We are fighters and we will fight our way through in print.

You'll know what the phrase "iron grip" means when you meet - provided, you can wriggle your way into his packed schedule - Kalanithi Maran, chairman and managing director, SUN Network. He is razor sharp, knows his market like the back of his hands and quite matter-of-fact about his success. After dogging him for nearly two years, Shamni Pande of agencyfaqs! finally met up with the 37-year old media professional for his views on a variety of issues including the impending conditional access system, radio as a medium and the new markets the SUN group hopes to tap. During the course of the interview, Maran said something that is bound to give some of the print oldies the heebee-jeebies. "I am firming up plans to enter print in the second half of this year. I am looking at the English and Telugu markets," he announced without fuss. Here are some excerpts from the interview:

Edited Excerpts

I will enter print by the year-end. The first half of this year will be spent on streamlining radio and in the second half I am going to work on entering print. After all, we already have the infrastructure in place.

My analysis is fairly simple. There is no vacuum for me to fill in Hindi, neither is there enough potential in the other regional markets of north India. Other players have already tried their hands and I know the results. Also, I am clear my market in not Tamil Nadu or south alone. Because Tamil and Malayalam are already crowded and there is no vacuum for me to fill here. I see a huge room for growth in English - though I am not talking at a national level but in the south. There is place for another strong contender in the south for English. Similarly, there is room for growth in Telugu.

Print makes sense for me at this stage because I already have my reporters and stringers all over the place. The flow is already there; all I need to do is get this flowing for print. My overheads are already taken care of, there is only an incremental investment to be made.

I get 300 news stories a day; I use only a few for TV, the rest are never used. Print can take care of this surplus, as news on TV only captures headlines of each page, so to say. Besides, as a matter of policy, all the reporters have to send in a written draft for all the news stories they file. We do not expect them to do a perfect job on that front. There is a huge team here already to take care of writing and editing. I see no problems.

Why is my 8.00 pm news so popular? It obviously speaks of trust. No other news slot is as popular as mine and it is not as if people do not have options. Besides, all newspapers and magazines take sides. I am proud of my heritage; but I am equally clear about my profession and how hard I need to work to earn people's trust. I am not worried at all about this issue coming in the way of my effort. We are fighters! We have fought Doordarshan, we have fought different television players in different TV markets and we will fight our way through in print.

It was not a fun idea at all! The thought process was fairly simple. I did discuss the idea with my friends and we wanted to do something in this media when it was just picking up. The idea was never conceived of in an irresponsible manner, I was serious about it from day one. It did not even occur to us that this could be a fly-by-night operation, where if it does not work, we can pack our bags and move on.

We knew what was ahead of us - that this was a tough market. I was conscious about the task of market creation ahead, the fact that we had to battle a giant like Doordarshan and that there was zero cable TV penetration.

When I started in 1993 there was hardly any cable spread. What kind of research could you do at that stage? I could go ahead and put a satellite signal, but who will see it if there was no cable? So we went around every town talking to video library owners to try and convince them that SUN was a winning proposition that could make them money at Rs 30 per household. SCV (Sumangali Cable Vision, the sister concern responsible for cable spread) came in much later and is only four years old. At that point there were only ZEE, STAR and SUN. The first two had nothing do with Tamil Nadu and in those days the cost of a dish antenna was a minimum of Rs 70,000. The analog receiver cost Rs 25,000, which was quite apart from the modulator etc.

Given this, our spread inched up slowly and it has been a tough fight. Earlier it was to build market and bear that cost; today it is about retaining position. However, the fight for "retaining position" started in the second year of launch itself, when we started doing well. We were able to turn the table around within six months of launch, within two years we had the first competitor with Jain TV with their Tamil band, followed by ZEE, Raj TV, Golden TV (Vijay TV's original owner Odayar, which subsequently sold it to Vijay Mallya and the rest is history), JJ TV… So we have never had it easy, at every stage we have had to contest and build our ground. But I like competition, it does not make us complacent and keeps us on ours toes.

Tell me who are these producers who have left me? We have, on the contrary, stopped working with two or three (I shall not take names) and not the other way round. We left them as they were not able to deliver. Also, I have been working with the same set of producers for the last five years. Radhika has been with us five years, AVM for five years. If these had gone bust, they should have left us. In fact, most of the producers have gone public and floated issues riding on the popularity of producing serials for us! If you check, there is a waiting list of at least 15 people wanting to work for us. The funny thing is, Khushboo, who started work with Vijay, now wants to work for us. No one has made a loss.

