ad with Sachin Tendulkar talking in Marathi in Mumbai, Saurav Ganguly speaking in Bengali in Kolkata, which can now be possible through these regional feeds. So this strategy overcomes advertiser’s limitations.

And also from viewers’ perspective, the interaction with the game is much more when it’s happening in a language he is used to.

In fact, thanks to the technology, economically it makes a lot of sense today. In the future, technology may even allow us to create a visual feed, in an economical way, which will open up further avenues.

And lastly, if one observes the viewership statistics, almost 50 per cent of cable and satellite penetration comes from the four south Indian states. On the contrary, only 25 per cent of cricket viewership comes from the south Indian states. The regional feeds in these states will help us exploit the market to its maximum, and advertisers are just clamouring for it.

Among other things, yes, we plan to create local heroes, especially for cricket. We intend to project young players in a way they used to be promoted in old times. These local heroes will fuel the growth of viewership for domestic cricket matches as it will involve viewers more with the game, and in turn generate revenue for the channel.

That I am not very sure of. Because if you go to the media planners, and tell them that I want advertising which eschews cricket, they will come up with a very nifty media plan which may not even have the letter ‘c’ in it. It’s more a question of scale. There are people who will invest in a reality show or some other show, while there are others who will say that I cannot invest at a rate more than Rs 1,000 per 10 seconds. There’s enough programming available in India at that rate. One has to see whether that fits the brand and gets benefits or not. Pepsi spends crores of rupees on cricket because it gets benefits.

I think Indian society changed in the early ’80s when we hosted the Asian Games. I have personally witnessed the change. New Delhi as a city changed completely, post Asian Games. It changed the way a lot of people in the country looked at sports. We are thinking about it again.

About Commonwealth Games, specifically, I can’t predict because I am not a philosophical stargazer. I would love to have a country which was riveted by five sports genres. But that’s not the reality.

However, if you ask me whether big sporting events such as Olympics or Commonwealth Games will decide the fate of sports channels in India, regrettably the answer is no, but sports certainly will.

I think there’s a lot of sports related viewership which is waiting to be exploited. The way an entertainment channel uses programming is not the way a sports channel does. Hence there’s a lesson to be learnt.

If you think sports programming is bringing in the rules, the techniques and the thought processes that an entertainment channel brings, then there may be a paradigm shift waiting to happen. Traditionally, sports have been perceived as a live event that is perishable. We will make that live event a wonderfully presented programme. We will go in-depth and leverage the existing properties rather than widening our focus.

Entertainment channel programming is serialised; each episode has a connection with the previous or the next episode. We need to figure out whether we can bring a little bit of one into the other. Reality shows have a little bit of sports coming into entertainment. There can be a reverse process too.

Today, it is the ability to acquire, undoubtedly. It’s a tough and high order skill. It requires a good perspective of the market, of numbers and the financial engineering. Successful organizations or people are those who do the most difficult things best. Nimbus has been very strong in sports production. It’s a skill that we have mastered.

The sport channel genre has increased fourfold in the last three years. It’s on a trajectory which is fantastically sharp. It will be better if there are exciting things on weekends. For instance, the FIFA match was timed brilliantly – day parts and week parts. BCCI is beginning to do it like that. There are lots of Sunday games coming up.

But cricket is a six-seven hours game, it’s time consuming. There is possibility of office viewership, going by the kind of connectivity we have. You can also give people a snippet of the game in a fashion that it’s not distracting. It could be via mobile, web, etc. We are looking at various platforms. And if we can leverage these platforms we can cater to some of the niche audience. All these could lead to growth in the genre on the whole.

When things are not fully disclosed, may be that makes it seem controversial. But believe me, nothing is controversial. And I am not saying that because we have bagged the telecast rights. Rather, it is the bidding process that is increasingly becoming more and more transparent. You can call it controversial only if I bid lower than somebody and still get the rights. Such a thing hasn’t happened since a long time in India.

The controversies and court cases around BCCI rights, which you are referring to, had happened not due lack of transparency but due to lack of clarity, where the decision maker wanted to exercise his right of taking the decision.

Internationally, the bidding process is far more complex but done elegantly and transparently. In India, we are just reaching to that level of sophistication.

To avoid this, one needs to reduce the bidding process into virtually a zero decision making process, making it a single dimensional tender or a lottery where there’s very little flex left to the decision maker, which I think has its negatives also. Because then you are equating everybody to the size of their computed bank balance. Then you move it to the next stage, where you say that you want to retain certain decision making powers, but I will decide whether X is better than Y, based on well laid out fundamentals.

To start with, one shouldn’t disclose everything, because it is inconvenient and is administratively difficult that makes the bid a very uni-dimensional process. And that, if not handled well, tends to result in so-called controversies.