Transitioning into Media & Entertainment

For a professional manager who has moved from the consumer goods sector to media and entertainment, what would you highlight as the key differences in these 2 sectors for a professional manager?

I think the fundamental difference is the pace at which media and entertainment as a sector moves. Therefore, while the common piece is consumer insight and telling stories, so I think you are telling stories through advertising in a consumer product company and you are telling stories here which is all your content in one form or the other, whether it is your 30 minutes serial or a 120 minutes feature film. That is common, but the pace at which the business moves and the pace of change which is happening is enormous. So I think that is what is the fundamental difference in media and entertainment.

If the FMCG industry moves – if the pace of change in the FMCG business is X, what would it be for the media and entertainment industry?

If it is X, if I were to have a guess, I would say at least 5X, at least 5X. And I think the other thing about media and entertainment as an industry is that the no. of external variables with which you sort of come in contact with, or which are shaping this industry is extremely high. For instance, telecom is shaping this industry as to how this moves forward. Electronic hand held gadgets are shaping this industry as to how it is consumed. So, therefore, that is extremely high. And compared to FMCG products – if you look at a soap or a shampoo or a detergent, the use for it is reasonably consistent over a long period of time, for 100s of years, for centuries, so I think you know that’s what you do. But here, how you consume this product, how you consume this content, where it is available, how it will be made, how it is transmitted, what are the pipes available, what are the screens available is changing and changing – the pace of change is only gathering momentum as we go forward.

In the FMCG business, you would be reaching out to the consumer directly. They pay literally for what you have to sell. Whereas here, people don’t pay directly for what you have to sell. And actually they don’t really pay for what you have to sell. It’s the advertisers. So it’s an interesting relationship, it’s a relationship with 2 stake holders where one pays and the other gives you viewership for which the other pays, right?

Yea, you are absolutely right. I think it is a B2C industry, as much as a B2C industry can be media and entertainment, but I think the business models are more B2B. So it tends to rely on another intermediary in the manner of speaking like in our case here – advertising. But that is also partly correct. I think a lot of subscription income comes from the consumer, may be through an aggregation model which was the earlier piece in cable piece, but as you go digital, a lot of it will come directly from the share of wallet of the consumer. So, having said that, a considerable chunk will remain B2B, but there will be a B2C chunk as well. And in entertainment, I look at – if you look at entertainment holistically, you know the consumer products end of the business is contentment, the experiential business of entertainment which is events and all of that, there is still direct share of wallet of the consumer as well.

That is something that is going to change – It’s going to be more interaction and payment from the consumer.

Yes. Yes.

When you look at this business from the perspective of human resources in terms of the kind of talent you need and the kind of jobs that there are, can you explain what it is that this industry needs and how is it different from what an FMCG would need or telecom would need?

I think one of the thing is – in my judgement, this is an industry which will need a lot of people because it is a people centric, people specific and people intensive industry. So, I think it’s all about people frankly and it is growing rapidly. I personally feel it is the next big sunrise sector for a country like India. I also feel we have a global advantage here, because we are unlikely to compete directly with the other big countries, which we do for every other thing. Because India is a free country, freedom of speech and all that should all help us. Now the tricky piece when it comes to human resources is – do you have any formal training? Do you have enough schools? Of course, you have a few –FTII which has been in news very recently quite a lot, there are some others as well, so there have been there, but do you have, first of all, sufficient no. of schools? Two, is the fundamental question – do you actually need schools for some of this or is it learnt more on the job? Is this the part of swimming you learn when you are thrown into the deep end? That is the second piece. The third piece is that having said all of this, how do you bring in some amount of objectivity and some amount of professionalism and as for the question you asked, for the people who come in and how do you value this? Because everybody thinks he or she has a story, everybody thinks that he or she is a journalist as a matter of speaking today, he or she is a programmer, but having said that, each of these in my judgement a very specialized field. There are people who will be good at it, there are others who will not be as good as this thing – how do we find out as organizations, how do we staff, where do we look for this talent and to that, those questions are there.

So, let’s take the 3 points you mentioned. So, the first bit or the first supply source is formal education institutes that do that. How do you evaluate what you are getting in the job market, how do you evaluate the talent that’s coming out?

