Finally the much awaited shakeout in telly land has begun. Facing the pinch, NewsX is the first to capitulate, changing hands in an extremely cluttered environment. As this column has been prognosticating, news channels were ready for a fall. With the slack being reeled in, it was time for something drastic to happen. The new owners, a consortium of investors led by Nai Dunia’s Vinay Chajjlani and Businessworld’s recent Editor Jehangir Pocha, doesn’t seem very encouraging when you think of the environment that they have to operate in. NewsX unfortunately was an ill-fated venture from the very beginning.
There are some things where the stars are crossed and I reckon NewsX was one such venture. Beset with problems from day one, it had to junk its entire top editorial deck and opt for a new one under controversial circumstances. The promoters – Mukerjeas, along with a catalogue of investors – gaining the upper hand in that joust. But the new set-up willy nilly did not comprehend the dynamics of news and that is perhaps the reason why X denoted deficit in NewsX. High carriage fees enabled it to get on platforms, but that didn’t necessarily mean that it was watched. This proved to be its bugbear. And with the operation’s investors grouching over the project from the very outset, it was not a channel which was going to make too much headway. The new team doesn’t inspire confidence, though Chajjlani is in the newspaper business and owns and runs the successful Nai Dunia and Navi Dunia.
But Chajjlani’s core competence is in the vernacular media, and though his interests include Webdunia, the English news market is tough and uncompromising. The logic of the so-called acquisition is baffling. The deal size has been pegged at Rs 50 crore and it only shows that this is a precursor to what can become a torrent in a fragmented industry. INX Media owner Peter Mukerjea is reported as saying that they had to sell because they didn’t have cash to fund the venture anymore. What does that tell you? That the investors led by Temasek pulled the plug and called off funding. A vote of no confidence on the way things were run. Yes, of course. Remember that most of these outfits are being run with someone else’s money. And when the money runs out, it is curtain call.
So, why have the investors cut and run? Doesn’t the news business come with a three-year break even period? What happened to all those tall claims that INX Media was making about bringing us a channel which gets you the why and how of news? Strange that these guys who were busy distributing press releases at the drop of the hat never bothered to inform the world at large about the so-called sale. After all, what did Chajjlani and Pocha buy, other than equipment and personnel. The channel has no identity, no equity and certainly no visibility. Remember, that the same investors and some high profile names there have stopped funding all new programming on 9X. The GEC now only shows reruns. It only goes to tell you that a top flight executive doesn’t necessarily make the transformation to an entrepreneur. Spending someone else’s money and managing your own are two completely different orbits. And running an operation with investor money is a different game altogether. You cannot afford slip ups, or the vulture capitalists will pounce on you. I wonder what the size of the accumulated debt would be as of December 31, 2008. Even in its short traumatic history, the extent of damages would be a handful. An indictment of the management is thus expected.
If the slew of investors has got out, who is funding this operation from hereon? Other than Chajjlani, there is a group of unnamed investors. It has to be somebody with deep pockets. This is not a business for the faint hearted. And Temasek is not one of the faint hearted types. Had the rot set in very deep then? Prima facie it appears so. And then the obvious question, why should Nai Dunia promoter get into an English news channel?
Now, let us come to another tale of woe – also from telly land. Many of the listed guys are facing serious trouble.
Last week, an internal mail sent by NDTV owners Prannoy and Radhika Roy shook up the media frat. Talking about the recessionary environment, it spoke of challenges and preparation to deal with the global and Indian economic downturn. I now quote, “Everyone should be ready to tighten their belts for a while please. This is also a good time to revisit our core strengths of excellence, professionalism and efficiency. Let’s take a pledge to reinforce these values and re-invent ourselves. There are many external factors that we cannot control – but there are many internal factors, intrinsic to our daily lives at NDTV that we can control – we need to reaffirm our command over these and take NDTV to a new and higher plane.”
NDTV has been bleeding for some time now. The last two quarters have been particularly bad. Losses of over Rs 240 crore, and incidentally the revenues are less than that. Which means that – Houston, we have a problem. Mirroring that sentiment, the Roys have decided that the days and age of profligacy are over. So, batten down the hatches. Roys wrote, “The time for complacency is over. Each one of us needs to increase our productivity, our efficiency, our desire to learn and improve. Let us see this global economic crisis as much an opportunity as a challenge: this is the time to streamline our operations, excise any flab that the system may have gained in the boom times and return to being a lean, tough, strong, efficient and compassionate organisation.”
Prannoy Roy is known as one of the best employers, benevolent to the extreme with HR friendly policies. He is also the man who saw tomorrow. Setting up one of the most credible news networks. And if one looks at his attrition rate till recent times, it was probably the best in industry. People are fiercely loyal to him primarily because of his sincerity and integrity. Now he is talking of cutting costs and improving efficiency. He has asked staffers to focus on expenditure. All hiring of new employees has been frozen. And I quote, “There is, you will agree, substantial flab too at NDTV (some people work very hard, while others seem to be floating along). No more ‘floaters’ should be accepted – it’s unfair on those who work.”
Now comes the scary part – as a first step, many in NDTV’s senior management have volunteered to take a salary cut of 20 per cent for the year 2009, as well as ensuring other expenditure is curtailed too (for example, any upgrades to business class will be from each person’s personal account). The daily allowance for personal expenses during all travel in India will based on actuals (capped at a maximum of Rs 500 per day), and internationally too, the daily allowance for each region will be rationalised.
Things must be very bad. My heart goes out to Dr Roy, for he always paid best of breed salaries and looked after his employees. I wonder what happens to NDTV Imagine and Lumiere. Yes, Dr Roy raised money abroad and did a deal with NBC, but in this environment, the only way to survive is by narrow focusing. What happens to NDTV Metro Nation and NDTV Good Times? Let us not forget that Imagine and Lumiere aren’t exactly flying either. As I finish writing this, I hear that a couple of other telly outfits have problems galore. Moths to a flame, I guess.