 "Nick and Sonic are jewels in the Viacom18 crown: Sudhanshu Vats")
What has changed in the four years since you took over as group CEO?
We closed the financial year (FY) 2016 with Rs 2,900 crore (in revenues) and should be able to close FY 2017 with Rs 3,500 crore. About 60 per cent of this is from Colors Hindi, 20-25 per cent from regional/kids (Colors Kannada, Bangla et al) and the rest comes from films, consumer product licensing and events. Four years back with had four channels in India and two abroad, now we have 26 in India and 12 abroad. Our revenues have moved from Rs 1,200 crore to Rs 3,500 crore. Every segment of our business is now profitable. Kids (Nick, Sonic) has a healthy bottomline. About 80 per cent of our broadcast revenues are from advertising. We have been PAT (profit after tax) profitable from 2014 onwards so we have capital to invest back.
More From This Section
You launched Voot (a video app) in March this year. How is it doing?
We had 15 million monthly active users on Voot in October. And across the website and app we are clocking 45 minutes per user per day. Overall Voot does about 750 million minutes a month without cricket (unlike Star's Hotstar which does much more with cricket). We have had 11.5-12 million cumulative downloads. About 40 per cent of the consumption (in minutes) on Voot is Colors (Hindi), 20 per cent is MTV especially Roadies and shows which went off-air such as Kaisi Yeh Yaariyan. And 20-23 per cent is kids content; Motu Patlu, Chhota Bheem, Shiva, Dora. (Voot offers programming from other kids broadcasters such as Turner too). Over 300,000 parents are pin-signed onto Voot. So, if we ever launch a subscription driven video-on-demand service that is the potential. Ten per cent of the consumption is from regional and about seven per cent from Voot originals. By FY 2018, the first full year of Voot's operations, we should have clocked Rs 50 crore in revenues and in five years we should break even. And this is without the Big Boss online journey which started with this season.
Could Voot become a reason for bidding for sports since it drives so much of Hotstar’s traffic?
Kids TV (Nick, Sonic) is unquestionably a jewel in the crown for Viacom18, it brings in a decent EBITDA. On the overall portfolio we have enough and more to do outside of sports. If we look holistically, sure sports is important, but it is very high investment and has a low probability of success because most of it is available online.
So what is the priority?
The number one priority is driving regional growth. The ad sales growth in regional is 1.5 times that of Hindi. Also we would like to build a more holistic regional business with TV, films digital all in play. Right now it is some regional TV, some language films. We need to widen and deepen our offerings, not just in the South. We just launched our second Kannada channel, so we will be (multi)plexing the geographies. The second is digital (already discussed above) and the third is building an ecosystem. We have the second largest consumer product licensing business after Disney in India (on revenues). Besides our own characters (such as Motu Patlu or Shiva) we also offer third party characters such as Peppa Pig, Winks. The Flyp by MTV café just opened in Delhi, a first by Viacom anywhere in the world. We are doing live events such as MTV Bollywood in 20 towns and also Dora Theatricals. It (consumer products and events) is a very small business, just about Rs 100 crore in revenues, but it could be bigger and more profitable. It is helping us build a portfolio for the future.
You seem to have scaled back the film business…
The one unpredictable piece in our portfolio is films, so it goes up and down. Now the business is profitable and we want to keep it at six-eight Hindi films and four-six regional films a year. And we also release four-six Paramount (part of Viacom globally) films a year. We have partnered with Lions gate on all their India's releases.
What are the big trends you see driving this industry?
There is a big shift happening from push to pull. Consumers will pull content toward themselves in digital. The business model will become more business to consumer. So far it was a consumer business operating as a B2B one. (Because media firms sell not to consumers directly but to advertisers). How we will embrace technology as media companies is important.