I think some of our leading institutes have had good talent which has come out, if If you were to look at many of the FTII grads, there are some people who you can look up to in those fields frankly. Having said that I think there aren’t enough, that’s the first issue and no. 2, I think the way we are going about it – to give you an example Viacom 18 has a programme which is about 3 years old, which we started – Creative Trainee Programme. What we do there is we go to normal schools, so we will go to an Ahilya Bai, we will go to a Xaviers, we will go to a Stephens, and even some of the schools in north east, because I think there is a lot of talent, particularly in the area of music in the North East, so what we then do is there we basically try and look at mechanisms where we understand people’s ability to write, their ability to tell stories and we try and pick up youngsters, based on recruitment methodologies which is partly learned, but partly home grown, where we basically do a lot of work with them. So, it’s a one day kind of engagement after which we get to see 2 or 3 people and now every year we hire close to about 10 odd creative trainees year on year and I think that’s working out very well. When I interact with them, I find them really talented, very wise for that age. Their ability to multi task, their ability to bring fresh ideas, their ability to question the status quo – all these things are working well. But I think we are spreading in terms of areas we are going to – because my own judgement is that some of it cannot be taught – may not be taught and secondly, we do not have sufficient number of schools at this moment. So what works out is that you let people come in and jump into the deep end and then they learn as they go along. However, one thing that will be useful is that as they join an organization and learn, during the process of working with us, so that they can continue to strengthen themselves.

Do you see online education, courses that let you learn as you earn all of this as having value, especially if it is customised and tailor made to your industry’s needs?

Yes, yes. I definitely see lot of value. If India is to create 12 million jobs, a million jobs a month, they say or whatever, even higher and if that has to be done, we don’t have educational institutions which can match that at any level, private or public. Even if we try and start building those today, by the time we catch up it will take at least 5 years to a decade, whereas the youngsters are ready today, whereas the industries are expending today and companies are ready to hire them. So I think it is our ability to take more raw talent and shape that talent basically where industry will have to play a role which is lot more on the job, but we would want to rely on online education as we go forward. And fortunately, the hunger which is there in the youngsters and the time available with them and their ability to make 48 hours into 24 hours is amazing. You know the amount of work which they can put in – so I think they have the capacity to do it. I think we just need to find out the right avenues for them.

I sort of keep going back to FMCG because 20 years you have spent there are invaluable and you have focussed there on education and the talent supply to your company at that time. So the question is that online education, given that the media and entertainment industry is seemingly more chaotic, more disorganized, less process oriented. Would it therefore be even more valuable, than let’s say in the FMCG space where you go to MBAs, no matter what level of institutes.

It will be even more valuable. While media and entertainment is very dynamic industry, it’s a very fast paced industry, that does not mean that media and entertainment does not require planning, does not mean that it does not require preparedness, that does not mean that it does not require managing networks, we do need to manage networks, we do need to – because between 70 to 80% of our output has to be based on the planned output. There is of course 20% which may be more on the go or on the fly but, balance has to be planned. Of course, depending on the pace of change, we may need to plan, we may need to compress certain plans, what happens elsewhere in 2 years, maybe needs to happen here in 3 months, what happens elsewhere in 10 years, maybe needs to happen here in 1 year, but we do need that one year plan and the 3 months plan and the 2 year plan, equivalent to the 20 years, 10 years, 5 years elsewhere. You need to plan and I think that’s important.

You mentioned that the pace of change in this business is really much faster than in many other businesses. One of the key changes is the fact that it is a digital world. You mentioned screens, how consumption patterns are changing. So there are challenges on the technology front, on the monetization front, on the IPR front, all fronts. What would you say are the opportunities that this digital world is putting forward to companies like yours and by extension to people who want to make careers with you?

