Achi news desk-
(Bloomberg) — On a breezy April evening around 45,000 Indian Premier League cricket fans are packed into the Wankhede Stadium to watch the Mumbai Indians take on the Rajasthan Royals.
Elsewhere in the city, hundreds of employees of Viacom18 Media Pvt. on a different mission, broadcasting the game in 12 languages and 20 camera angles across the world’s most populous country.
“We are targeting over 600 million people to come and watch,” said Uday Shankar, the executive behind the effort.
Viacom18 and its streaming service JioCinema, once an underdog overshadowed by foreign behemoths, were poised to become the most powerful player in India’s $28 billion media and entertainment industry. Reliance Industries Ltd., Viacom18’s largest shareholder, has plans to merge the business with Walt Disney Co.’s operations. in India, adding dozens of cable TV channels and tens of millions of streaming subscribers in a deal worth $8.5 billion to the combined enterprise.
With everything from local news to Hollywood blockbusters, the new company aims to capture not only a larger share of TV ad sales, but the growing digital revenue that now goes to tech giants like YouTube and Meta Platforms Inc. Viacom18 could also become a broader rival to Amazon.com Inc. if it follows through with plans to integrate e-commerce into its streaming platform.
Shankar, the 61-year-old executive who will lead Viacom18 as vice chairman, is a media veteran. A former journalist, he helped turn Star India into a valuable asset for the Murdoch family, who sold their entertainment assets to Disney in 2019. Now he is overseeing the group’s buyback of that business. His role as a bridge between Hollywood and Bollywood will make him a key player in the media strategy being implemented by Reliance, a company with interests from energy to telecommunications.
“He is one of the most talented media executives in the world, not just in India,” said James Murdoch, who partnered with Shankar at Bodhi Tree Systems, an investment firm that owns a piece of Viacom18. “Uday has a great track record of being able to move businesses forward, and we’re excited to see him continue.”
India is not a market where others have been able to progress so easily, despite the country’s economic growth.
For example, Disney acquired a major business there when it bought 21st Century Fox’s entertainment assets in 2019. But expensive bidding wars for cricket rights and $1.28 a month in revenue per streaming subscriber have made profitability difficult to achieve. In an attempt to bulk up, Sony Group tried to merge its Indian business with local rival Zee Entertainment, only to see the deal collapse earlier this year.
Backed by Mukesh Ambani, Reliance’s chairman and Asia’s richest person, Shankar thinks he can achieve a different outcome, building a profitable streaming business largely by offering ad-supported programming. It helps, he says, that he was born and raised in the country.
“India is like a continent,” he said in an interview in his office in Mumbai’s southern port district. “A lot of people have come in and found it difficult to build a big business, but for us, we’re from India.”
Among its boldest bets, letting cricket fans stream the premier league for free on JioCinema, a move that attracted 449 million viewers and more than 17 billion viewers last season. Shankar is offering free IPL live streaming again this year.
The aim is to develop the market for mobile streaming in India and especially the associated ads, as most of the company’s customers subscribe to the ad-supported version. Digital ad revenue comes not only from the English and Hindi population, but also from regions with their own languages and buying habits.
Sports streams managed to gather 70% of their viewers from small towns last year, and most of the viewers were in the 18 to 44-year-old demographic that advertisers craved the most, according to a report by consulting firm EY. And while advertising in India’s $4 billion traditional TV market is shrinking, the digital advertising market is projected to more than double to about $20 billion in the next five years, Shankar said.
“You need to make sure that digital offerings are available to the smallest of the small advertisers,” he said. “That’s the model we believe in.”
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All of this takes work of course. Back at the newly opened Viacom18 production center, engineers in a huge control room monitor screens on multiple platforms to spot faults and fix them in seconds. Separate screens receive a live feed of viewer consumption. On top of the studios, a huge data center supports the video streams, all part of Shankar’s obsession with the product.
“He spent 80% of his time on technology just to make sure we have a service that doesn’t crash,” says Prateek Garg, managing director of Bodhi Tree affiliate Marigold Park Capital.
