The Evolution of Media in India

Sanjay Jain: So Sanjay Jain is a small town boy. I grew up, I was born and grew up in a small town called Muzaffarnagar. It is north of Delhi, 120 kilometers. I did my schooling from there. was never serious about my studies. I love fun, I love travelling. I have a lot of gratitude towards God. He has given me more than what I expected. And often people think I am serious but the moment they spend more time they find I am not really that serious. In my house people say I am the elder kid in the family. That’s what my daughter says.

From CA in Muzaffarnagar to media finance#

Rohit Agarwal: Very cool. It’s kind of interesting. Finance people, just given the nature of their profession, they come across as quite rigid maybe or quite buttoned up. But from inside, it’s quite different. Would love to know, how did you first foray into this world of finance? Coming up from Muzaffarnagar, did you have any role models that you look up to to say, hey, this is something that is interesting. I’m going to go and do this. or there was some other kind of serendipitous event that happened that led you to get your first introduction to finance.

Sanjay Jain: So it’s quite an interesting story. I did my 12th from a science background and always wanted to go to Delhi hostel. Not really to make a career but to enjoy life. And I landed up in Hansraj hostel. I always wanted to do maths because I was good at maths. I got admission into Delhi University but I didn’t get the hostel. I got… admission into Hindu, I could not get hostel. Hansraj gave me a hostel and the course was chemistry honours. Obviously chemistry was never my first choice. And nevertheless since hostel was there, I went forward and enrolled myself. First year was total party, Rohit. To the extent that you know we were sitting in the month of February and one of our seniors came and he said, I mean they used to call us Fachaas. They said Fachaas do you want to… spend two more years in the hostel or not and you know that’s one it really shook us that exams are around the corner whatever we could study in two three weeks the first paper went and it was horrible horrible to the extent that i thought i’ll just quit and i will not give rest to the people because it’s it was very very bad but my roommate he’s now on MD with one of the largest private equity in India. He said, Sanjay, there is no downside. Why don’t you give all the papers and then relax at home? And I said, okay, nothing worse can happen. I gave all the papers. I went back in summer holidays to my hometown and in hearts and hearts, I knew that I’m going to fly. And when the paper result came, I asked my brother -in -law, I said, why don’t you go and see what the result is? And he went and he said, you’re flunked. I mean, somewhere there was a hope that I might pass.

Sanjay Jain: Then I called him again and I said why don’t you go and tell me how many marks did I get? And he was a little unclear. So next day morning I went to Delhi, went to the college and I saw the result sheet and I don’t know why I somehow passed with first division. So that’s when I think I started getting little more about studies, finished my chemistry honours, never wanted to pursue chemistry as such and… So I said, let’s leave science and let’s do something which can help me do business. I come from a background where studies were never given preference. All three, four generations of my parents and forefathers were into business. So with that mindset, I thought, let me take up CA and it will help me to get a little more understanding of business, of industry, of funding, of finance and that’s how I landed up into the field of finance.

Rohit Agarwal: Got it. So you got enrolled into Chartered Accountancy course and went through that, I guess at that point in time, it was a three year kind of thing.

Sanjay Jain: I was a three year internship. I took four years to clear my CA.

Rohit Agarwal: Right. Got it. And then you join the industry.

Sanjay Jain: Yeah, then I joined the industry because as you, I mean, as I was studying and I was auditing a lot of corporates, helping them raise funds, I realized that it is not my cup of tea as setting a business has so many dimensions. Finance is just one part, you know, taking care of manufacturing, taking care of production, taking care of sales. And I thought I’m not ready for it. And then I took up a job. I was fortunate I got a first job with Oswal. and they are the big group in Punjab not anymore but they had multiple industries so I took up an assignment with them in a joint venture which was in Manipur I mean no one used to go there so they thought this is a new facha let’s send him there Manipur. Imphal used to be a disturbed state so they said you will be head of finance there in the factory and take care of factory and stuff like that. That’s how I landed up in my first job.

Rohit Agarwal: Interesting. And this is what year are we talking?

Sanjay Jain: We’re talking about. 91 -92 times.

Rohit Agarwal: Got it. So back then, I guess as MBAs are much more prevalent and you can call it maybe much more in fashion, was there any thought that, hey, kind of I’ve done CA, now maybe let me work for a few years and then I’ll go and do an MBA or let me directly go MBA? Was there any thought around MBA at all or you wanted to just continue on the path in the industry itself?

