Year 2006: How did you come about the idea of a TV channel, how did it happen?
Like all of life.s most important decisions, most of them are accidental. I always had television as a hobby in school and college, I always loved watching Doordarshan. I did my MBA and my first job was AF Ferguson in the consulting side. After which I joined American Express, but I kept my little television thing going as a hobby. There was no money and one could not make a career out of this hobby, Doordarshan used to give Rs250 for anchoring a show . e.g. Youth Forum.
Those days a new video magazine was launched by the India Today group. And that was the first time one could make a living out of television. They were paying you as much as they were paying journalists. A couple of years after that the whole satellite television revolution happened. CNN came in 1991 and the war was covered and satellite TV as a concept arrived, it was very clear to us then, that for a country like
So many things happened together which concluded in my starting this business. Starting with me quitting my professional job, then the launch of satellite television, then the realisation of the importance of the local content etc led to this business.
How much money did you invest to start your own business? Did you start on your own, or you had people along with you?
When I moved out of the job, I was clear that I am not going to take up another service job. So I started off as a professional or self employed. It was always a loose arrangement and from News Track we moved to Business India TV with Ashok Advani of Business India group. And the entrepreneurial journey began. One person who started off with me was Sanjay Ray Choudhury.
We made pilot programmes, I invested all the money that I had on my own - about two or three hundred thousand rupees in making two pilot shows. Both got selected - one went on BBC and the other was on Star Plus. Both were the first programmes out of
Acceptance of the two shows led us to our first Venture capital investment. I remember we got a valuation of Rs70 or 80m rupees at that time and we raised some money. Next placement was at valuation of Rs 200-250m. Then another placement was made at valuation of Rs 600 to 700m.
From 1993 to 2005 what were the biggest challenges that you faced?
The biggest challenge is always the first few years. If you can survive the first few years then it keeps on getting easier. The biggest challenge again is the resources, if you don.t have much capital you can.t attract talent. You can attract only those who can believe in you personally and that can.t be more than 5 to 10 people.
It is much difficult running a Rs10m revenue company, than running a Rs 10bn company. Because nobody is wiling to back you, you don.t get a bank loan, you don.t get the best talent, yet you are competing with the big boys.
The first five or seven years you face big challenges in a new company. And I think people like us who don.t have family background of business do not understand concepts of valuations, equity financing. Yes I am an MBA, but you don.t learn much in the classrooms. Though it teaches you about balance
sheets and cashflow, it does not teach you about equity dilutions etc.
So how did producing TV content move into becoming a TV channel?
Till 95/96 we were a content production company. And we took the decision to become a broadcaster, not because there was a problem in content production but more as an opportunity. The decision of moving into broadcasting was the most significant decision taken. In 95/96 after being four years in content production we emerged in business news space as people who were doing good work. Our BBC show did manage to create lot of
goodwill and created a lot of impact.
However, increasingly it became clear to me that if you want to be in a news space you cannot only be a content producer. So I told our shareholders that we have to give up our BBC deal, I had to do a joint venture with CNBC but since it is a broadcast JV we will be running all the risk as there will be no annuity revenues coming in.
At that time, some share holders pulled out, some directors were very unhappy. Everybody said . .look at the competitors - they are all content people and no one is talking about becoming a broadcaster. Those guys have got much stronger balance sheet than you.. But I said that it.s not a matter of balance sheet, either we get out of the content business because I tell you it will die.
It was also very clear to us that in content margin are going to be very low. If you are not creating IPRs you will be a 10% player. You will earn only 10% margins. You want to be all your life in a business where clearly your budgets will come down, your revenues will keep coming down, because there are no
entry barriers.
That was our biggest decision, we broke up with BBC and we formed a JV with CNBC, and made our tentative steps into broadcasting and it took three to four years before that model evolved.
When did you decide to launch the general news channel IBN?
I think it was somewhere in 2003/2004. English news was a beautiful opportunity sitting for us. We already understood the product in CNBC; we understood the advertising and the consumers of English news channel. There was only one other English news channel - NDTV 24/7 - a entire Rs1bn market dominated entirely by it. So it was a monopoly market waiting for a good second player to enter. It made a lot of sense for us. Opportunity crystallised with the coming of Rajdeep.
