@FF12: Text of Star India CEO Uday Shankar’s keynote

15 Mar,2012

Good morning.

 

Senator Dodd, Secretary Uday Verma, Chief Minister Chavan, Prosenjit, Jehil and my dear friend Karan Johar, the remarkable team of FICCI that has organized this fabulous event, friends from media, ladies and gentlemen.

 

A couple of years ago when I was asked by FICCI to take over the chair of FICCI Broadcast Forum, none of us had an exact idea of the timeliness of that decision.  FICCI was seized off the maturity and the size of Broadcast media and felt that the time had come for it to sharpen focus on this aspect of media and not merely treat it as an adjunct of films.  However the momentous changes that have happened in the Broadcast media landscape in the last 2 years clearly justify the wisdom of FICCI.

 

I find a powerful validation of the significance of television and broadcasting in “Positivity” – a report by the IBF on the impact of television. IBF has gone ahead and spoken to our viewers – the key findings of the research are gratifying and humbling for the industry. I don’t want to give too much away, but must highlight two interesting results – Over 90% of our respondents believe that television is a source of encouragement and motivation and a similar percentage of women respondents believe that Television has given them the confidence to believe in the capabilities and potential.

 

Gratifying as it may be, it is just the beginning. We are at the cusp of what is set to completely transform broadcasting in India forever.  I am talking about the universal digitization of television distribution.  This is a subject that has dominated all discussions at all forums in the last year and I presume will continue to do so for a long time to come.  But let’s pause a minute and recall what the discussion is centered around.  Most of the discussions that I have participated in are still around whether digitization will happen and if it indeed were to go through, how chaotic it would be.  With all humility may I suggest that it is a meaningless discussion triggered by a bunch of retrograde interests who are living in denial.  Let’s get some basic facts -The Cable Television Networks Amendment Act is not the beginning of digitization.  Digitization of distribution is a big reality and the 40 – 45 million homes that have bought DTH boxes at some point or the other are a conclusive evidence of that.  In fact as we speak, India may just have overtaken the United States as the world’s largest DTH market.

 

What Minister Ambika Soni, Secretary Uday Verma and his team are doing is to create a structured, institutional framework for shaping this big social reality.  More than 25 crore people who have stated their preference for DTH over analogue cable have clearly spoken out that this country is now ready for universal digitization and the current move is merely to create a level playing field.

 

So, to the critics and the cynics who are still wondering whether digitization would happen, my answer is: Look around, it is already happening and the rest of it is bound to happen because even in this country it would be difficult to undo such a momentous shift. To those who wonder how chaotic it would be, my response is that there would be some chaos, but chaos is not necessarily bad if the alternative is status quo or regression.  When a transition at such a scale is happening that affects the illegitimate but strong vested interest in certain pockets, then there is an incentive to put up with chaos in the interest of the larger social objectives.

 

Actually my biggest concern now is a chaos of another kind that we are all set to create by our inaction.  Whether we like it or not, in a few years time, the vast majority of this country will receive its content through digital media – digital cable, DTH, 4G, wireless and internet.  But are we preparing for that? The answer is a big NO.  I worry that while we debate a digital future day-in-and -day-out we are doing nothing to transform or find business models for a digital world. Let’s face it – universal digitization is going to force us to change the way we do business and we are so not ready for it.  We often blame the cable operators and MSOs that they are not ready but I am afraid that even the broadcasters and the content creators are not ready for a digital world.  Are we then setting ourselves up to become uncompetitive and irrelevant?

 

In case you think I am a scaremonger, let me ask a question – we all know how many people DTH services and now a large number of them have evolved services like HD, DOLBY sound and digital video recorder and yet what are we doing differently to service this segment?  DTH has been around now for about 6 years and is there one thing that we as broadcasters or the content community have done that we could point out as an example of a strategy to exploit the new technology?  This is despite an intuitive and an experiential understanding that the behavior and the consumption patterns in DTH homes are significantly different from analogue homes. The data also show that the average time spent on content in digital homes is much more and yet we do not treat them differently.