Sanjay Jain: Honestly, during that time, CA was a far more fitter profession if you want to go into industry. MBA trains you for finance, for how finance can impact the business on the strategy side. But CA, my belief it is far more realistic. It gives you insight about taxation, direct and directed. It teaches you about strategy, it teaches you about computers and systems. So I think it is far more holistic. So it never crossed my mind that I need to take an additional degree.

Rohit Agarwal: And before we kind of go further into your background, what do you think about that distinction now, CA versus MBA? Is one better versus the other? Should people do both? It seems to me like just overkilling by doing both, but a lot of people are doing it. What’s your view on that?

Sanjay Jain: I think doing both the courses is definitely an overkill. I think it is, I mean if you look at MNCs, there they prefer to hire MBAs for finance. But if you look at Indian companies, they still, most of the CFOs are still charter companies. So, because when you work in an MNC, your role is very very different as compared to your role in an Indian conglomerate. I mean Indian conglomerate, you tend to head multiple functions, you know, you will probably take care of tax, you will take care of… will be involved in strategy, you will take care of finance, you will take care of controllership. Whereas when you are in MNC, it is kind of silo, you know, wherein you look at finance and you advise valuation with respect to finance. Generally that’s what I have seen in my tenure with Turner International or with Mark.

Rohit Agarwal: Got it. So tell us then from Oswal to how did your entry into the whole media industry happened where you have spent almost 20 years of your career as a CFO.

Sanjay Jain: So, before we go there, let me share a nice instance of my first job. So, I landed up in Fahl and I realized that it’s a disturbed area. I never knew how bad it is. We used to all stay in one big hotel. So, Oswal’s had taken one big hotel converted into a guest house. Only where the senior staff used to live. and obviously 80 % of the senior staff had gone away because of insurgency. So practically other than finance I used to, I took care of sales, I oversee the production, but like it was a kind of a COO role and I really loved it. I didn’t know how to drive, there were three cars at my disposal. So I, that is where I learnt driving also. So, so when I was taking care of sales, lot of intermediate people got cut out. So there were a lot of leakages there in the factory, maybe because of necessity of the insurgency. And two months later my wife was supposed to land, because she said we are, we are just one year in marriage and how can we live separately. And the day she landed there was five or six terrorists which came to the guest house. and they said where is Sanjay and they were all loaded with guns you could see the caretaker said you know you could see guns floating from the jackets and they left a note for me saying that we will come tomorrow please keep the next amount ready so that was I mean I was taken aback I called the promoter I said this is what has happened so he said he very currently said give him the money I said give him the money what if he fires a bullet I said no I am not going to stay here. So he said why don’t you take a off, go for 7 days to Shillong and then we will talk. So that night obviously you know when you have to travel from Imphal to Shillong there is Nagaland which comes in between. And during that time if you have to cross Nagaland you need to have an upper mat. and obviously there was no time for inner permit. So there was a local guy who was a cashier who was my confident and we had struck well, he was a localite. So I told him all the story, he said you should move and don’t tell anyone that you are going to leave. So I called the driver, I said sleep in the guest house. Early in the morning 4 o ‘clock we went to the factory, filled up the petrol and I left for Shillong. Nagaland border they stopped and they said where is your permit? Fortunately when my wife was coming on flight from she took a flight from Calcutta her co-passenger was a minister in Manipur state so he he had given his card to Manisha my wife so we used his card and managed to go through Nagaland so anyhow so I then came back to Mukeria in a sugar factory at the factory level.

Rohit Agarwal: So you never went back to, wow.

Sanjay Jain: I was very clear that I will not take risk of my life. So from there I spent two years, two and a half years at the unit and learnt various nuances of sugar industry. Since my bent always used to be business oriented, more often I used to look at how can the, how can the, every process can be more efficient, how the cost can go down, how the revenue can go up. That used to be at the back of our mind. Obviously, control relationship function was always there. So somehow from there, I was shifted to head office in Mukiren Papers, which was expanding in a big way. Then landed up at Panayasia Biotech, which was a pharma company. But you know, manufacturing companies, Rohit, they don’t pay you well. So I was always, so you know, once I was in Delhi, I started looking at service industries. And I… I was looking at various options and I got entry into media. My first job with media was Zee Turner. So they did a joint venture with Zee and they wanted to set up a distribution app. And that is how I landed up in media, never came out of media.