CNN-IBN has taken off very nicely. We have ratings for one week and we have already captured 50% of the market. So, the first feed back is that it has already entered the consideration mindset of the people.
Instead of coming out with another channel why not a newspaper?
We believe that opportunity is in the Satellite TV space. After being successful with CNBC, our natural extension was to get into Hindi space. We wanted to cover the entire spectrum - we covered Hindi with Awaaz. I have absolutely no doubt that in three to four years that Awaaz will become one of the most valuable properties. It a completely pioneering effort it is an unchartered market. We have created the market for business news in Hindi.
What are you near term focus areas?
www.moneycontrol.com is something that we are very consciously scaling up. This is the interface between media and internet that we believe is going to be become really powerful. We just announced delivery of CNBC on video on mobile. As information players on television, internet is the next big opportunity.
We don.t want to get into general entertainment, because that is not in our genes. And we don.t want to be a 10% margin player where the broadcaster dictates terms.
Are you a dreamer or a detailed planner?
Every entrepreneur calculates a lot. One of the best definitions of an entrepreneur is that he is a risk minimiser, not a risk taker. He will take risk because it is in his DNA, but he is a minimizer. He will do every thing possible to minimize it because he wants to survive in the market. On the spectrum of risk taking, there will be some people who take more risk and some who take less risk.
How far ahead do you plan and forecast. One year? Three years? 10 years?
In all honesty the next 12 months is all we can plan for and forecast. The rest are all aspirations and dreams of where we want to be. Also, all the decision are evolving - so it.s difficult to plan for the long term. When we cross some basic milestones, only then can we plan for the future. But for the next 12 months, we have a fairly strong degree of conviction on our plans and projections. We have detailed projections of cashflows, investments, returns and profits. For the next three years we have a reasonably broad sense
of where we are. But beyond that, it.s difficult to plan
.
In this media business lot of people put pressure on you . of various kinds to do various kinds of things. How do you handle this?
In this media business, it is how you conduct yourself. In this last ten years, I did not have any pressure; I am not saying this with any sense of false bravado. I am not trying to be sensational. No industrialist has ever picked up the phone to tell me that what you are doing is not right and that I should drop it. Its one of those things I keep reading about advertising pressure. .Nobody has done it. Maybe I do not meet them at parties, maybe I am too
reclusive, maybe they understand that there.s no point.
It is said that Indian entrepreneurs don.t think big and get satisfied quite easily. What are your views?
Culturally you might have a point. The same question I asked myself, why do we get satisfied too quickly? I haven.t yet come to a full answer, maybe we do. Maybe we are self limiting in our ambition. Also may be, we are coming from years of control. Unfortunately, our business is still so much in control. There are regulatory approvals required for everything On the other hand, we do see that our children are much more aggressive because they have been a part of free enterprise
What motivates you?
Money is certainly needed, but only up to a threshold level; money is the raw material for further growth. I am very reclusive person socially - I don.t have much needs. But, I do like to live well and I am not a saint in that sense. However, it.s never been that if I come to office I don.t have a new project in my mind. If I don.t have any new project in my mind, then it.s very boring to come to office.
What is your role in the organisation?
I wear two hats - as an editor I am very online and operational. I like to do it because I believe I do it well - that is my operative role. The other is entrepreneur in the company, which is entirely strategy, finance, and communication to the world.. So firstly, I have an editorial operating job, which could have been done by
someone else but I do it because I like to do it and I believe I am good at it. Nothing goes through me, but as a friend/philosopher/guide/mentor I just keep a watch on it.
I believe I bring little value to other commercial operations in the company. I am zero at brand building & marketing and leading commercial operations. Our CEO is better than I am.
Who are your role models, if any?
The one role model that motivates me is the line I came across while reading the life of JRD Tata. He was asked how do you manage so many businesses, he said I have just one philosophy . .I just surround myself with the best people and set them free. - that line has stayed with me. He said that.s how so many business have come up otherwise I could not have done it alone.That line is a role model line for me. There are plenty of role models, like Narayana Murthy is a role model for a lot of people . just the amount of wealth he has created. And Dhirubhai Ambani.
I don.t think the world has seen an entrepreneur better than him, and I think,nobody has said a bad thing about him - from a vendor, to a supplier, to the shareholders.
Do you read books?
