Getting into the picture

Sanjay Salil's Mediaguru is new kid on block

Mediaguru made its money by setting up news channels for others. Now it wants to become a media company

Sanjay Salil was wondering what to do. It was 2002 and the channel he had joined (Falak) hadn’t taken off for almost 18 months. However, this Hindi journalist was in no mood to look for a job. He had done the job scene for more than 10 years — in Amar Ujala and later TV Today, where he produced ‘Good Morning Today’ and ‘Subah Aaj Tak’ in the nineties. Finally, he decided to stop waiting for Falak and get on with life. In 2003 he formed Mediaguru. That is the year Dainik Jagran was launching a news channel and Salil was asked to set it up.

From looking for office space to hiring staff, Mediaguru did everything for Channel 7 (now IBN7). By the end of the year, Salil was in business. Mediaguru set up in quick succession Manorama News (a part of the Malayala Manorama Group), NETV (in Assam) and Sakshi (Telugu) among 18-odd channels, largely in the news space. It has also set up five radio stations and consulted on 20. According to estimates, the Noida-based Mediaguru did Rs 45 crore in revenues, largely from setting up channels and consulting and research work for India’s booming news industry.

Now Salil, 41, has set his sights on going beyond offering advice to becoming a part of the media business. For this the company is targeting three areas.

One is the whole media services pie, something that is attracting the attention of every major (Reliance, Airtel, NDTV) and minor (Castle Media) player. Think of this business as a massive BPO opportunity in the $17 billion media and entertainment industry. The idea is to be the back end for formatting, transmission, and storing of content. There are, however, no estimates on how big this opportunity is.

Also, there is the whole issue of its being high on capital expenditure (capex) and low on margins. Salil claims that Mediaguru is targeting a much smaller capex, in the range of $5-10 million. The idea is to provide pooled services for small regional broadcasters – say, office space and studio infrastructure in large cities such as Delhi. So, it is, strictly speaking, not in the same area as the big boys.

The second business is more interesting and, possibly, less fraught with big competitors. Last year Mediaguru formed a 90:10 joint venture with Diamond Comics. Mediaguru Diamond Network has exclusive rights to all of Diamond Comics’ content (except printing rights). This includes characters such as Chacha Chaudhary, Saboo and Shaktimaan. About 60 per cent of Diamond’s content has been digitised. The characters will be available on the mobile, in games on websites, in merchandise form in shops over the next few months.

Recently, the JV entered into an arrangement with rediff.com to make its content available on mobile phones. “Diamond comics are available in every small town in India. The idea is to see if two-to-three years down the line, can we create a Disney out of India,” says Salil.

The third area is broadcasting. Mediaguru has three (non-news) broadcasting licences. Salil however is cagey about this one right now, because of the chats he is having with various companies. All he says is, “By the end of this year we will definitely be in broadcasting, with a tie-up.” Will that dry up its core business? “There is no conflict with our existing business because we are looking at the non-news business,” says Salil.

News broadcasting for now remains the bread and butter of its existence. How long will it last? At last count there were 122 news channels in India, the largest anywhere in the world. And the number is still rising. Though it is not very profitable, a disproportionate amount of capital chases this business. Much of it comes from cash-rich real estate firms and from politicians who want a channel to curry influence or favour.

In fact, with many of them, the usual business plan does not work. For instance, one news channel in Andhra Pradesh was advised to have four OB (outside broadcasting) vans; it insisted on having 30. If things continue this way, there won’t be too many players left and the launches will dry up at some time. What is Mediaguru’s survival plan for then?

“The regional news business will not shrink for the next three-to-five years. Also, consolidation will happen and so will the shift from SD to HD (standard definition to high definition), so there is a lot of work,” says Salil. He also points out that the company has started scouting for business in the Middle East, US and other parts of the world. That, incidentally, is something that other firms in the same space have already had success with. For instance, Castle Media has set up a channel in the US and in Bangladesh already.

It will be a long while before he has the time to wonder about what to do.