The Dark Horse

By Prajjal Saha and Tarana Khan , afaqs!, New Delhi | In Media Publishing | May 26, 2009
Within nine months, Colors galloped to dislodge STAR Plus, a channel that reigned supreme for nine long years. afaqs! learns how it did what it did

As it turned out, media watchers were looking in the wrong direction in late 2007 and early 2008, when Peter Mukerjea and Sameer Nair - both ex-STAR CEOs - launched channels. It was another STAR executive who stole the show. We are talking about Rajesh Kamat, the 'underdog' who launched the general entertainment channel (GEC) Colors.

Colors' cracking start has been well documented. In its second week, the channel claimed the No. 3 position among GECs and nine months later, caught up with STAR Plus at the top, a place STAR has ruled for nine years. So what did Kamat and his team do right? And what did they learn from it?

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When Colors entered the fray, there were 11 Hindi GECs. Kamat received (from owners Viacom and Network18) a one line brief: make Colors one of the formidable players in the GEC space.

Colors banked on the three Ds - distribution, disruption and differentiation in content. Kamat drew on his FMCG experience - he had worked with Coca-Cola India, where he quickly moved from being an assistant brand manager to media manager - which had taught him that the placement of any product is best when it is placed next to the most visited stall.

He applied the same formula and got Colors placed before (or after) STAR Plus and Zee, the top two Hindi GECs. "Your channel is bound to be sampled more when it's placed close to the two most popular channels because viewers tend to move up or down while surfing," Kamat says.

He also used an FMCG trick to market the channel. What you see in the shop front is not what sells the most. That is why a non-fiction show (Fear Factor) was promoted aggressively and made the face of the channel, despite the fact that the staple for a GEC is fiction shows. Next, he disrupted the common beliefs of television programming.

On weekdays at 10 pm, STAR Plus was airing Kahaani Ghar Ghar Ki, one of its aces, and it was doing fairly well back then. However, Kamat went for a non-conventional approach and placed Fear Factor - which was supposedly male-skewed - in the same time slot. Such shows are usually scheduled for weekends. As Kamat puts it, "It was a differentiated product with a disruptive strategy from a scheduling standpoint."

Fear Factor and its star actor did its job for the channel. "Akshay Kumar's presence delivered enough sampling for the channel and publicity for the show. This gave the channel an entry into the single TV household. Any new channel takes at least three-four months to get sampled across audiences. However, with this show, we got it instantly," Kamat adds. It was just the impetus Colors was looking for.

Moving quickly

Even after the success of Fear Factor, many in the industry were still not convinced about Colors' success, saying that it was just a one show channel. "Okay! Fear Factor was successful, what next?" The answer was another big ticket show - Bigg Boss.

Colors began to be perceived as an expensive channel as it had launched two big-ticket shows back to back (the cost of producing a big-ticket non-fiction show is, at times, 7-10 times that of a regular fiction show, depending on the scale). Was it overspending? "If you look at our 12-month outlay, it's pretty much the same as any channel," says Kamat. This is why Bigg Boss was replaced by a fiction show, Uttaran, which cost Rs 5-6 lakh per episode.

Here, Kamat used his production experience strategically. Recalling his experience at Endemol, Kamat says, "In an Excel sheet, there are five cells which can completely change the output on air. So, one needs to cut a cell which will not have a direct impact on the output."

When people tend to cut cost in production, everyone tries to cut cost on sound, lights, sets or the technicians. However, these have an effect on the production quality. So, Kamat cut down on the number of technical (effective working) days, which brought down the production budget. "At Endemol, I added technical days to a show, but now I cut them," he quips.

Fear Factor was shot in South Africa with Akshay Kumar and 13 top models. Similarly, for Bigg Boss, Colors decided to have inmates who were newsmakers - famous or infamous - who kept the channel buzzing for another four months.

The double barrelled approach came off spectacularly. "When we needed one missile, we fired two so that if one misses, the other one would hit the target. Luckily, both hit the bull's eye," he says. Many still find it surprising that both Fear Factor and Bigg Boss worked for the channel.

"We changed the scale of the game. Not to play petty or not to have a softer approach is something that I learned at STAR India," declares Kamat. However, he was also aware that one can't completely digress from what the lady of the house is comfortable with - the fiction shows. But fiction shows need time to build up a following. For the first four months, the non-fiction shows kept the fuel running for the channel.