Understanding the media industry#

Rohit Agarwal: You have seen multiple different types of media companies during your time. Can you maybe tell us how do you characterize that industry in general, maybe even talk about the evolution in terms of what have you seen over the last 20, 25 odd years in terms of the evolution of media in India?

Sanjay Jain: Yeah, I think media has gone through a tremendous change. From all perspectives from distribution perspective earlier the distribution used to happen only through cable then satellite television came DTH came that became the second mode of distribution and then over the internet OTT came in terms of content, I mean everything has changed you know, when I started, when I entered media, I think there were only two three big players, Star was there and Zee was there and there were couple of entertainment channels, they used to do 14 -15 hours of free programing and obviously they were quite profitable because both of them pretty much have had the monopoly. There were very few news channels, I think Aaj Tak was the only news channel which was there. I don’t remember any other news channel. And then the mushrooming happened in the industry. Suddenly we saw almost 50 -60 news channels. There were 15 -20 news channels in Hindi and English and there were almost 30 -40 original news channels. We saw mushrooming of entertainment channels, of Bollywood movie channels. So in every genre, in music channels, today we have almost over 500 channels. and since there are so many channels the competition is intense. because to fill the pipeline you need that much content and it’s a creative industry wherein you can’t manufacture content like a factory you need creative minds who can write interesting stories who know the pulse of the people and maybe that’s the reason if you look at any channel there are two three shows do well and balance shows don’t do well like as you said Ramesh Sippy made Sholey and after that he could never make a Sholey so

Rohit Agarwal: It’s very similar to a VC model. It seems like the law of averages or the power law really comes into picture here.

Sanjay Jain: Yeah, you never know what is going to become a hit. And of recently, I mean, then everyone started focusing on subscription revenue. The regulation, the regulator did a lot of changes. They thought that channels are acting a little monopristically. They are not treating the consumer fairly. So they came with a number of regulations. They started capping the maximum price. They laid rules on how you can bundle, how you cannot bundle. But overall, the industry kept growing. Ad revenue kept growing. Subscription kept growing. And now, I mean look at now on the digital side almost every media house has a digital presence. They have a digital platform and digital advertisement is probably bigger than the telecom market. So yes, I mean there’s a lot of change from appointment viewing. We are now view on demand whenever you want to see which or whatever you want to see, you can see through an OTT play. So it has been an interesting learning.

Rohit Agarwal: It’s kind of interesting. It seems like Indian consumers have unsatiable demand for content. Whatever you throw at them, they’ll keep on consuming untiringly. Maybe it’s just the sheer number of people that we have in our country or something else. It just kind of bamboozles my mind in terms of how much content is India consuming.

Sanjay Jain: Okay, so let me split this question into two parts. Obviously, the content viewing is going up in terms of number of hours being spent by each individual. The number of people viewing content is growing up because the data has become cheap. Television penetration whatever was there is there. The growth in that is not too much. But OTT penetration is going up by the day. I mean today, though a lot of content is being generated to discover a content is still a challenge. So now if someone makes a content, the first challenge is where to put it. I mean, there are only two, three platforms which are very popular, you know, where if you put, you will get viewing. But if you don’t go to those platforms, how will that content get discovered? So that’s a challenge. Obviously, good content will find its way sooner or later. But again, making good content is not easy. So yeah, so definitely consumption is going up but discovery is definitely challenge for a new guy.

Rohit Agarwal: Make sense. As I look at media, it feels from outside, at least, that it is quite a capital intensive business. Has it always been the case and thereby only large business houses kind of really play in this market or there is a nuance there where even emerging players can come up and really disrupt, let’s say maybe a TV channel market or some other kind of a media industry market.

