He heads the youngest Indian network engaged in general entertainment television. Sudhanshu Vats, group CEO, has, over the past six years, steered Viacom18 India into launching a clutch of new channels catering to the different regions of India as well as niche segments. He has built a rock-solid leadership team to run the services, which have been growing at a rapid clip.

Vats, a former long-serving Hindustan Lever (Unilever India) executive, has also seen the company transition from being a joint venture with global media major Viacom to one which is now majority owned by Mukesh Ambani’s Reliance Industries.

A thought leader in the industry, he is constantly propagating the message that India is rich with media and entertainment potential at both domestic and international confabs. Vats was at the Media Partners Asia-run APOS in Bali late last month. On stage having a conversation with Vivek Couto, Vats spoke freely on a range of topics right from Viacom18, the Reliance ownership, Voot and the pay TV ecosystem in India. Excerpts from the interview.

Your views on the pay TV ecosystem in India?

At one level, the pay TV ecosystem is not developing as well as it should. Partly, all of us, as part of the ecosystem, are to blame. There is lack of addressability. There is lack of customer centricity and customer service attitude with the distribution partners. India being a poor country there will also be a pressure on free to air up to a particular stage.

My view of the country is that it will be a hybrid ecosystem of both pay and free to air. And, in my opinion, both can exist. But for pay to exist, pay will have to earn its right. And as content players, we are concerned because it’s not going the way we would like it to.

Free to air is growing and will grow and we need to find models, largely advertising-led models, to make that happen–that piece is okay. But the pay subscription growths are not commensurate–the addressability is not there. Recognition of change of viewership; change of pattern is not there today.

And I think no better than us, we have leading channels in almost all genres; but our ability to get subscription income is very little. Because it is all dependent on this. Pick up a genre and we have a leading channel. We are not recognising the changes; we are not addressing the customer and not being customer specific.

How is the Indian television ecosystem faring overall?

There were two events in India in the last couple of years—GST and demonetisation. They affected ad sales in my opinion. But the good news is that in the last two or three months, it is coming back. We are clearly seeing certain sectors performing very well—FMCG is back and very strongly. Automobile is back in a reasonably big way. Consolidation in telecom will lead to more telecom spends. Handsets are there, they have always been there. Rural economy is also doing quite well. We are seeing a surge in the regional rural pieces quite a lot within our portfolio.

If you look at Viacom18 per se – I think we have had a pretty good year in FY18, which we closed. We delivered 20 per cent top line growth led by our performance in films as well with Toilet ek Prem Katha. But even in ad sales, we have delivered a mid-teen growth for the year.

And interestingly this has come at a time when our leading channel Colors was slightly muted because of the impact properties on Colors that came in. It’s the portfolio, which we built that has helped us—its regional, it’s FTA, it’s niche. I personally feel, moving forward, the ad sales will rebound to the levels that India has been used to seeing.

The ad market will go to mid-teens and some of the better companies may look at doing even high teens.

How has the change of majority ownership impacted the organisation you head?

The advantage for us with the consolidation with Reliance is two-fold. Ambition and the things we can do is one big thing today. The second big thing is the resources that can come in which could be of a different level. Because, as a joint venture, we were balancing some of those pieces. Now perhaps we can take concurrent bets as we go forward. So that’s fantastic news for Viacom18. We need to continue to motor on what we have built as a culture that is critical for us. So, if we retain that culture and we bring in that ambition and resources, it’s good news.

Your digital piece, Voot, how is that faring?

Voot has been primarily advertising led. The good news here is that we have been growing quite rapidly. We exited March of 2018 at 3X the number we were at March of 2017 on almost all parameters.  So, today, according to App Annie, we are number two in everything which you see after Hotstar. We are number two in downloads; we are number two in active users. We are actually number one sometimes in time spent. We are between one and two in time spent. We have about 35-40 million monthly actives and close to about 45 minutes of watch time.

The Voot service is doing very well. Interestingly, there is a lot of work which we are doing which is tailored for it. If you look at our content: the breakup of our viewership – if I were to give you an order of magnitude – would be about 60 odd per cent of what you have on television – that’s catchup maybe 60 to 65 per cent. About 20-odd per cent or sometimes 20-22 or 25 per cent is what we call Voot exclusives or content around content. So it is content which is running on television, that is the theme is running on TV – especially non-fiction – and there is a lot of content which is not on television which is shown here. That’s gaining a lot of traction. And finally there are originals and kids. That stacks up the full piece.

What plans do you have for Voot?

Our thinking moving forward is that this is just the beginning. It’s an AVOD piece, again advertising is coming in reasonably well from a very small base - we are doubling every year. But what we also do is we’ve built in a freemium layer, for people who are at the higher end where we offer them an ad free environment, maybe additional services—that is the thinking that is there.

The second thinking that is there is that we are going to do something for Voot Kids. That’s a space we are very bullish on. We want to go well beyond video, we want to well beyond watch, we will go into spaces of watch, learn, play and all that. We are looking at the edutainment piece. You will come into it for entertainment, but you will have light gaming, some number of e-books, some amount of learning or options available to you particularly at the pre-school stage. We are not getting into pedagogy or hard-core education. That’s not the space we want to be in.

We are looking four to five million daily active users currently. The kind of data you are seeing now is pretty rich. And we are just about beginning to learn to mine that data.
On the original front, it has been part of our journey. This year you will see us going into overdrive or at least accelerate our originals. You will see a lot more of them in Hindi, you will see them in regional. And as we speak, there is work happening on many of them. We may use some of them to go behind our freemium service as well.

You seem to have changed your mind on sports as a piece of content? Will Viacom18 drive deeper into sports?

We have dabbled a bit in sports. We piloted a few things. We actually did the Nidahas Trophy on our channel. We are looking to see if there is a way of putting sports together that may not have cricket. Cricket, as you may know, is with Uday now. We are continuously looking at areas that might be of interest to us.