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Rediff.com  » Business » Dish TV's Goel defends entry barriers for new players

Dish TV's Goel defends entry barriers for new players

August 09, 2011 11:29 IST
Jawahar Goel is on the phone when I enter his office in Noida. He motions me to one of the seating areas of the massive room.

The 56-year-old managing director of Dish TV always reminds me of Nirma founder Karsanbhai Patel.

Just like Patel, the first impression you get is of an unsophisticated chap. But if, like Patel, you get Goel talking in a language in which he is comfortable (Hindi), you can have a conversation sparkling with insights.

And the first one comes the moment we settle down, writes Vanita Kohli-Khandekar.

"Working for Dish has taught me to combine the entrepreneurial approach with professionals. My job is to help the professionals perform. I insulate them from the legal and regulatory bit and also do the shareholder management. So the CEO gets all his time for running the business," he says.

Many CEOs, not just in media, would give an arm and a leg for such a breather.

The Rs. 1,437-crore (Rs. 14.37 billion) Dish TV is part of the Rs. 5,028-crore (Rs. 50.28 billion) Zee Group, which is India's largest media company.

Zee, in turn, is part of the estimated Rs. 10,000- crore (Rs. 100 billion) Essel Group. And Goel is one of the four brothers - the others are Subhash Chandra, Ashok Goel and Laxmi Goel - who started the group.

JG, as Goel is popularly called, kick-started Essel World, Essel Propack, Siticable (now WWIL), Zee News and Dish TV.

While elder brother and chairman Subhash Chandra is credited with the vision, it is Goel who implements the stuff that the big brother dreams up.

"He is the growth-oriented guy. I enjoy project management," Goel says as we move towards the conference room for lunch.

To save time we had agreed to meet in his office. Goel, a vegetarian, eats only once a day at lunch. So he craves ghar ka khaana or food from his house, which is what we are about to eat.

As I help myself to baigan ka bharta and chole, I ask him if he misses not having received formal education. Goel matriculated in Hindi before dropping out of school when the family business needed him.

"Formal education gives you confidence. But somehow it also stops you from learning. When you are not educated you are always in learning mode," he says.
What, then, does he make of the media industry today?

"As a media owner I can safely say there is zero interference from the government and political parties (some state politics apart). But there is also zero interaction," says he.

This, he thinks, is bad especially when the government wants the media to play a constructive role and be a bridge to communicate with people.

This could help in emergency situations like the 26/11 attacks in Mumbai or while using the soft power of media to spread the message of, say, communal harmony, hygiene or traffic sense.

In 1984, a US-based non-government organisation approached the ministry of information and broadcasting to make a serial that would spread the message of family planning couched as entertainment.

That is how India's first soap opera, Hum Log, was aired in July 1984. "Hum Log was 25 years ago." says Goel.

There have been no such projects since then. His point is that the government lacks a bridge or path through which it can communicate with the industry at one go.

Isn't that also the industry's fault? Goel has been the president of the Indian Broadcasting Federation four times.

He is on the board and task forces of various committees set up by the ministry of information and broadcasting.

So he knows that the Rs. 30,000-odd crore (Rs. 300 billion) TV industry has been terrible at lobbying.

Many of the issues it faces, like the lack of pay revenues, can be solved by pushing for a robust legislation that untangles the mess in cable television.

"Why sort it out?" Goel asks. My roti and bharta freeze midway to my mouth. Goel smiles.

He explains that if you wanted to launch a newspaper in Delhi today, you would be Rs. 600-700 crore (Rs. 6-7 billion) down before you even begin to make some headway.

So, entry barriers are huge. In TV anyone can walk in, get a licence - the process is mechanical - and start off. The incumbents find it easier to deal with the structural issues. They bother new or small players.

"These [structural problems] would be problems in a monopoly or duopoly market. But in a highly competitive market like this, they work as entry barriers," he explains.

What about the fact that fast digitisation would unlock at least a couple of billion dollars in pay revenue?

That is when Goel utters his second blasphemy: "Digitisation won't work. Tax rates are too high and compliance [in cable] is low."

For cable operators who make 100 per cent of their money in cash, digitisation means complete declaration and, therefore, 30 per cent and more in taxes.

So the man who designed the first direct-to-home system in this country does not think complete addressability can work till the tax tangle is sorted out. And that will happen when the goods and services tax comes into force, he says.

We are now on to some great ghevar laden with ghee, a typical Rajasthani dessert. It is time to talk about matters closer to home.

Dish TV has become the world's third-largest DTH player at 10.9 million subscribers, and Goel can take complete credit for it.

From lobbying for the DTH policy to setting up operations, he has been the driving force behind Dish even before it began operations in 2003.

But average revenues per user or Arpu are low in a hyper-competitive, six-player DTH market.

Most of them are still bleeding. Dish has just started making operating profit. For this, the DTH policy is much to blame - it makes exclusive content, key differentiator for better profits, a no-no.

So everyone sells the same channels and packages at roughly the same price.

This means all DTH does in India is give subscribers a better-quality substitute for cable. Was non-exclusivity a bad idea?

"The non-exclusivity clause came in an atmosphere where the government, just after begging for sports feeds for DD [Doordarshan], had announced the must-share policy," Goel says.

The countries in which content exclusivity works have a mature market and a proper regulator. Even they think there is some merit in looking at this.

"Ofcom [which is troubled by BSkyB] is studying our policy," Goel says.

Ofcom is the UK communications industry regulator. Speaking of which, do we need one?

"It is very complicated. The thing is that the Telecom Regulatory Authority of India [Trai, the broadcast regulator for carriage] doesn't have enough time to do this.

"And telecom [Trai's main job] is very big. However, one big benefit of Trai has been that our relations with each other - broadcasters, multi-system operators and cable operators - have improved," Goel replies.

This is news to me. Aren't they always dying to scratch each other's eyes out?

"Because of TDSAT [Telecom Disputes Settlement and Appellate Tribunal] we now have a specialised court that handles our problems and most of us have come to accept its judgements. So the on-ground fights have become more controlled. Earlier there used to murders and all," Goel says.

Trust Goel to put the whole thing into perspective. Surely plain under-declaration of revenues is any day more acceptable than people doing each other in.

That is the cheerful thought with which I leave.
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