Sanjay Jain: So Rohit, this is again a very tricky question. So if you look at the basic business, actually it does not need too much money because I mean if you need 15 hours, if you want to run a TV channel, the main constituent of that is your content. Now if you look at content, if you want to produce 15 hours, 16 hour of content, that may not cost you too much. But the point is that if you want to put Bollywood movies onto that. That cost a lot. They act as a marketing tool because they will attract lot of viewers on your channel. What you try is that you want to use that platform to let your fiction works from where you make money. But the challenge has started is that distribution has become very very tricky Rohit. Today we have almost 500 channels. Now if you want to get distributed and if you want to get placed in a band which is very easily viewable that becomes very expensive. earlier that never used to happen. I mean now every cable operator who has a sizeable muscle to get listed on this platform though lot of regulations are there it is not here. So that has made the business very expensive. So actually it is I mean initially you first couple of years you will keep funding the loss. So from that extent you need deep pockets now and common man common industrialist or This is how it’s not possible for him to enter media. I mean, you need very, very deep pocket. It has become a big boy’s game.

Rohit Agarwal: Are there any specific new media models that you are liking that you think has real good potential of disrupting the established models?

Sanjay Jain: See MX player tried you know he came with an OTT model putting lot of content lot of good content and but what has happened is that and he wanted it was always free so he wanted to monetize through advertisement but now if you watch content on MX player the advertisement keep coming after every 5 -7 minutes that’s a very irritating factor so in today’s environment I think one should wait a little bit more. OTT is a very easy model to… I mean it’s easy to make content and put it on OTT platforms. But you will not be able to get your show. How will people discover about you? So you will end up spending 5x, 10x of your content cost only in marketing. So if you put that kind of money to get eyeballs, how will you make money? So at the moment, I mean that’s the reason why if you look… There is so much consolidation which has happened in the media. So today pretty much it’s going to become a dual play. I mean, Star and Reliance and Viacom is getting merged and Sony and Zee were at one point talking to get merged, that merger fell through. But there is no other player on the entertainment space which is left, at least on the Hindi language. And if you look at regional languages, pretty much there are one, two, three players, lot more than that. So in that sense, the market is getting consolidated, which is good in a way because… Industry had been bleeding for quite long. Only 5 % of the channels used to make money. Now at least more sense will prevail in the industry.

Rohit Agarwal: Are there any sliver of the market that you have seen over time that you feel is still untapped and there might be an interesting business to be created?

Sanjay Jain: Also, you know, Doordarshan used to always be a free platform to be consumed by tier 4, tier 5 or the, you know, deepest pockets of the country, rural pockets. Even they have realized the power of distribution and penetration. Now, they also sell slots by auction. So, that used to be one space wherein you can put good content. maybe a used content which has already been run on your main channel and you can distribute free and make money on it as well. So every big player has started doing that and DD has realized the power of its penetration. Now even that comes with a price. So they auction their slots for one year, two year, three year at a ridiculous price. But yes, that pocket is still there. Connected TV is I think another market where which is which is going to grow. So televisions will come with bundled channels with bundled OTT play. So it is plug and play. Lot of people with AI coming in, with people becoming richer, they are taking early retirements. With AI there will be lot of redundancies. So television or content consumption is going to become, is going to grow for people to pass time, people to spend time. And connected TVs will play a role. I think that market is still emerging. there could be a good play along with connected television, e -commerce, video commerce or social commerce. I think that area also is likely to grow as against a pure pure Amazon play.

Rohit Agarwal: Interesting. You certainly, I mean, I was kind of thinking through in terms of, you know, how many news channels do we have? And it doesn’t seem like we have those many news coming out of the country to be able to fill up all of those slots. And perhaps that’s why there has been a lot of sensationalization of news, right? And we spoke about Aaj Tak a little bit. Perhaps Aaj Tak was a culprit. in making that happen as well, right? Everything was kind of flashed into your face. So even if you don’t want to believe it, you kind of just hear it 50 times in 15 minutes that you, you know, your brain gets attuned to think about it in a certain way. Do you have any personal views on that kind of sensationalization versus just putting out the facts of here is what it is?

Sanjay Jain: See, the fact is Rohit, all news channels are for commercial purpose, right? They are there to make money. They are not public broadcasters. In the public broadcasters, generally people think, carry a biased news. They don’t carry an independent news. Correct? That’s one part of the story. Number two, if there are 30 channels, how do you get a viewership? You have to do something which quickly attracts the viewers. So you have no choice but to sensationalize. If you look at actual journalism, each story takes a lot of time if you want to do a good story. Now if you take, if you spend 10 man days to make one half an hour story, that becomes a very costly affair. How many journalists you will have? How many stories will you create? And these deep dive journalistic stories, how many people will have interest in it other than intellectuals? So I think trend is my friend, so whatever people want that’s what news channels flash. If you want to listen to Modi, they will wrap around story around Modi. If you want to listen to some communal stuff, they will put some communal stuff. And the idea is to get viewership and to make money. So journalistic standards according to me are not what they were 20 years, 30 years back. I think that happens in every country. Unless, I mean had there been only two three channels obviously then everyone would have focused on quality because we should have come in any case.

