‘Self-regulation among broadcasters doesn’t work,particularly when you have so much content available’

Subhash Chandra: I had to take up the family business of commodity trading. The family had lost all capital; trade in foodgrains and cotton was a very volatile trade. My grandfather said to me,do whatever you want to do,but don’t get into the cotton trade. They had lost all their money in that. So I innovated a new concept which I sold to the Food Corporation of India (FCI) whereby it would procure grains other than wheat and rice for a farmer support programme and store them. After storing them for a couple of years,they would sell them to the traders. The Indian Army used to buy such products,so I suggested FCI supply these things to the Army directly rather than selling them to the traders. They said that the Army specifications were stringent and that they could not meet them. To which I replied,we’ll supply all the foodgrains to the specifications and you give us the labour charges. We did that for at least four years. That gave me some capital to start thinking about other businesses.

During 1974-75,a bumper crop period,there was no storage space. So,we created a plastic/polythene storage space for them with black polythene sheets. That introduced us to plastics and that’s how Essel Packaging was born. Essel Packaging was a new concept: at the time,there were 50 aluminum tube suppliers in the country. When I went to Hindustan Lever,they asked,“Why should I change to your tube?” Since I was the only source of supply,they’d have to invest more in their equipment to change the tube. But one Indian company started using our paste,they were new. Once that caught on in the market,the others were forced to change. Today,we produce 8.5 billion tubes a year and supply to the US,China,South America,Europe. There’s no territory where we are not supplying these tubes. Every third person on the planet uses our tubes while brushing their teeth. Once that company was on its own,I handed it over to my brothers to run. I was unemployed and so we set up an amusement park,EsselWorld. The land had been purchased much earlier in 1981; in 1988,we wondered what to do with it since it was within BMC limits. So we set up an amusement park in a no-development zone. I had a lot of difficulties with the state government,they had no rules or regulations on running or setting up an amusement park. I wanted to put up a haunted house,they disagreed,saying that it was a “construction”,a building! We wanted an ice-skating rink which was cancelled for similar reasons. Then they imposed a 150 per cent entertainment tax. In the first year of operations,only 1.5 million guests visited the park,instead of the three million we expected. So we did a market survey and found out that people wanted entertainment,but closer home. How do you get entertainment closer to the people?

We also wanted to create another bridge,over and above what the newspapers were doing,to bridge the gap between the governed and those who govern. Both these reasons led us to put up transmitters at the Nepal border and some barges below in the sea to beam TV programmes; we had 560 vans across the country. All these ideas came to nothing much. Then someone suggested that satellite television was the answer—that’s how we started. When we started,we were “illegal” as it was an illegal transmission. It was only in 1996-97 that the legislation came. The legislation is half-hearted,a lot of gaps in the broadcasting industry remain in the way it should be and the way it is. The way the industry is currently structured,there are a lot of structural weaknesses in it. Still,the industry has grown—from $400 million in 1992,it’s about $13 billion today. It could grow up to $50 billion but structurally,it has to be rectified. That’s the story so far.

Archna Shukla: Apart from broadcasting and entertainment,you’re into distribution,cable operations,DTH,the satellite business. You’re also involved in power plants,parks,real estate,packaging,gold refinery. Which is the one area that excites you the most,that has growth potential?

Subhash Chandra: Profitability is a relative term. My philosophy has been that one has to set a benchmark in a particular industry,like gold refinery,for example. If you’re able to get 1.5 per cent profit there,it’s a great benchmark. Refineries around the world do not make more than 1-1.5 per cent in profits. I would say,you should be no.1 in that industry’s profit-making. So to say which business is the most profitable is an unfair question to the business. The maximum profit still comes from the real estate business. That’s the nature of the business. Where am I spending most of my time? My job as the head of all the businesses is to go wherever there is trouble. You concentrate there,fix it,and move on. I think about new businesses and new areas rather than getting involved in the day-to-day operations.

Archna Shukla: Do you see yourself as a media entrepreneur,a commodity businessman,or an entrepreneur who looks for opportunities? Who are you,essentially?

Subhash Chandra: I would like to call myself an entrepreneur who’s able to spot an opportunity and then later on,spot the trouble and know how to fix it. Today’s television industry,as a whole,is losing Rs 5-6,000 crore a year. But we are a profitable media company,and there are only a few who are making money.

Archna Shukla: You are the pioneer of the private broadcasting business in India,but today Zee is not among the top three channels.

Subhash Chandra: You’re looking at Zee only as Zee TV,whereas Zee as a network runs 30 channels. And the aggregate of that shows it is still the No.1 network in the country,even in terms of aggregate viewership.

Shekhar Gupta: How tough is the TV market? Some channels have stolen a march on you. Are they spending more money,are they less profitable?

Subhash Chandra: It is a tough,competitive market. As in any and every market,nothing is permanent. Today,you are No. 1,tomorrow you can be No. 3 and back to No. 1. There are many TV channels and it would be unfair for me to talk about competition,why and how they have grown. For the record,I’d say it’s like an ODI,a daily game,someday you win and someday you lose.

Shekhar Gupta: Do you believe in TRPs?

Subhash Chandra: They are faulty. Everyone says TRPs are faulty but no one is doing anything about it.

Archna Shukla: What is the problem and how can it be fixed?

Subhash Chandra: Basically,if I know that in Delhi there are 200 (viewership monitoring) meters and as a broadcaster,I know 60 homes which have the meters,I just go and “fix” them. My ratings become very different.

Ashish Sinha: Do you support the need for a separate broadcast sector regulator? Currently,the telecom regulator looks after broadcasting.

