'There’s a case for uniting and keeping apps separate': Uday Shankar, Vice Chairperson of Reliance-Disney Media JV

The Reliance-Disney media joint venture has massive scale, size and reach. But what are its implications and what is the way ahead? In an interaction with Business Today, Uday Shankar, 62, Vice Chairperson of the entity and Co-founder of venture capital firm Bodhi Tree Systems, talks about linear television, OTT, cricket rights, and the long-term vision. Edited excerpts: The Reliance-Disney media joint venture is a behemoth. What does this mean for viewers? Mergers and combinations do not change viewers’ lives, but the outcome does. We are very determined to use this merger as an opportunity to completely reinvent the content and its experience ecosystem. India has been a great content market, and the history of television and video is less than 30 years old. It has emerged as one of the most exciting video markets on linear television, the internet and everywhere else. The time is ripe to enhance that experience and take it to the next level across platforms. We are ideally positioned to do that because of our volume of content across genres. Between Colors and Star, we have more capabilities and content across drama and reality than anyone else. On internet and streaming we have Hotstar and JioCinema. Hotstar created streaming in India and JioCinema made a significant intervention there. This is a great opportunity to change the viewing ecosystem. Are you looking to combine your streaming platforms? There is a case for bringing the two together as is keeping them apart. Hotstar has emerged as a very well-rounded entertainment destination for Hollywood and Indian content. JioCinema has had a much shorter lifespan and started with live sports and prominently cricket. Both have their core identities, and we are now examining options. The combined entity, with both linear TV and OTT, can command a price from advertisers. How do you view that? We do have scale and reach—750 million viewers come to these platforms collectively every week. We also have great brand affinity between Star, Colors, JioCinema, and Hotstar. Then, there is content from India and the rest of the world. That said, monetisation depends on the capacity of the market. While we incur costs and are committed to delivering content, which is in our control, getting money for that is not. We all know advertising on television has been under pressure. On streaming, advertising has been growing very healthily, but the size of the market itself is not expanding as much. That said, it’s a good time to be around because the Indian economy is growing, along with consumption. But innovation is critical. It’s not a ready-to-harvest advertising market, with one having to shape and create the market. You will need to expand the pool of advertisers, innovate, and disrupt advertising formats. For general entertainment channels, there is a view that appointment viewing is on the way out. What’s your take? People make appointments because they find it worth their while. If content is compelling, people will make an appointment for a big movie. You will go to the theatre on Friday for a movie that excites you. A big cricket match has the whole nation showing up, regardless of what the screen is. I think the growth in distribution and consumption hasn’t kept pace. Also, the growth in creative innovation has not kept pace with growth in distribution and consumption. So, there is an element of fatigue and that is the opportunity to disrupt. In 2008-09, when I was running Star as CEO, we had the same situation. The market was slowing down without enough excitement. Entertainment consumption was shrinking and then came Colors and challenged Star. It dislodged Star for a few months from its No 1 position. Interestingly, the market expanded and from the number of new viewers to the time spent to revenues, everything was up. We are not doing enough to stoke viewing. Your combined size in the digital space is as massive as it is on linear television. Is there a playoff between the two when it comes to advertising? If we didn’t have linear TV or digital, it would be a very different strategy. Since we have great scale and reach in both segments, why would we de-emphasize one or the other? We see this is a complementary service and viewers don’t make that distinction—if there’s an IPL game, people want to watch it on the best available screen. I think there is an opportunity to offer integrated and tailored solutions. To give you an example—in the very first year that we got the IPL rights for JioCinema, we did some serious innovation. We introduced multi-camera for instance, which for television is not the best destination, but for a relaxed experience, is good. Star had the television rights but the consumption on both grew significantly. You need to offer a better product to the viewers. With your scale, the revenue composition between subscription and advertising might change now. Will JioCinema go pay? We started JioCinema with everything available for free and then got premium Hollywood content, HBO and also what was made-for-JioCinema, before creating a pay tier. Now, it has 18-19 million paying subscribers in five to six months. Consumers will pay if they see value. Advertising subsidises the consumer and we will have it across platforms. We will continue to push subscription but not a one-size-fits-all solution. New-age media companies have innovated well on distribution and consumer experience, but not on monetisation models. It is time to disrupt that. We will get the optimum mix between free and behind-a-paywall. What will happen to linear broadcasting? Will it be a small part of a large digital-led pie? We are very committed to its growth. When I got associated with Viacom18 and JioCinema, we had a smaller franchise and, therefore, grew digital. Now we have a very big, successful and high-quality television franchise, with Star and Colors, two big brands. Linear television is still in 90 million homes at the last count. That is 300-350 million paying consumers and there are [those] using the free TV service, adding up to half a billion. What it requires is fresh energy and creativity, and we are in a position to do that. The big cricketing properties—IPL, BCCI and ICC—are housed in Reliance-Disney. But Disney has struggled with sports leading to financial stress… Yes, there are some onerous financial liabilities on account of the cricket rights, and we have to solve them. It can be done by growing the market, plus innovating on advertising and monetisation. We are committed to the rights regardless of costs. Before this JV was finalised, those considerations were looked at. The bad news is cricket rights are very expensive and awarded for a very short period of time. The good news is that since they’re awarded to you for that short period, you can grit your teeth and plot your way through. With a limited number of players now, do you expect cricket rights to reach conservative levels? I don’t know but I hope so... Cricket, or for that matter, many other rights, have become very expensive. Cricket is a huge aggregator of viewership and a great business, provided the price is reasonable and on terms that are sensible. If that doesn’t happen, then we’ll have to revisit that. I’ll give you an example. Whenever I have headed businesses, I invested in movies. But there came a time when you were getting third-class movies at first-class prices. Star withdrew substantially from that and there were markets where we were still buying movies. Even at JioCinema, we invested in cricket and Hollywood content but were very selective about buying Indian movies. If content is compelling, we will go for it. RIL has invested Rs 11,500 crore into the JV. What will that broadly go into? We need to continue to invest in technology, building better UIUX and on content. There are onerous cricket rights, and those obligations have to be serviced. The money is designed for everything and not for one specific purpose. It will be spent according to the business plan and building this company to redefine and lead the media business in India and elsewhere for a long time. What is the agreement with Disney with respect to their library and technology? They are a shareholder, and we have a very comprehensive agreement to access their content library. Disney has a fabulous content portfolio and between that, HBO, Paramount, and Warner, there is a very rich content library. Disney will hold a little under 37% in the JV. Is there any indication on how long they will be around? They have come in because they want to be there. Disney is a great global company, and I don’t see them exiting a market like India. It’s just a pivot on both sides to build a bigger, greater business. In your conversations with Mukesh Ambani and Nita Ambani, there must have been a discussion on the vision and the long-term future of this behemoth. Can you share some details? The vision is very simple. We believe India is going through a transformation. The video and the media and entertainment market in this country are at an early stage of evolution. The question is—can we be the default for every Indian who wants to consume content, and can we be available to them? Can we get the largest slice of time and attention from the largest number of Indians? That’s what we want to achieve. India is a market where—particularly foreign media companies—come for 1.4-1.5 billion [users] and design solutions for 100-200 million, only to struggle. Everybody gets the attention of, say, 10-15-20-50 million customers but are mass. We know this country [and] want to go to every Indian wanting to consume video. @szarabi, @krishnagopalan

'There’s a case for uniting and keeping apps separate': Uday Shankar, Vice Chairperson of Reliance-Disney Media JV

Uday Shankar, Vice Chairperson of Reliance-Disney Media JV, on the entity’s plans, the future of appointment viewing, subscriptions, and more