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End of the road for ETC News

By , agencyfaqs! | In | June 12, 2001
ETC's news company is shutting shop. Last week, the management decided to discontinue with the 10.00-pm slot, thus putting the last nail on its plans for a news channel


"We are going under because of market conditions," says Raghu Nandan Dhar, CEO and Editor-in-Chief, Ruperistan Productions. "I have asked for Form 32-A for resigning from the directorship of the company," he adds. Ruperistan is a company owned by ETC Networks' three directors, among others, to foray into the news arena. It has been supplying news to Doordarshan Marathi (Sahyadri) and ETC Networks, which runs the ETC and ETC Punjabi channels. Last January, Doordarshan and Ruperistan had snapped ties. Last week, the ETC management asked Dhar and his team to discontinue news on ETC. With no more clients in sight, Dhar is asking employees to seek other options. "We are telling everybody that it didn't work out because of funding and so we are shutting it down," explains Dhar.

If the name Ruperistan sounds a misnomer for a news channel, well, it is. Dhar says it was actually a distributor of International movies in India, called Imperial Company (in the pre-1930s) before the English sold it to an Indian promoter. The latter christened it as a Marathi equivalent of the silver screen. It acquired its present role around middle of last year when ETC Networks, having become public, wanted to clean up its balance sheet. "It was spun off as a separate profit centre," recalls Dhar, "and ETC appointed me and Chandramohan (Puppala; another senior journalist) as directors. The agenda was to make it a satellite news channel, beginning with Hindi, and then other languages, but running on its own steam." Along with it came an assurance from ETC of supporting the company till March 2001, followed by a review, recalls Dhar.

At that time, it had bagged two news slots on Doordarshan Marathi - a 30-minute daily news show, and a 15-minute weekly round-up on Mondays, with rights to sell its FCT (free commercial time) too. The DD relationship turned sour around January 2001. DD refused to extend its relationship with Ruperistan this January. "Prasar Bharti felt it did not make any money out of it and it could do the news itself," says Dhar. While Dhar affirms that FCTs were sold reasonably well (210 seconds on 30-minute news for Rs 3,000 per 10 seconds; 100 seconds on the 15-minute round-up for Rs 7,000 for 10 seconds), he does admit that advertisers were a pissed lot many times. This was because of the awkward decisions of the state broadcaster to frequently shift the time slots. Ruperistan had begun with a 9.30-10.00 pm news slot on DD Marathi. It was revised twice to 10.00-10.30 pm, and 8.30-9.00 pm, says Dhar. For advertisers, such scheduling changes spell disaster.

Why ETC decided to discontinue the relationship remains a bit of a controversy. "I fail to understand the decision," says a bemused Dhar. According to an ETC source, the news slot was "not getting us the desired response" in the wake of increased competition among news channels. "The TRPs had risen in-between around August but could not be maintained." Also, the source adds, "The content was too Mumbai-centric while we wanted a national picture."

Dhar has an entirely different story to tell. "It was a very good brand ambassador for ETC. TVRs were settling in ETC at around 10.00 pm after we started current affairs," he claims. "We were doing TVRs of 0.8-0.9 compared to even STAR's 0.5-0.6. Sponsorships were coming in. We had good response from even neighbouring countries like Pakistan, Bangladesh, Sri Lanka," he adds. On the content side, Dhar has a host of examples to cite. "When Rajkumar was released by Veerappan, our correspondent was the first to meet with him when he went straight to Coimbatore. Our people lived with the Naxalites to carry exclusive footage. There are numerous other instances," he says.

Dhar, Puppala and their team were making extensive preparations for growing the business. "We were supposed to go up to four slots a day on ETC and then move on to becoming a 24-hour channel," he recalls. While the initial airing on ETC began with the 10.00 pm slot, the idea was to have breakfast news too, according to a statement made by Jagjit Singh Kohli, director, ETC Networks, in an interview in November 1999. The initial enthusiasm saw the company build a network of 25 bureaux, two studios, six editing suites and some 110 people over time, across the country.

In an interview with agencyfaqs! in March 2001, Kohli spoke about sharing that infrastructure with other channels. "We are looking at joint ventures with other channels, including Indian business houses that have aspirations of a news channel and the foreign ones that are planning to enter India," he said. That didn't happen. The dot-com bust and the Nasdaq crash, supported by Bharat Shah's arrest, took a toll on media stocks, feels Dhar. "Though we kept explaining the differing economics of news and entertainment media, it didn't help," says Dhar. His team kept working at beating down costs and raising productivity. "We were producing one of the cheapest news on television with the most effective use of equipment. We produced more news per camera per person," he elaborates.

Bottomline is, first year revenues were still 70 per cent below expectations, affirms Dhar. Employees began exiting some time back. Today, the staff strength is down to about half. The fate of the company is uncertain. "It will have to be closed down," says the ETC source. "A public listed company can't carry on a loss-making proposition." Dhar remains optimistic. He remembers his earlier stint at In Mumbai where the company managed to break even in 18 months. "I am taking a break but we will look for an investor who believes in this," he says. "Otherwise, I never had a vision, did I?"

© 2001 agencyfaqs!