CEO, domestic broadcast business, Zee Entertainment Enterprises
Last summer, ZEEL (Zee Entertainment Enterprises) changed its organisational structure. Five verticals were formed: domestic broadcast, international business, live events, films and digital. The Subhash Chandra led media giant announced that each vertical will have a head, who will report to Punit Goenka, managing director and chief executive officer, ZEEL.
Soon after that, Punit Misra, a HUL hand was appointed as chief executive officer of the domestic broadcast business of the company.
Misra joined HUL in 1996 and over the years, worked on several categories including ice cream and skin cleansing (soaps). His most recent position at HUL was executive director and vice-president, customer development. We interviewed him about the lessons from the past, present day challenges and goals for the future.
HUL to Zee - what made you veer towards the broadcast industry after spending 20 years at an FMCG company?
When you take a call like that, you do so with due consideration. What will I get to do when I join the group? That was important. The broadcast industry is growing. People ask me about the issues and challenges, but I see only opportunities in the broadcast industry. It plays a big role when you are making a decision like this. Secondly, ZEEL, as an organisation is entrepreneurial. Though it is a well-oiled machine, there are spaces and opportunities where you think you can add value.
You joined Zee around nine months back. How have these initial months been? Were you given a brief to help you focus on specifics?
I had no idea about the industry when I walked in last October. That happened to be a big 'plus', actually. You ask very basic questions. You see how best you can take lessons from your past experience and apply them in a very different context.
The brief, more or less, was: How do we make sure we continue to get fitter for growth in a changing environment? How do we grow the viewership share? How do we grow the revenue share? How do we drive value for the organisation?
Often, when senior leadership changes, there's a clear need gap that needs filling. In your case, is there a 'wrong' you are expected to right?
Approaching it like that in business is a problem, because in business, the fact is, if everything everyone did was right then all organisations and individuals would be great and all résumés would look fantastic. So I don't to look at business from the point of view of 'Yeh galat kiya...' It's important to not repeat mistakes, but I am perfectly okay with making them. Not making mistakes is actually a bigger problem.
Okay, to rephrase, what 'opportunities' need your immediate attention?
One is content: What can we do to enhance the quality of content? What does the consumer want to see? The second is: How do we make sure that in the next 10 years, the industry becomes stronger to pull in the brightest talent in the country? There is a strong need to build our own capabilities - consumer insights, data analytics, social listening - at the institutional, that is, organisational level. Then each vertical won't need to build these strengths individually.
ZEEL was an early mover in the digital space with DittoTV, but over the years, with the arrival of new players, somehow it has lagged behind...
We are in the process of strengthening and hitting the high notes. It's work-in-progress, so I won't talk much about it. Early entry and experiments have given us a lot of lessons and those lessons are helping us now. It is all a business of content; we do not see the digital business as any different from the TV business.
Speaking of digital, on one side we have subscription-based VOD platforms and on the other, there's YouTube - open and free. Then there are broadcasters armed with catch-up TV content on their own VOD platforms. What's the best revenue model here?
I don't see money getting made from digital anytime soon, globally. I'd be surprised if money is made from digital in the near future. A lot of people are probably betting big thinking about the future... but when it comes to the monetisation of it and the business models, there's still some distance to walk. Experiments need to be done, you need to get the equation right; currently, the equation is: 'Just get the eyeballs'. We don't know the economics of it yet. Those things are still evolving.
And how do marketers view the digital space? Of late, the spotlight is on accountability and return on digital investments...
See, today marketers are asking the question: By using digital communication, are we really doing stuff that's building the brand's strength over a long period of time? Fundamentally, digital gets used a lot for quick call-to-action, say, a promotion or some quick 'couponing'. You get a good response and you say it's effective. But is it leading to a better emotional connect between the brand and the consumer? That is what marketers are starting to wonder. If more and more money is moving into what you might call short term sales related stuff, am I losing out in the long run? That's what they want to know. TV will continue to be mainstream - there is no debate about it.
And on TV, do you see the regional space growing vis-à-vis Hindi, in terms of viewership and revenue?
Let's talk about viewership first. The Hindi to non-Hindi speaking split is 45:55. There's also a debate on what's 'Hindi' and what's 'non-Hindi', so let's presume it's even. So there's no difference between the viewers of one state from those in others, in terms of the fundamentals.
Over a period of time, viewership in the Hindi and non-Hindi genres should, logically, move in the direction of the constituents in terms of languages in the country. The challenge is giving people quality content in their preferred language. Growth in competition will lead to better quality content.
And... in the context of revenue?
The revenue part is a slightly different conversation. Broadcasters should look at revenue the same way advertisers do.
What does that mean, exactly?
Say, a car brand is getting great revenue from four states. The price they should be willing to pay for communication in those markets should be commensurate to the size of the profits they make there. If there's a dearth of both, media availability and money, where will they advertise? They'll spend where the opportunity is more.