Very few. I used to read a lot when I was in college. I have started reading them again. But now I like to read nice, light, pulp fiction. I like watching Amitabh Bacchan and variety of Hindi films . nothing heavy right now.
If you had to change one decision that you have taken in the past ten years, what would that be?
I would have seriously structured the capital of this company much better. I am struggling with the fact that I have 26 to 30% of this company. At this stage, increasing the share holding is much more difficult.
Source: CLSA
10/Dec/2006 at 8:33pm
First past the post
In the mad race of news channels, TV 18 is charging ahead. And the man to watch is Raghav Bahl, says Shuma Raha
In 1999, a fire destroyed the offices of TV 18 in Kalkaji, New Delhi. Raghav Bahl, managing director, promoter and prime mover of the company, immediately ordered the entire operation to be shifted to his own home. “There was no other place,” says Bahl. “We didn’t want to miss broadcasting even for a day. Everybody worked overtime to set up the studio and CNBC TV 18 went on air with its programme as usual.”
That can-do, come-let’s-beat-the-odds spirit characterises Raghav Bahl as nothing else does. The 44-year-old businessman and sometime television anchor has powered TV 18 from its somewhat rocky beginnings to such a position of strength that today it is considered one of the foremost players in India’s burgeoning media space.
Sitting in TV 18’s swank offices in Noida on the capital’s outskirts, Bahl — dapper and urbane — looks pleased with the way things are shaping up for his company. And with good reason. With four 24-hour news channels under its belt — CNBC TV 18 (English business news), CNN IBN (English general news), CNBC Awaaz (Hindi business news), and IBN7 (Hindi general news) — TV 18 now occupies the top spot in the television news category in terms of the number of channels. That’s not all. According to the latest TAM viewership ratings, CNN-IBN, launched just a year ago, has raced ahead of its other competitors and is now running neck-and-neck with NDTV 24X7, the stalwart in the English news space. CNBC TV 18 and CNBC Awaaz too are clear leaders in the English and Hindi business news categories, respectively.
Bahl is a bit of an enigma in the media. He maintains a low profile, and few outside the industry connect TV 18 with this man with a heavily receding hairline. There are those who call him ruthless and autocratic, and some say that he is by no means an easy person to work with. But Bahl has little time for such criticism: there is, after all, an empire to be run.
Indeed, these are heady days for the entire TV 18 group. The company is on a brisk expansion mode, foraying into a plethora of media spaces like film production, e-recruitment, e-travel and e-commerce. Earlier this year, it picked up a majority stake in JobStreet.com, it has a strategic stake in the travel portal Yatra Online and has several other Web businesses, including its flagship portal moneycontrol.com. Apart from ramping up its presence on the Web, the group is set to launch a home shopping channel on television this month. It even acquired wire agency Crisil MarketWire last month to get a foot into the data terminal business.
So how does it feel to have transformed TV 18 from a single channel unit less than 18 months ago to what is now a fast-growing media conglomerate straddling news broadcast, Internet platforms and the entertainment business? “Good,” says Bahl, with a smile. “But you have also got to remember that these are extremely opportune times — I call it the gold prospecting times of the Indian economy. So you’ve got to be paranoid about your growth, you’ve got to move very fast, otherwise you’ll miss out on opportunities.”
That shouldn’t worry Bahl much, for he’s always had the knack of seizing Fortuna by the forelock, as it were. The economics honours graduate from St Stephen’s College, Delhi, who dabbled in Doordarshan’s brand of television from his college days, was quick to see the colossal and hitherto unimagined opportunities that satellite television offered. “When satellite TV came to India in 1991, it was very clear to me that this was a huge force that was here to stay and that we would need local content to feed it,” says Bahl.
That was when he decided to embrace the media business full time. In 1993, he set up TV18 — “18” is a lucky number for him, he reveals — along with a co-promoter named Sanjay Roy Choudhury, who is on the company’s board even today. Bahl’s only investment in the venture was the Rs 50,000 that he had drawn from his savings bank and which went into the making of the pilot projects for India Business Report and The Amul India Show which TV 18 did for BBC World and Star, respectively.