Yes, we do have a different working model. We do not commission programmes, but 'lease' time slots to them. When I commission a programme, then all rights for the serial belong to me, as also the responsibility to market it. In our system, we sell time slots, and we give producers commercial time on that slot that can be sold to sponsors. So if their product is good, it will find takers. If not, it will fail. This way competition is created between two slot holders and they work hard to keep their individual ratings up. We deal with planners and marketers for our own programmes, but that's a different thing.

What I am saying is, the channel has a combination of two kinds of programming models, where we do our own programmes and we lease time slots to private producers as well.

However, each of our channels follows a different system. For instance, for Surya in Kerala we commission programmes; we do not follow SUN's strategy. For Gemini TV in Andhra Pradesh, we have a combination of both. Udaya also has a similar model.

There's a difference between doing day-to-day affairs of the channel and keeping a good grip over your business. I have a good grip on my business, I am extremely hands-on, I know exactly what is happening to each of my channels. If I do not have a grip, then I cannot run this business.

However, I have delegated responsibility for my channels. I do not interfere with their functioning. I have 10 successful channels; it is just not possible for me to take decisions for them all the time. I have an excellent team, which is encouraged to take decisions. Yet, to encourage initiative and be successful one has to have a good grip and know the exact status of the channel.

Two months is what we give any programme. If it does not do well then it's off air. Besides, we have a fairly good feel of the market; so when proposals come to us, we have a fair idea of what could do well. The market now knows our reputation. We do not make promises easily, and if we do then we make sure we stick by them.

We follow a fairly simple procedure, but that does not mean we do not try new things. SUN was the first to introduce mega soaps in the south, when everyone was talking of weekly slots. In the national scene, we were the first private player to start a news channel. In 1995-96 when I started, news was considered a non-revenue generating investment. People also felt that there would not be enough viewership. Now you see what's happening. There are so many news channels flooding the scene.

News channels will not make revenues, unless they are pay and part of a bouquet. I may be wrong, but this is my personal opinion. A stand-alone news channel has little chance of doing well - that has been the case worldwide. There's a problem with news channels - ratings for news channels are never constant. It goes up only during "events". Unfortunately, this usually means a calamity like an earthquake, war etc. A brand/ marketer cannot come during the time when the Parliament is being attacked, or there is an earthquake and say this was sponsored by XYZ. It's just too bizarre. Besides, many a times even marketers are not in a position to know when there is breaking news on an event. So there are many practical problems to news channels. That's why SUN News is a pay channel and part of a bouquet.

The advantage of the SUN News channel is that its cost is shared. My stringer cost is divided and my overheads are low. So it is viable for me.

Life will change drastically post-CAS. Either pay channels will become free-to-air again, or lose viewership and ad revenue! This is bound to happen till the industry finds a collective solution. The set top box, people claim, sell for Rs 4,000. But I have yet to find someone who can supply it to us at that rate! I have yet to come across a box that is less than Rs 5,000 - without tax that is, and then there is the issue of VAT as well. In fact, some of the advertised rates peg it at Rs 7,000. This means we are effectively talking about the SEC A segment only. The SEC B/C/D segments will be happy with free-to-air. Let us take a market like Chennai, which is predominantly Tamil. All the Tamil channels are free-to-air, except STAR-Vijay and our KTV. This means the majority is free-to-air, including our driver channel SUN. So who is going to buy the box? People who want to watch STAR or, may be the Hindi viewing audience. I would say that in Chennai, if they can move 10,000 boxes it would be a very big thing. Bluntly put, if CAS has to be successful then SUN has to be pay in the south and STAR has to be pay in the north. That is, the driver channel has to be pay, for which viewers will buy a box, and through which other pay channels can also come in. But very few in the south will buy a box for STAR.

The broadcasters have to decide if they want subscription revenue or ad revenue. The next one year, the market will see a big confusion.

Take a market like Mumbai where you need a minimum of 20 lakh boxes. To install that many, it will take a minimum of six months. So what happens in that interim? The pay channels will lose their viewership.

I think CAS is a fantastic system, and it is the right system. Why should the consumer pay for what she/he is not watching? The other thing is all those issues relating to viewership of channels will be clear. All said, I am for CAS and viewers will benefit either ways - either pay channels will become free or they pay only for what they want to watch.

I have four channels - KTV, SUN News, SCV and Gemini - that are pay. It will affect me as well, but I maintain that this is the right system and a good thing. There will be no under-declaration by cable operators, we get the money straight from the subscriber.