Defining the modern CFO#

Rohit Agarwal: Make sense. You’ve been CFO for almost 20 years. How do you think about leadership?

Sanjay Jain: I think leadership is all about backing your team, believing in your team, getting the right guys to do right stuff, standing by them. You need to have a vision. You need to be collaborating with approach. leadership is very very important because that shapes the future of an organization.

Rohit Agarwal: How the expectations from a CFO changed over time and how did you mold yourself to meet or exceed those expectations as a CFO?

Sanjay Jain: See as the competition goes up in every genre, I mean India started opening up since 1990. You saw lot of businesses coming up, lot of competition coming up, lot of market getting open, there was lot of opportunities, so multiple people came. Now when there is a competition, then obviously you need your systems to be more efficient. You need to be more ready to have a better strategy to penetrate the market and to move up. So… With the change in the industrial scenario earlier, CFO used to be a controllership, an accountant and a tax guy. His job was pretty much, you please arrange the funding, what the company needs, take care of financial controllership and take care of taxation department. But as the competition grew, See, my belief is that CFO today, since it’s a funnel of an organization, everything comes to finance from marketing, from sales, from every department, from production, they have insight into every function. And they come out, they look at everything with a very different perspective. And if you have a business orient in your head, if you have a business mindset in your head, you’ll be able to see what is going wrong in which function, whether it is production, is it wastage mode. is a conundrum of electricity more. On the sales side, since you are number-driven, you will know what competition is doing. So you can give strategic inputs almost in every function as to how to improve, how to reduce cost, how to be more efficient, how to have a cheaper funding. So today, even the leadership at the top, they would like your CFOs to be a sounding board to help them tell where the leakages are, where inefficiencies are, how the company can move forward. So you know it, I mean you, CFOs today are the best sounding board for any leadership. They have started adding value almost in every function because probably they are the only one other than the CEO who has insights into every function. So, over time the function has evolved, it has become more a value added value added function, a strategic function rather than a controllership function.

Rohit Agarwal: How do you go about learning those aspects? Let’s say when you started out or when someone is kind of junior, they perhaps have one particular focus area, maybe accounts receivables or payables or taxes or reporting or MIS, something like that. How should one think about zoning out of that one particular area, maybe getting experience in others, but at the same time also kind of leveling up themselves to be able to say, hey, I am ready for that strategic advisory to the rest of the functions, really kind of, you know, providing that business partnership that one would look for.

Sanjay Jain: 90 % of the time it depends on how much hunger you have because if you don’t have a hunger you will not strive for more you know it is about going for the kill you need more you need to grow and that is that drives that drives the inertia. Even if you are in an MIS function when you are making an MIS you will know exactly either from the past history statistics competition as to what is going wrong in the company. You can add value then that you know why the wastage is going up, why the steam consumption is more, why my realization is down when the industry is going up. You need to put in extra hours to know what the competition is doing, how the industry is moving, to form an opinion as to where your company stands. and if you give value adds suppose even if you are junior in the system even if you are looking at tax if you are adding value and showing that value to your seniors you will be on top of the mind for the next promotion or the next responsibility and that is how you keep growing even when you reach the top position in the finance function as a CFO you need to then collaborate with your peers. I mean when you interact with marketing you need to you need you need to learn you need to unlearn and learn as to what they do how they measure themselves with respect to output and input how you can help them tell them what may not be working it may sound very weird but that is what you have to do and once you learn what the business is, what the triggers of business are with respect to cost and revenue, what could differentiate in the business, you will start adding value in all the functions. I mean business generally is common sense. It is not rocket science. So more time you spend, the better understanding you will have of the business.

Rohit Agarwal: You have seen so many different industries before finally landing on the media side. And within media itself, it’s quite varied in terms of the flavors of media that it has. How do you think about finance as a function that does not really need to specialize in any particular industry as such, and can be much more horizontal, in terms of the capabilities that one can bring from one industry to the other.