I think the opportunities for companies like us with digital, the amount of data that we could have as a company would be of a very different order and I think there is a lot of richness in that data and a classical example which you are aware of – but if you take anything that we do, if we can capture that data and know at a granular level what my viewer is watching, what is his taste, what are – not only in the area of viewership, I can build a complete ecosystem around my viewer, what he or she does, what he or she likes, what he or she shops for, how he or she spends time and so on and so forth. I think that information would be hugely valuable, not only for specific content, but otherwise as well. So I think that’s one big thing. I think digital is the first place where art will perhaps meet science in a real form. So, I think media and entertainment is a business about telling stories which is art in the manner of speaking, but I think the science it will bring with it with analytics and I am a firm believer of it is what we can marry the 2 to take it to the next level. And I think that’s what will be very very useful and for the youngsters outside who want to look at opportunities here, specially form a digital point of view, I think in analytics there is huge opportunity. And may be in certain youngsters who can combine left and right very well, this would be the best opportunity for them as well. So therefore, their ability to look at things scientifically, at the same time build in stories and tell stories – more and more I am seeing now youngsters who are a little more balanced, who are not sort of totally in for science, at the same time they are not only arts as a manner of speaking. And that again is a great place where it will offer an opportunity.

You just mentioned that you see a great use of data analytics in this business, how does it help in building creative or content brands because data analytics can also – you have so much data that it can also sort of build in too much caution. You are going with that data and such rich data.

I think we got to be careful with data analytics that it does not bog you down and you don’t become a slave of data, that’s not the purpose. I think when we look at data analytics, we also need to find out a smart interface/visualization for it. So, let me give you an example. Someone was recently sharing with me a lot of work they have done in Mahabharat, which is one of our biggest- arguably our tallest story in india. What they have done is they have taken the characters, who all are the characters, which characters are close to who and what are the level of interaction of the characters in different stories and through data, based on data analytics now, the closest to Draupadi is Nakul and farthest to Draupadi is Arjun. And this is based on the story the way it is written and if you exactly look at the story, no. of interactions they have had, basically the original story. If you look at today, we use data available today through the measurement agencies in India to look at the dynamics in different scenes and to see how we improve that. The same can be done at a more – this is currently done by using more excel sheets and it is done more tactically if I can use the word. What happens what analytics will again allow you to look at what kind of interactions within this story are likely to get more eyeballs or have got historically better eyeballs, and therefore what needs to be developed as we go forward. And therefore your ability to develop stories which are based on this goes up. And so this is the same – again to give you a very good example, one of the works which is being done, is still being done in research in I think in silicon valley is to understand why do kids – when kids start speaking, what are the first words they say and why do they say? Is it instinctive, anecdotal or can it be programmed? Or is there any data to support that? And where do they pick up stuff? So, for instance if you look at water – and now they have done a study for over a period of 3 years through cameras – this just to sort of illustrate what all it can do, not necessarily what we will do on a day to day, but what they can do – so there they have again seen peaks and troughs off what are the things – and very obvious stuffs, so for instance, you will see kid’s ability to react to water, to use the word water will be maximum in places where the water is in a house. So, it is lot more in the kitchen and in bathroom in a manner of speaking. So I think those interactions what they say, how they say – so the ability to use data analytics in content is amazingly high. And surprisingly, whatever little I have seen in my organization, the content guys are hungry for that piece. So most of my key content people are saying – wow, when can I see this and get this. So these are not numbers. These are trends, these are visuals, but they give them the indication of how to progress the story, who will talk to what and that kind of stuffs.

Do you see this kind of – I can completely see the virtue of this kind of data and what kind of possibilities it can help creative people sort of rappel with. But at the same time do you think it will come in the way of absolute creative thought because you are already working within a framework? It’s limiting you in that sense.

I’ll tell you how I would look at it. I think if you look at it – first of all, the primacy will continue to be for the creative piece and for the story. And that should remain pristine and that should not be interfered with. But if you listen to a story, you know basically, let’s say the story could be a book of 200 pages, could be a story of 5 pages or whatever, the story will continue to be the most important thing. Now the trick is, how do I successfully convert this story and with reasonable level of – or highest level of integrity into a serial, into a film and how do I dial up the probability of success of this beautiful story into a script, sorry, into a series, fiction series or into a film? That is where I think analytics will come into play in expounding it. It won’t build stories, it’s unlikely to build stories for you, but it will tell you who are the best kinds of directors who could look at it, what are the actors, what are the things people want, if this is the kind of story who are the best actors. Today we use a lot of these to either simple analytics or data or judgement. So, we do this day in day out, it’s not that you haven’t. Who will suit this role, it’s a very obvious question. One is that you only rely on your judgement, two is you bolster that judgement with some amount of data analytics to be sure that what you are taking is good and it will allow you to take bigger bets. The biggest issue with India is that we are currently making 100,000 hours of programming. I personally feel – original content 100,000 hours, I personally feel that’s a little too much. I think we may perhaps be – instead of making a 100,000 hours of average content and pardon me for using this word, shouldn’t we making 50,000 hours or 20,000 hours – or at least 50,000 hours, out of which my 10,000 hours is quality content? Should we also be telling not necessarily just culture stories, but universal stories? And for us to tell universal stories, we will need to rely on not only judgement, but data as well. So, I think – and that we will be able to tell it to the world. So I think that’s where it will come into play.