However, the general tendency of the Indian consumer is that if things come free they are fine, if not, consumers get very difficult. They will start questioning rates. My estimate is that if the box is anything within Rs 3,000 then it is a very decent peg where we can hope for some initiative from consumers. Anything above this is going to prove disastrous. In fact, this can be charged on a monthly installment basis.

But I know the ground situation as our sister concern for cable network, SCV, has been talking to people and we have been preparing for CAS for the last seven months. Despite all efforts, we are not able to get the price below Rs 4,000. My idea was to get the box for Rs 2,500; but nothing is working below Rs 5,000. So how do I commit on numbers? I really do not know how many in Chennai will opt for these. Just imagine, even 50,000 boxes at the rate of Rs 5,000 amounts to Rs 25 crore. It's no joke! How can an organisation cough up so much money on stocking boxes when we are not sure about the takers?

SCV leads the market with 84 per cent spread, with Hathway commanding just 16 per cent of the market. Going by that ratio, we'll have a larger chunk of the market to cater to and therefore, we have to block a huge amount of money. After all, I am told there are 8 lakh TV-viewing homes in Chennai. So even a number of 25,000 boxes is conservative to begin with. But if even 25,000 move out initially, then I'll know that there is a chance to push more and I can swing into action, air-lift the boxes if the need arises.

Even by the most conservative of estimates, I have to look at say 3 lakh homes (assuming that 50 per cent homes opt to buy the box). That's why I say the market will undergo a huge shakeout and there will be a lot of changes in the next one year. There are no predictions at this stage. When my team asks viewers they may say yes, and then they might change their minds when it comes to coughing up the money. Who knows?

We have already launched FM in Tirunelveli, Coimbatore and Vizag. Chennai will happen most probably by the first week of next month. In these three places, radio is doing much better than what we had expected.

Radio is certainly a great medium, but not at the unrealistic rates at which we have got the license. This time we will opt only at realistic rates. However, at the current rate at which licenses have come, there is no way radio will make money. For Mumbai alone players have paid Rs 65 crore as license fee to the Government, and the ad revenue that they made till now is only Rs 2 crore (all channels put together). Where is the balance Rs 62 crore going to come from? Overall, the radio market itself was worth only Rs 60 crore. How can Mumbai alone generate so much? Chennai went for Rs 3.5 crore (mind you all these rates are on compounding basis and there is 15 per cent hike every year on the original fee!) and now we are left with two out of the originial 11 that had initially bid for the this circle. The fee is ridiculous!

If you look at Chennai, the ad revenues from radio will be Rs 1.5 crore in the first year of operation. However, when competition comes in, the rates are going to fall. Given that, if all the three players (that is, including AIR) do Rs 1.5 crore, it will be great. In fact, to break even I have to sell spots (per 10 sec) at Rs 1,500 and I sell it for Rs 600 in Tirunelvelli. That's not all. I have managed to sell only 50 per cent of my commercial time. I still have the other half waiting to be sold. There are TV channels that sell spots for less than that. So who will opt for radio when TV is available for less and that is the preferred medium by advertisers today.

I went for this medium because I like radio and feel it has tremendous potential. Besides, when we entered the fray the rates were not so bizarre. Things changed at the bidding stage with everyone quoting and then exiting the scene as well.

In fact, we face a strange situation. We went to people asked them to graduate from radio and watch TV; now we are going back to them and saying listen to radio. Again, I have to do ground work as I have weaned people away from this medium in a big way. Now we have given away many radio sets to drive people into FM. We say, "If you are at home 'watch' Sun, if you are outside 'listen' to Sun." Since this medium is again at its infancy we are going about it in a very simple manner - by playing movie songs and establishing a rapport. We will build our strategy as we go along. It's just a month-old baby, and we are not experimenting at this stage.

Yes, that was two years ago. But the markets are in a terrible condition; so we have postponed our plans. No sensible person will want to tap the market at this stage.

I admire the Disney brand. It is not a successful story any more, but it was… Again that's a good lesson in terms of how a successful brand can be unsuccessful in terms of revenue. But this year it has done well. I do not watch my own channels so much, but when I get time, I like watching documentaries. So I find myself watching Discovery and the National Geographic Channel most of the time.

I do not talk numbers at all. I do not need to, as the SUN Network is not a public company (it's a privately held group). As for each of my channels, I keep telling my team that getting to the top is easy, anyone can do it. Staying there is difficult. So my agenda is clearly to retain my leadership position.