Sanjay Jain: See the basic function of finance and controllership and tax and funding that is pretty much common across all industries. Now within that if we talk about say funding different industries will have a different working capital cycle which is not difficult to understand and learn. There is a customer credit which you give you look at how much. lead time is required for inventory, how much inventory you want to keep. So you can figure out what is the funding requirement of an organization. So that may differ. But the basic principle across all the industries in the finance function remains pretty much common. But as you move up in the ladder and you are at a senior position, at a strategic position, then changing industries becomes a little difficult because anyone who is hiring someone at the top position will always prefer someone from the industry. He would like that let someone bring the industry knowledge and use that knowledge to add value in their industry. They may not prefer a candidate from a different industry because they will be a 6 month one year learning curve. So yes at a mid level you can move across the industries and that is when my take is that you should decide in which industry you want to be because once you reach the top position you can keep moving within that industry here and there or you know something which is close to the industry, but a 360 degree may be very difficult.

Rohit Agarwal: What instigated you to move from one CFO position in the media industry to another CFO position? Compensation is something that, of course, comes along with it. But I’ve got to believe that can’t really be the driving factor when you are already at that CFO scale. So what was your motivation? And you made two to three switches as a CFO itself. Was it the size? Was it the culture? Was it the opportunity? What did you look for in the moves that you made as a CFO?

Sanjay Jain: So my first job in media was Zee Turner. So Zee Turner was a pure distribution company. You know where you could not have added much value because you are taking channels as a partner and you are distributing. So suddenly from manufacturing when I came to distribution company I thought there is other than controllership I hardly have any job. There is very little value at which you can do. So obviously I wasn’t happy with my move but yes it gave me a better compensation. So six months in job I started looking out and I got my opportunity with Aajtek. Aaj Tak was a fabulous assignment. I really loved it. I was there almost five years. It was the leading news channel They went through the IPO under my belt. So I was proud to be part of the company at that time. It’s a different experience. You do road shows, you interact with other people, you meet lots of people from industry. and obviously I was enjoying my skin. Then you know after 4 -5 years you look at what next. So from news the next big thing was entertainment. I mean you want to move to a bigger size company. So this opportunity of Imagine Cape, Imagine, NDTV Imagine was a joint venture between NDTV, Universal Studios and Samir Nair who was the ex-CEO of Star. So they were about to launch an entertainment channel. That’s how I moved to Bombay with an entertainment channel. Even that was a nice journey. As I said, the skills changed because six months into the launch, Colors came in and Colors came in with double the amount in the kitty. So they changed the game. with respect to comping lot of money on distribution on Bollywood movies. As a result, our burn went up. Both the channels are burning. NDTV had limited resources to put money. So we ran into troubles. And that’s when we started looking for a new partner, so to say. Turner stepped in. So Turner bought over the stake from Universal Studios and NDTV. And Turner essentially was a very conservative company. they run kids business in the country. Kids business is a very small business and it’s a very profitable business. So suddenly from a profitable business to a large business which was guzzling money. So eventually that went down. Unfortunately, we all had decent equity stakes in that. And then I took up this assignment with IndiaCast which was again a joint venture between TV18 and Viacom18. It was again a distribution but the original part was that it had all the digital rights, it had the international business under them. The entire international business from all perspectives were managed by IndiaCast. So it became my interesting assignment and I spent almost the longest tenure of my career in IndiaCast.

Rohit Agarwal: Very cool. Tell us what did you like about the CFO role the most?

Sanjay Jain: You get to interact with all the peers, you get to know about all the functions of the entity. You feel that you are being part of the growth, you are in a way from a backseat driving growth and I think you can you can foresee what is going to happen to the company much before others can. So to that extent you have a crystal ball in your hand. You can influence all decisions at all levels, right from the board to the CEO to a functional head. That power, CFO drives that kind of power.

Rohit Agarwal: Very cool. What did you like the least?

Sanjay Jain: Sitting with auditors and scratching the head.

Rohit Agarwal: I’m sure. Do you have three commandments maybe that you would suggest for any successful CFO?

Sanjay Jain: I would say that you need to be a team player, inwardly and outwardly, so with peers and within your team. You need to have a desire to learn the business in whichever industry you are going. And God has given you two ears and one tongue, so listen more, speak less.