Growing up in a small rural town in India, Shankar studied economic history with the aim of learning how to influence Indian society. He found that journalism was the closest answer to his career goal and joined the Times of India as a political reporter. He later became one of the founding editors of a New Delhi-based environmental magazine, Down to Earth. In 1991, he was surprised by CNN’s live coverage of the first Gulf War.
“It blew my mind,” Shankar said. “My wife was frustrated with my obsession with television and said to me, ‘Instead of watching it, why don’t you go do something?'”
He landed his first network television job and spent more than four years building a 24-hour live news channel called Aaj Tak before joining the Murdoch family’s Star News as chief executive officer in 2004.
“One thing I knew as a journalist was that I knew who was a good expert and how to go to that person and ask the right questions,” says Shankar.
The journalistic skills helped him transform Star News, and his work stood out. In 2007, he took over as CEO of Star India, Chairman Rupert Murdoch’s choice to lead the company’s entire operation in that country.
“It gave me the license to make mistakes because I wasn’t experienced,” says Shankar. Fox’s corporate DNA was “go create the market and then you make money in the market.”
India had just started rolling out 3G wireless service and had almost no Wi-Fi or broadband access. Shankar’s team started building a streaming platform called Hotstar and went to every telecom company, begging for partnerships.
“They all rejected the idea and it was one of the most humiliating experiences I’ve ever had,” he said.
The efforts finally paid off after Hotstar offered the International Cricket Council World Cup for free in 2015, with the catchphrase “come on TV”.
It was the start of a digital revolution, with Reliance Jio Ambani’s telecom business launching a 4G service with free data plans. The two Indian businessmen joined forces to jointly market Hotstar and Reliance Jio, which has since become India’s largest wireless carrier with 471 million subscribers.
Shankar rose to president of 21st Century Fox’s Asia business in 2017, overseeing all of the company’s operations in the region. By the time Fox sold its assets to Disney two years later, Star India’s value had grown to around $15 billion. Disney CEO Bob Iger gave Shankar the top job in Asia, spearheading the launch of its Disney+ streaming service in the region.
Shankar felt more comfortable in an entrepreneurial setting and teamed up with James Murdoch, his old boss at Star India, to form Bodhi Tree. $1.5 billion was raised by the Qatar Investment Authority and others to invest in media deals including Viacom18 and an education technology startup.
Under Shankar’s leadership, JioCinema has been licensing films and television programs from major Hollywood studios including Warner Bros. Discovery Inc., NBCUniversal Comcast Corp. and Paramount Global, which is selling its 13% stake in Viacom18 to Reliance.
Disney’s lucrative library will soon be part of the merger. The new company will have more than 100 TV channels and two streaming services, capturing around 35% of India’s total TV viewers and 45% of the premium video streaming business, excluding YouTube and Facebook.
It’s not just movies and TV that come from Disney. The combined entity will also have IPL rights, along with television and digital rights to the International Cricket Council’s Cricket World Cup, part of a sports package that will cost around $2 billion annually, according to a person familiar with the matter. matter.
Research firm Media Partners Asia estimated that the combined businesses lost about $200 million on sales of $2.8 billion in the financial year that ended in March. Profitability in the traditional TV entertainment business was overtaken by the red ink in sports and streaming.
“The overall business will make a loss but if you bring the combined cost structure together, they will have more synergies and bargaining power,” said Media Partners founder Vivek Couto. The digital advertising revenue will continue to grow along with the growth of the Indian economy over the next five years. “After the hard work is done, let’s say in 12 to 24 months, they should become a fairly profitable scale business,” he said.
Apart from capturing multilingual sub-markets, JioCinema aims to build its business around the cricket experience, starting with the sale of mobile emoji packs featuring IPL cricket stars. It’s a first step to get consumers familiar with digital wallets, said Marigold executive Garg. Viacom18 hired Google veteran Kiran Mani to build the mobile business.
Its content strategy is opposite to that of Amazon and Netflix, which are pumping out big budget series in India. Shankar’s strategy is to produce cheap 30-minute soap operas every day to capture the audience and boost daily active users, a key metric in digital advertising. Ultimately, that online viewing will replace traditional television.
“I’m a big believer in change,” says Shankar. “Sometimes it can be uneasy, it can be difficult, but ultimately, I believe it leads us all to a better place.”
– With the help of Bhuma Shrivastava.
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