However, in broadcast, the way media is bought and sold (at present) has nothing to do with the size of the market of different categories. As a newcomer in the industry, my take is - There should be value-based pricing. But that's not the case today. So, to answer your question, I don't see this 'equalisation' of revenue happening, though conceptually it should.
We see a dip in the time spent on Hindi GECs. Do you think this has something to do with the changes in BARC's universe?
The fact is, the total time spent on television has not dropped. It's Hindi GECs that have seen a drop and that's something which has happened at an industry level. I am sure everyone is looking to find a solution to it. Is that happening because of the expansion of (BARC's) universe? Or is FTA playing a vital role? We need to figure this out. Also, we need statisticians to tell us whether the expanding universe is reflecting viewership correctly. I am not very clear on this as yet. The question in - As we are expanding the universe, as we are putting more meters, as more rural representation is coming in, is the measurement reflecting reality or not?
Sure, but don't you think content can be a reason for the drop in viewership too?
In my opinion, we need to spend a lot more time figuring out a way to break out of the tyranny of sameness, something we see today. One thing works... it is repeated everywhere. We need to create more compelling content.
As a former advertiser, how do you process the difference between urban and rural viewers? How do marketers view the consumer pie today?
A large chunk of advertisers still look at the urban viewer as the 'monetisable viewer'. That, to my mind, is completely incorrect. The consumption (of categories) split between urban and rural, volume wise, is roughly 50-50. So in terms of the value of consumers, both are the same. As an advertiser, why pay less to reach out to the rural consumer versus an urban consumer? In fact, for most categories, growth is much higher in rural markets, so as an advertiser you should be willing to pay more for rural consumers. But that's not the reality. Revenue and pricing should be based on the value of consumers in a market, and not on the cost of creating content in that market.
Is re-running content on Free-To-Air channels, a good model?
In the longer term, FTA channels will pose a challenge to the industry. The way it exists today, while there are some positives - it's already monetised content, I incur no cost in airing it and I earn revenue in the process - it may impact the other part of the business. Then, where will the equation settle? I think this is something the industry should be concerned about. We need to understand the right way of doing this. Our approach is clear - we do not air a show on FTA till it's over on the pay channel. It's not necessarily what others are following, though.
How big a threat is English entertainment on digital to English entertainment on TV? Do you think it's possible for both to grow simultaneously?
The penetration of English as a language is still miniscule. It has a long way to go... the consumption of English content will grow, as more and more people learn the language. Imagine a scenario in which the English speaking population of the country becomes ten times what it is today, at par with what it is in many other countries. In the long run, I see both pipes (TV and digital) staying relevant. Even today, though the viewership share of English entertainment is only one percent (of total TV viewership), the revenue share for the same is three to four times more. So revenue will always stay ahead of viewership. The challenge is - how can we market it properly?
What are the areas you will focus on hereon?
Two areas: One is advertising-based revenue; we are seriously under indexed and it has to grow. The fact that advertising is growing at 12 percent in a country which is growing at seven percent is a great achievement in itself. So even if it continues to grow by 12 percent, it's incredible. The second is distribution-based revenue; currently, 70 percent of the revenue comes from advertising and 30 percent from distribution. There is no reason why it shouldn't be 50:50.
(This interview was first published in our magazine afaqs!Reporter on July 15, 2017)
A Note From the Editor
'Starting a new journey - from managing business of selling one kind of soap to another kind!' - This is the preamble to Punit Misra's LinkedIn profile, one dominated by senior roles within the Hindustan Unilever system.
After spending around two decades at HUL - he joined the company as a management trainee back in the mid-1990s and went on to handle several categories including the skin cleansing portfolio, which is where his soap pun comes from - Punit moved to Zee Entertainment Enterprises (ZEEL) around nine months back to take charge of the network's broadcasting business in India. His appointment came soon after the network re-structured its departments into five distinct verticals - domestic broadcast, international business, live events, films and digital.
Psst: The last Unilever exec-turned-broadcast supremo we interviewed (afaqs!Reporter, October 1, 2016) was Viacom18's Sudhanshu Vats; responsible for Unilever's laundry business in the South Asia region, Vats, over a decade, oversaw the creation of over 200 ads. Do we see a pattern here? Or is FMCG-to-broadcast still an atypical transition?
Punit, a self-confessed "newcomer" in the broadcast business is charming, cool and composed. Over an hour-long interview at his Mumbai office, he spoke to us about the need gaps in the network, and the industry. His views on matters in the television industry, by virtue of his being a newcomer here, were refreshing and unlike those we typically get from network heads. Having seen the product marketing and sales business from close quarters at HUL for over twenty years, Punit is of the view that broadcasters will do well to approach pricing and revenue the same way advertisers do.
We at afaqs!Reporter are thrilled to be the first to publish a detailed interview with Punit, after his move to ZEEL. We used the opportunity to ask him questions on several topics including video-on-demand, BARC and its universe, the English entertainment space, urban and rural viewers, regional markets, and FTA channels.ASHWINI GANGAL