Piyush Sharma is a global Tech, Media and entrepreneurial leader with a reputation for value creation and catalytic growth - across large billion dollar enterprises and start-ups. As CEO – New Initiatives – he created the successful factual entertainment foray of $1 billion Zee Entertainment in India and Asia Pacific region and successfully spearheaded their digital commerce foray in India.
Worldwide, the business of broadcast is typically categorised into three verticals: the entertainment piece (GECs, English, Hindi, Regional, Music and other entertainment), the News & Sports piece (mostly events driven and current affairs driven) and the Factual Entertainment piece.
Factual entertainment comprises the ‘lifestyle’ entertainment and ‘Information & Knowledge’ categories. Worldwide it is monopolised by the four majors: Discovery, History, National Geographic and Scripps.
The business of factual entertainment worldwide commands 11.5 percent of the audience share while contributing nearly 20% to the advertising sales revenue pie, making it an attractive segment.
Despite lessons from global players galore, no major TV broadcaster from India or the Eastern part of the world has yet cracked it. Why?
In India, the audience share contribution and advertising sales revenue pie is approximately 1.5 percent and 2 percent respectively. In terms of audience numbers, even as it is bigger than most of the english news channels and other english entertainment channels, the ad revenue contribution remains highly under-performed.
The way to crack this business, it's necessary to reimagine the business of factual entertainment.
Two insights are important for this business to be understood:
Unlike general entertainment channels where individual programs pull their own weight, in the business of factual entertainment, the Channel is the brand.
Channel = Brand
The shows are incidental. The audience is loyal to the channel and not necessarily to an individual program. The genre provides high engagement value and the audience profile can be decoded from channel personality and hence the advertising brand fits. The brand is expected to deliver certain standards and hence no daily valuations and audience ratings do not matter much.
Not only is the content cost high, marketing investments also tip the balance sheet. This is because for the audience, image leading to perception - is everything.
This category doesn't have viewers, it's important to create fans.
Reimagining the Business Model
The business model needs to be looked at absolutely differently as compared to other segments. The revenue streams need to come from five different sources:
In this model, while individual contribution shares may vary, broadcast is seen to contribute no more than 25-30 percent. The shelf life of content is far longer and investments in quality content need to pay off through several channels as above. Example, co-production can help set-off high initial content costs.
No wonder then that Discovery’s annual content budgets are in excess of a few billion dollars.
It's absolutely necessary that both brand and content are invested in adequately. It's also important to remember that the business of factual entertainment Most has a long gestation period as getting the three unique factors – Audience communities as Fans, impeccable Brand integrity and cutting-edge Content – right takes time and makes the business thrive.
Over and above this, the business model needs to follow the Five-Point Strategic approach rather than being looked at as a pure-play broadcast business.