I think what I am hearing is that there is a big role to play, but there is also need to understand how to use it and not sort of go overboard in either accepting it completely or rejecting it totally. Also in the movie business, which is so high risk, this kind of data will get you greater efficiency. Is that the way to look at it?

Yeah… I think in the movie business again analytics will have a role to play in 2 or 3 areas. Let me first talk at the content level and maybe a little bit at the exhibition level and so on and so forth. But if you look at content piece first, I think where it will help Anuradha is that if you have your movies – if you were able to predict with some amount of certainty the output of the film at the theatre and even a band, it’s likely to be a band, it will be a good stat. And assuming that you get it 60 or 70% right, you know, maybe 6 out of 10 or 7 out of 10, which is what you would perhaps you know, you will not get it 100% right. But that band will then allow you to do budgets which are perhaps right and as they say movie business, films don’t fail, budgets do. So when analytics will come into play, it will sort of help you to get the budget right. You don’t let the budget fail. If you don’t let the budget fail, then films don’t fail in that sense and it will make the industry healthy. What are the fundamental issues with the film industry today is that there are far too many films which lose money. At least, you know 90% of the films lose money. That is not sustainable for an industry and no wonder that the industry is small in India as you look at it. It will only grow when we start making money and deploy it back into the industry. And I think that will happen when you use analytics from a story telling point of view, from a better fit from a casting director point of view, also from exhibition. I think it has got enormous potential in exhibition. If you look at it, analytics can come into play for medium sized budget films or small films, you have to choose the no. of screens you need to go to. It is not a problem for big films. Big films carpet bomb you – they go to 4000 screens, they go to every screen ideally. But where you could choose which screens to go to, again analytics come into play like for a film like this, what are the screens that I need to go to. So supposing Bombay, how many screens should I have and within Bombay therefore where these screens should be positioned for different small films for different genre. Should some of these screens be more accentuated towards South Bombay kind of place or are they more in North Bombay or in the Central suburbs? The other thing that comes in is also where are you scheduling these screens, what timing is important depending on what kind of audience will go in. That’s another piece which will come in. Finally, analytics can play a big role for exhibitors again from the point of view of pricing. If you look at it, because we can make pricing fairly dynamic because the biggest paradox in India is India is under screened. As you know, there are 8 screens to a million people in India, but at the same time, the capacity utilization is 37%. So if you are under screened, why is your capacity utilization so low? And is there – price a role to play as well? I think it could be partly content also, but what is the role price is playing? Am I making pricing far more flexible and dynamic? So I keep it high on weekends, one week1, and then do I drop it, do I drop it more in one part of the city and less in another part of the city, on one day, less on second day – I think you could do a lot of that stuff.

I can see the excitement oozing out of everything you say about this new business that you have been working in for the last 3 – 4 years. What was it for you personally from FMCG to media and entertainment, personally, now I am not interested in what the companies are doing and all of that, but what kind of adjustment was it for you?