Subhash Chandra: Certainly,I demand it. We’ve written to the government that there should be a separate regulator for broadcasting.

Ashish Sinha: Any favourable response?

Subhash Chandra: If there had been a favorable response,the broadcast sector would have been totally different. At different points of time in their careers,many ministers have agreed to a separate regulator but nothing has happened.

Archna Shukla: Your one venture that did not succeed was the cricket league you started,the Indian Cricket League (ICL).

Subhash Chandra: I wouldn’t say that I was not successful—we did only three seasons. In season 1,we recovered 5 per cent of the costs,in season 2,we recovered 30 per cent of our costs and in season 3,we recovered over 70 per cent of the costs. BCCI felt threatened,it called up the sponsors,Indian and international players and foreign boards and said the players should be barred from playing in ICL. Actually,in my 40-year-old career,it was in ICL that I saw true success without much of a hurdle. When we launched Zee TV,in the first year,everyone said it would not work. In Essel Packaging,we struggled for four years,in the amusement park,we struggled with so many things. But this one was very successful.

Dilip Bobb: For anybody in the media,Rupert Murdoch is this mythical figure. What was it like dealing with him?

Subhash Chandra: It was normal for me. I know you won’t believe it but I think it was a forced marriage (between Zee and News Corporation) which had to break and it broke. Personally,I liked him and respected him very much. He’s very sharp,very shrewd and even today we meet. There is mutual respect.

Shekhar Gupta: Do you like being described as “India’s Murdoch”?

Subhash Chandra: No,I don’t like to be described as anything. I want people to say,Subhash is Subhash! That’s all.

Srinath Rao (student,Exims): After you discontinued ICL,why did you not attempt to buy a team in IPL?

Subhash Chandra: We are creative people,we create ourselves. We do not go and buy created things. This is what I told Murdoch as well. I said,you have grown because you have acquired. You have grown inorganically. Whereas we are growing organically,we are creating ourselves. And when you create things yourself,you grow slowly.

Archna Shukla: What explains IPL’s success? Was there something that went wrong when you launched ICL?

Subhash Chandra: IPL had the backing and the money of BCCI and the regulatory authorities. Also,ICC,the body that controls cricket in the world,was against us. It’s like asking,how can I succeed in anything if the Government of India is against me? I cannot.

Unni Rajen Shanker: So you didn’t anticipate such a response from BCCI?

Subhash Chandra: No,I didn’t. I thought I was helping them. ICL would have been helpful to them to create a bench strength for the future. They have taken at least 12 players from ICL into IPL. So,isn’t that a success? That’s what we could have done—taken all the youngsters,trained them,exposed them to the whole thing and if BCCI wanted them,they could have taken them.

Shailaja Bajpai: There’s a debate on between having an independent regulator for broadcasting or going with self-regulation. You said that there should be some kind of regulation,but what do you favour?

Subhash Chandra: An independent body. I’m not in favour of the government regulating the broadcasting industry in terms of its content but I certainly feel there should be an independent regulator to regulate the content. Self-regulation doesn’t work in today’s environment,particularly when you have so much content available. The content creators may go haywire and create such content which is not watchable. You want a regulator who can write a programming code,who can spell out the dos and don’ts of programming. Just now,there’s no such body to do that.

Shailaja Bajpai: You also said the broadcast industry could grow even bigger and better but for structural obstacles. What are the obstacles you were referring to?

Subhash Chandra: Today,for example,in the television space,worldwide,you get almost 30-35 per cent revenue from advertising,60-65 per cent from subscription. But today’s Indian market is a non-subscription market. Even when you have a dish,cable or a DTH at home,you pay for the service,not for the content. Whereas the pay market means you pay for the content. We have now started Zee Khana Khazana as a channel which is not available within the bundle services,it has to be paid for separately—that is a pay market. Of the subscription money spent by the consumers just now,only 8-10 per cent comes to the programmers. There isn’t money available with the programmer to make quality content. For the last three to four years,the quality of the content and everything else has come to a standstill or has gone down.

Archna Shukla: The new chairman of Press Council of India (PCI),Justice Katju,has said that news broadcasters should be brought under the PCI’s ambit. Your views?

Subhash Chandra: I don’t know whether it should be under PCI or not,but I’ve already said that there should be an independent regulator for programming,whether it is news or entertainment channels.

Rakesh Sinha: Which is the one sector you still think you need or would like to explore?

Subhash Chandra: I have been very fascinated with the nuclear power sector. But after what happened in Japan,I studied it a lot. Many countries are stopping nuclear power generation,so I decided against entering the field.

N P Singh: Since you have an insight into the commodity business,do you think FDI in retail would affect the trade?

Subhash Chandra: My experience is on the commodity side,so it’ll be unfair for me to comment. My feeling is that retailers in India cannot be wiped out; the kind of service they provide,the big multinational won’t be able to.

N P Singh: It has been said that there’s enough production in commodities,but there has been hoarding by the commodity traders.

Subhash Chandra: That is not a correct analysis. The problem in our country is of high prices. If you look at what the farmer gets and what the consumer pays,there’s a huge difference,a 300-400 per cent difference. The problem is the lack of infrastructure in agriculture. Storage,transport,packaging,fumigation,the maintenance of the quality of the product,from the seed stage itself. Produce that should be up to 10 tonnes an acre,yields only 4 tonnes. If the government does something in this area,it’s going to be a big,big sector.

Archna Shukla: Do you want to go into the newspaper space?

I can do a lot of better things than being in the newspaper business. It’s a tough business to be in.

Transcribed by Prajakta Hebbar