TV.NXT 2014: "The Next Generation News Company will be 50 percent Content and 50 percent Technology": Raghav Bahl

In a chat with Vanita Kohli-Khandekar, Bahl shared his views about the future of media in India, the mistakes he made and the learning.

Raghav Bahl, the man who founded Network18, is ready for his second innings - one that he says will be in the news and digital space. At afaqs! TV.NXT 2014 - in conversation with columnist and writer Vanita Kohli-Khandekar - Bahl shared his views on the future of media in India, the mistakes he made, and the learning. The session was titled, "Building a television business in India - the past, the present and the future."

A first generation entrepreneur, Bahl takes pride in the fact that he built his company just when television was opening up. His biggest turning point came in the late '90s when he realised that a software, or content production, company is impossible to scale. As the broadcaster had the full monopoly, a producer could not even think of owning the IP of his own content. "If you cannot even own your content, there is no way that you will ever build long term value. So it was clear - if you want to scale, stop thinking of yourself as a production company and get into broadcasting," he said.

Bahl's options were to either stay in the business and grow or get out of it because there was no fun in being a 10 per cent (margin) player. "In 1999-2000, a new technology market boomed where companies with 0 per cent revenue were valued at billions of dollars. We had the opportunity to do the JV with CNBC and sell the story in an IPO which got us the money."

The second turning point came in 2007. While he had not planned to be in the entertainment sector, US media conglomerate Viacom came looking for a partner in India. He already had CNBC and CNN, two partnerships from outside. "Frankly, our balance sheet wasn't ready for the kind of investment that was needed but the markets were running and we thought that it would be easier to raise capital then," he said.

Talking about his journey and experiences as a first generation entrepreneur, Bahl said that though one may have everything else in the world, one can simply never have enough capital. "We were a news company that went into entertainment - unlike many companies which were entertainment companies that branched into news. India has a draconian law, according to which, a single Indian shareholder has to have 51 per cent of the news broadcast company. If I'd been allowed to dilute down to 10-15 per cent, life would have been much easier."

Exit clause

When asked by Kolhi-Khandekar about the perception of media exits being non-glamorous, Bahl said, "I think too many things get mixed up in the media business, especially in the news business. Frankly, if it had been entertainment exit, people would have bothered much less - there were significantly fewer comments on my friend Ronnie's (Screwvala) exit. In the news business, there is a public service element that seems to be woven in. There is an institutional morality that is built into it. An exit in the news business is seen as a "sell-out" and not as a business decision. It gets all mixed up. And if at the other end there is a very large business house, then it gets even more complicated."

He agreed that he would not have wanted to exit as nobody wants to leave something he has seen grow from the first day. "Media is more of a labour of love. It's the most thankless job. You will simply never make friends, you will only end up making enemies." On the challenges for news ahead, he said that the real challenge for broadcasters would come from digital media. He added that the next generation news company would be 50 per cent content and 50 per cent technology.

"Technology is the way you serve, content, personalise and curate content. All these algorithms are going to be extremely important." Bahl believes that content will always matter, but 50 per cent of that content will have to be around technology. "The consumer doesn't care whether it is original content or aggregated or curated. He/she wants the experience to be good especially because there is so much content coming at you and the fact that there is so much content coming at you. Someone who is saying he'll not curate or aggregate is living in medieval ages," Bahl points out.

According to him, the media in India is extremely independent. "No Indian news outfit has a more than 10 per cent share of voice. Even if you control that share of voice and stack those cards in one direction, the rest (90 per cent) can stack the cards in a completely different direction. In the last 15-18 years, I can probably count 3-4 instances where someone from the top has reached out and requested to hold the story. We underestimate and underrate the quality of Indian journalists. They are straightforward and you can't influence them after a point. They will take their own call."

Questioned if technology companies could start news businesses, he said that they would find it very difficult to get into news. "I don't think Google or FB would like to come in the content businesses. Social media is used like a distribution channel. Data suggests that news is being consumed by social media - it's like a distribution channel for news."

Bahl has seen failure too. According to him, 2008 was a crushing crisis that coincided with the peak investment phase of Network18. The media conglomerate launched Homeshop18, Colors, a series of web properties and "made a disastrous acquisition of Infomedia".

He recalls that in 2008, the company was investing Rs 2 crore a day and the losses mounted to Rs 750 crore, "We survived the financial disaster of 2008. In 2009-10 when the markets came back and Colors was doing so splendidly we actually raised Rs 1000 crore in equity capital. That's where - in hindsight - I think I made a classical mistake. We should have used that money to pay our debt instead of expanding."