If you look at the shift when I took, I was with – I had spent 20 years with Hindustan Unilever at that time, outstanding company, I was doing well in the organization and so you know I was quite well settled and then there was this question of sort of unsettling myself. So when I was moving on there was of course this little bit of anxiety slash fear, as to whether I will able to adjust in a totally different environment and that was without doubt there. But I think there was a reassurance that having spent 20 years with the Indian consumers and having travelled, thanks to Hindustan Unilever, the length and breadth of the country, you know with consumers, in the market place, I think that understanding of the country and understanding of the market place and of the consumer is I thought the most valuable gift of Levers to me more than anything else. And that is something which is precious and remains with me in whatever industry I go into, and that is very useful for this industry as well frankly. The second area I also thought is that media and entertainment per se was getting into a phase which I think now into where we will need to grow it in a more professional fashion. I think the edgy first decade you know where you did whatever you liked and everything you did worked was perhaps changing and you need to be perhaps careful of what you need to do and you need to bring in – So you do need to take risks in this business but you need to measure those risks a little better. So bringing in a little bit of method to the madness is where I thought I will be able to add value as well. I think those are the pieces. And personally I think I am a big India fan and therefore, opportunity to continue to stay in India was a very big driver. So with Unilever you know there was an option of moving out then and from a family perspective, everyone, so it worked extremely well in that sense.

You have credited Hindustan Unilever for a lot of learnings that you have as a professional today. Why is this company seen as the crucible that from where the CEOs for rest of the Indian industry emerge? What is in the DNA there that creates CEOs for most Indian industry?

I think it is difficult to describe a formula or a recipe, but I think what works for Hindustan Unilever or continues to work for them to a very large extent is ability to hire really high quality talent. Thereafter, they run this talent through difficult assignments and make them learn a lot on the ground. And therefore, it’s the systems and processes which have gotten developed, starting from the leadership training, you know which is now called the business leader training or whatever, it used to be called management training when we had joined, and what you go through. So I think the learning which one had when we staying 2 months in a village in Aita are some things which you cannot teach otherwise – no schools teach you that, that’s the issue. The learning which you have when you are travelling and doing your TSI stint, which is your base salesman level stint, you are moving around in jeeps and local buses and you are interacting with people, when you are talking to kirana stores, I think your ability to interact to the grass root level India is something which very few companies can offer to give you. And to top it all, there is a very systematic program to develop people and allow them to learn as they work in this company, I think that’s another piece because for me continue to learn while working is important and I think very few companies offer that opportunity as well, and they bring in a more systematic learning, project based learning, on the job learning and a combination of all of that which continues to grow you as and then no wonder that you’re sort of building leaders.

So if you were to advice somebody starting out their career, how much they should plan their career? What would you say, would you say that you have to be very clear about your goals and work towards them, or is it really that much in an individual’s control?

This is a little difficult question and I think it will vary from people to people, but my own view is I think having some amount of clarity for a short to medium period is a good idea. Thereafter the change is so rapid now that thinking what it will be 20 years out may be difficult. But what you would like to do for first 1 years or first 3 years is something that one should think through. And my view is that primacy – what I leave one message with the youngsters is that in the initial phase of their career, they should give a lot of primacy to learning, and to where you are, what opportunities to learn you will have, what is the kind of industry you are in and what will be your peer group, because you learn a lot from that in an organization, and that is critical. After that, I think the focus should be on making oneself a better professional and hopefully, a better person and thereafter, it sort of follows as you go along.

What is your method of dealing with frustration or failure at the work place? So we know that you are a marathon man and you run marathons, but is there anything that you do outside of your workplace, that actually helps you cope with all the stress that this really absolutely fluid workplace in India can offer?

I think couple of things. One thing you rightly pointed out – I think running is therapeutic for me. So, I run and that one hour is my hour or maybe 2 hours when I practice specially for my marathons. I also run without music, so it’s basically I am just sort of you know, all on my own, many times with a small group as well, so I think then you are chatting, but otherwise that’s really important, that really helps. I do a little bit of yoga and meditation as well, but otherwise these are the 2 key things. The most important thing for me in terms of managing stress is actually – you know whenever there is an issue, I give primacy to the issue, and I would also like to have then a conversation and an honest conversation. I’ve always seen that if you have a frank and honest conversation on any issue which is there and we don’t allow that issue to fester unnecessarily it helps a lot. So, I think you know that’s what works for me.

Sudhanshu Vats - CEO, Viacom 18
ABOUT THE SPEAKER
Sudhanshu Vats - CEO, Viacom 18 - Currently the Group CEO of Viacom 18, Sudhanshu Vats is an HUL veteran of 20 years. He has managed businesses as varied as food, detergents and personal care products.
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