 

It is perhaps scary how we have force-fitted an analogue broadcasting model into the digital domain.  Is that what we are going to do even after cable goes digital?  I am afraid if the past behavior is anything to go by, we are not ready to offer anything significantly different and therein lies the biggest crisis and risk of a chaos.  We have often spoken about how digitization would enable a multiplicity of niche channels to emerge.  Digitization of TV and even film infrastructure for that matter can revolutionize the way media is consumed in India.  There is enough global experience to suggest that digitization leads to de-centralization, regionalization or localization of content creation and distribution.  Creatively, it is a huge catalyst for innovation and diversity.  Essentially what it means is that with universal digitization the business models of broadcasting which are built on centralized creation and distribution of content and even a centralized advertising revenue model may come under a huge pressure.  I am proud to lead one of the finest media companies in this country and the world and yet I must confess that all of us have built our businesses in an environment where access to distribution was complicated, expensive and even impossible.  That is all set to change. So the big incumbent advantage is set to slowly, if not rapidly disappear. Socially, it is all very desirable because the plurality of this country is very valuable and digitization is a big catalyst for that plurality.  But, are we ready to re-tool our strategies and our businesses?  The cable community is still busy lamenting the potential loss of carriage fees not realizing what an amazing opportunity it has to participate in the local economic boom that is sweeping most parts of this country.  The first phase of digitization that covers the 4 metros will be a huge unshackling of broadcasting and content opportunities.  These are the cities that have crumbled under the weight of analogue frequency limitations.  Just imagine the opportunities that these metros also our economic hotspots present when, from the first of July access to frequency will no longer be a constraint.  So to my mind the MSOs and the cable operators may potentially become a powerful content creator that the traditional broadcasters have to contend with. There may be new creative talent ready to ride this technological transition.  As the subsequent phases roll on, the decentralization of broadcasting is bound to gain enormous momentum.  However, I don’t see anyone trying to race ahead to take a pole position here.

 

Now let’s look at the content and the creative community that I myself am a part of.  But I am struck by our obliviousness to the opportunities and changes awaiting us.  Let me explain this with a slightly different example.  It’s been for a few years now that HD TV sets have been available in this country.  While many people were buying them, their off-take was still low primarily because there was no HD content and nobody was willing to invest in HD content because there were not enough HD consumers.  It was the classic chicken and egg problem.  However early last year, when we at Star launched 5 HD channels with DOLBY 5.1 surround sounds even we were surprised by the rapidity with which HD gained acceptance. Today, in less than a year there are around 25 HD channels. But, I have to admit with a touch of disappointment that I am yet to see an adequate recognition of the potential of HD and a superior sound possibility by my fraternity.  It is a classic case of the old mindsets struggling with a new technology.

 

Are we going to stay locked into this struggle or are we going to create a new generation of television which would be designed for the digital world?  It will require all of us to change.  The creative and broadcasting community has to change their approach to content and the distribution mindset needs to change equally. If you are a cable operator or an MSO -  carriage fees is not the reason why you came into this business and people do not take a connection so that you can earn carriage fees. We are all in the business of delivering best television experience for the consumers and they will be happy to pay for it.  There is enough evidence that people want to consume content and lots of it – but they love it when it is customized to their taste.  Today there is an opportunity to do that and let’s put our heads together to take advantage of that opportunity.  Let’s determine what we require from the Government and the regulator. I have been an admirer of the current information and broadcasting dispensation which I think has shown more vision than any other dispensation in my two decades of interaction with the broadcasting establishment.  However, let me point out that we still need a lot of official and legislative enablers to remove the bottlenecks on this expressway.  For instance, a clear policy to enable multiplicity of beams and splits would be a powerful trigger for proliferation of content and revenue opportunities.

 

I could go on.  But I would like to end by just reminding you of the latest Oscar success from Hollywood – The Artist – which is an amazing portrayal of how a talented and accomplished artist from the silent era could become completely irrelevant because he refused to see that the times have changed. Let’s not try to thwart a revolution which people are crying for.  We will only hurt ourselves.  The question is whether we will lead the change or whether we will vacate the space for a new set of entrepreneurs and visionaries who will replace us.  It is up to us to use it or lose it. Thank you very much.

 

Photograph: Fotocorp

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