India Business Report on BBC, the weekly show that Bahl anchored himself, went on to become a success. But he soon realised that it was simply not enough to be a provider of content — the way forward lay in broadcasting. The leap of faith, from content producer to broadcaster, came when the Singapore-based Asia Business News (ABN), a Dow Jones company, offered TV 18 a broadcasting partnership in 1995. “Not many people realise that we were the first television producer to become a broadcaster,” says Bahl.
The journey so far hasn’t been all smooth sailing, though. There have been hurdles on the way and crises that have loomed up and threatened to knock the bottom out of what was then a fledgling media enterprise. One such critical moment came in 1998 when ABN merged with CNBC. “The joint venture between TV 18 and ABN came to an end and CNBC TV 18 was born, where we became a brand and corporate franchisee of CNBC,” says Bahl. Had that deal not materialised, TV 18 would have been in dire straits and left with huge losses as it simply did not have the wherewithal at the time to become an independent broadcaster.
Today, sitting atop a Rs 300-crore media empire, Bahl is fairly gung-ho about the prospects of India’s electronic media. The coming of the Conditional Access System (CAS), direct-to-home (DTH) television and Internet Protocol TV (IPTV) will, he feels, energise and transform the medium like never before. “As I see it, there have been three waves in Indian television,” says Bahl. “The first was when satellite TV came in. The second took place when cable TV reached 40 to 50 million households and we moved from omnibus channels to niche and special interest channels like music, sports, etc. Now we are witnessing the third wave where, because the government is allowing competitive forces to enter the market by way of CAS, DTH, IPTV, etc, our industrial structures will finally begin to approximate global structures.”
A spin off of that could be greater revenues flowing in from the distribution end of the business. At present 90 per cent of the revenues of Indian TV channels come from advertising although globally, the share is about 50 per cent from ads and 50 per cent from distribution. “I am not being so bullish as to claim that we’ll double our revenues as a result. But it will happen by and by,” he says.
As far as his own channels are concerned, Bahl is confident that IBN7, which is the only laggard in the TV 18 pack, will fight hard to take on the challenge in the fiercely competitive Hindi news space. And the next move would be to venture into regional channels. “That’s the logical step forward,” he says, although he refuses to divulge any details on that front.
Bahl’s associates call him a “visionary” — a man who can read the future and reap its promises. Those who have fallen out with him claim that he can be ruthless when he wants to be. But, clearly, everybody admires his ability to lead from the front. Says Paranjoy Guha Thakurta, director, School of Convergence, Delhi, and a former anchor on CNBC TV 18, “He has a tremendous ability to enthuse people.” Adds Malvika Singh, publisher of the monthly magazine Seminar and Bahl’s colleague in India Business Report in the early 1990s, “He is extremely hardworking and has a professionalism that is rare in the television industry. He may have strong opinions but he is not opinionated.”
His professionalism and the way he has instilled it into the ethos of his channels is something that Ashish Kapoor, a Delhi-based stock market analyst, also admires. “His marketing skills and his ability to grow aggressively are to be emulated,” says Kapoor.
Today, Bahl is content to step back and let the few good men and women who run his channels and businesses take the group forward. He believes in the mantra that unless you vacate spaces and empower people, they will not deliver and the organisation will suffer as a result. “I used to be completely hands-on in the 1990s. But now I am there more as a friend, philosopher and guide. I am involved with all the strategic decisions of the company, but operationally, our CEOs and editors have an absolutely free hand.”
That is perhaps why he gets to spend more time with his family — his wife, his 11-year-old daughter and five-year-old son. But though he may not be physically in office for long hours, he admits that thanks to technology, he ends up being “engaged” with his work close to 15 hours a day.
“I consider myself an intellectual entrepreneur,” says Bahl. “What attracted me to the media business in the first place was that the product was intellectual and that it had tremendous entrepreneurial possibilities.” Bahl has certainly made good many of those possibilities. But as he’d be quick to tell you, the best is probably yet to be.
Growth story
TV 18’s New Ventures
Launched a new company, Studio 18, earlier this year to foray into the motion picture business.
In April 2006, picked up a majority stake in e-recruitment portal JobStreet.com.
In November 2006, announced the acquisition of wire agency Crisil MarketWire.
In November 2006, signed an exclusive distribution deal with Australian Broadcasting Corporation (ABC) to bring its free-to-air infotainment channel Australia Network to cable homes in the country.
A home shopping TV channel to be launched later this month.
Plans to launch regional channels.
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