"First we were a one-show channel. With Bigg Boss, we became a two-show channel. Today, we are happy that there are about seven shows which are the above the three-four TVR mark. It's better than having just one or two shows with seven-eight plus ratings," says an enthusiastic Kamat.

While scheduling programmes, Colors went against the accepted principle that viewers should not get an alternate viewing opportunity in the initial launch period as they tend to move away. "Today, that seems to be the way of life - an 8 pm show with an 11 pm repeat followed by an afternoon repeat the next day." Balika Vadhu was repeated six times a day and these repeats together contributed to about 50 per cent of the total GRPs of the show. Besides, it got in new viewers.

Moolah matters

Colors got the GRPs, but by the time its GRPs increased, the industry was facing a slowdown. Bad luck or bad timing?

Consider the advertising pie in this market. Annually, nearly Rs 2,200 crore is spent on the Hindi GECs. STAR Plus takes 45-50 per cent of the pie and the rest is divided among the other channels. Where does Colors stand?

GECs are broadly divided into three categories: Tier I, II, and III. Channels with weekly GRPs of 40-50 are in Tier III and they have a revenue of Rs 40-50 crore annually. The ratio between the weekly GRPs and annual revenue is 1:1.

For Tier II channels (with weekly GRPs of 70-100), the ratio is 1:1.5. The channels make Rs 100-150 crore. Tier I channels (200 GRP plus) have a ratio of 1:2 (STAR Plus' ratio is 1:2.5). Colors is in Tier I. The channel has started commanding premium for the reach that the Tier I channels provide, but what it is missing now is the legacy, claimed by many of the older channels.

The other strategy for advertising sales, which Colors adopted in the initial days, was striking short-term deals or having only one sponsor for the show. "We purposely did not go for annual deals initially. Firstly, we were not in a position to command rates, and secondly, we were not ready to compromise on the rates we had asked for." Initially, there were apprehensions about the channel among the advertisers as well, and even they decided to wait and watch. It was only in September or October that the advertisers started taking the channel into serious consideration.

Colors' sudden growth has helped it withdraw offers. For instance, when a proposal for Balika Vadhu was sent to an advertiser, the show had a TVR of 0.8. When the sales team met the client, the show had garnered 1.5 TVRs and by the time the parties were ready to sign a deal, it had reached 2.5 TVRs. Colors called it off because the client wouldn't cough up the rate. A proud Kamat says, "Today, when we negotiate for the annual deal backed with 270 GRPs, we command our own price."

Playing a tough game…

When it came to programmes, Colors was quite ruthless with non-performing ones by replacing them with new ones within six months. For example, it replaced Mohe Rang De with Mere Ghar Aayi Ek Nanhi Pari.

Colors recently went pay. "We were on the threshold of moving from push to pull, which is when we decided to go pay." The distribution game is for the second and third years. As cable television gets further digitised, declaration from the MSOs (multi system operators) will increase. The channel hopes to make good money then.

In the next three months, Colors plans to go international, beginning with the US. This will be followed by West Asia and then the UK. The international distribution is important because the money adds to the bottom line. Colors' business strategy is to offset all costs with advertising. All other revenues should go to the bottom line.

… together

Colors' success is also of the team as much as of Kamat. He says, "The biggest strength of the team is the diversity of experience. We hired Rameet Arora (head, marketing) because he would question everything as he came from a different industry. While hiring people for any level, we looked for those who had the passion and the experience in any diversified field. We launched with 80-90 people and as underdogs, we put in 200 per cent."

So how was it handling the two bosses from Viacom and Network18? "Luckily for me, Haresh Chawla is also acting as the group chief executive officer for Viacom18 and so he handles both the partners. Besides, although you report to the board, the good thing is that the mindset of both the partners is broadly the same. If you look at it differently, both needed a driver channel to propel their individual networks," Kamat says.

The channel is ready to break even by the end of this year on a quarterly basis, much ahead of its original plans. What does Kamat feel about his success? The man is modest enough to say that if "we could pull it off in nine months, anybody who has differentiated content or good distribution in place can do it."

Theory notwithstanding, Colors will be a tough act to follow.