The Aaj Tak IPO journey#

Rohit Agarwal: Awesome. Why don’t we now move to some of the different stints that you have had. You spoke about Aaj Tak. Tell us more about the whole IPO event that happened with the company. Of course, it was the number one running news channel for a number of years. I don’t think anyone in India has not seen Aaj Tak. How was that journey? How was the decision to IPO really happened? And… kind of as a CFO, what did you think that the role that you really played in that whole event?

Sanjay Jain: See Aaj Tak is such a big brand that you know when you talk about news, when you think about news, only thing which comes to mind is Aaj Tak. It’s like when you think about toothpaste, Colgate comes in mind. So Aaj Tak is actually a big, big brand. Till the time I was there, I’m sure now also it’s very very professionally run. Promoters don’t interfere. Editorial guys are given complete freedom. It’s a pretty much board run company. So when I joined there were couple of private equity guys who had invested and they wanted an exit. Obviously there were timelines as to when exit has to be given. We still had enough time. there was no need to hurry up for an IPO. We wanted to expand. When I joined, we only had one Hindi channel. So we had launched an English channel called Headlines Studio at that point of time. We were trying to differentiate by only telecasting headlines and not deeper stories because that would have made a very cost -effective model because Aaj Tak is already collecting news. We don’t have to do a… on ground English reporter stuff, you convert that into headlines, put a good anchor and run a channel. Because most of the guys actually only want to listen to 90 % of the time headlines. So with that concept headline was launched. There was a local channel called Delhi Aaj Tai that got launched. And this is I think if I’m not mistaken 2004 or 5. 2004. So they There were no IPOs for last almost 12 months. The market was pretty dry. When Aaj Tak thought about doing the IPO, we spoke to a couple of machine bankers. And we finally, I still remember for a small IPO like Aaj Tak, their quota came for a pitch. I saw their quota for the first time. Renuka Kamath came for the pitch. So we finally hired J.M., Morgan Stanley, Kotak and ICICI Securities as a merchant banker. They were all very excited because they said after a long long time, a good, I think we were the second media company to hit IPO. There was no one on the news side which got listed. So everyone was very excited.

Rohit Agarwal: Lot of scarcity value as well then.

Sanjay Jain: lot of scarcity value and it was a profitable venture it was making money so obviously your role was to interact with lot of analysts tell them what the value is so that they can write a good report a genuine report what you think is right because that is what fetches you value in terms of perception and putting money on the table obviously then it involved lot of road shows there was enough appetite within the country so we did not do too many overseas road show because small IPOs. We got subscribed I think almost 100 times or 50 times I don’t exactly remember the number we heavily got oversubscribed. So yeah so essentially to give an exit to existing guys Bharti was invested I think Sunil Bharti used to be on our board. or GE Capital was there on the board, I say say, ICICI Private Equity had invested. So they also needed an exit. So that’s how IPO happened.

Rohit Agarwal: What’s your recommendation in terms of preparation that a company needs to do before going IPO?

Sanjay Jain: See I mean first of all you need to have a good track record because that brings credibility of what you are saying. Number two if you are looking at value you need to have a good plan. That good plan could be on the basis of raising money as well but it has to be a credible plan which can where the investors are ready to buy that story you know. It’s a good company, it has a good track record. With additional funding they have a good plan, the profits will multiply. There is enough room for growth, there is enough appetite for consuming their product. So those two are essential things. Then obviously your compliances have to be in place. Your audit has to be clean. So I mean once you have a house in order with respect to your compliances, with respect to your data, with respect to your numbers. I think from finance perspective you have pretty much set, then how good the story is will define how best investor will take it.

Rohit Agarwal: Do you have a preference between public versus private company? If you would have a choice, would you still go public or would you remain private?

Sanjay Jain: See again, it depends upon the objective of the promoter or of the organization. If you are generating enough cash and your growth plan can be funded by that, why will you do public? Because the moment you go public, you have taken public money. You are accountable for that. You have to be lot more transparent. You are playing with third party’s money. So you know, you cannot afford to take that many gamble or risky bets. So it depends upon what the growth path or journey of each organization is. But if there is a lot of room for growth and your internal capital is not good enough, obviously you don’t want to wait for two, three years for internal accruals to happen because you may miss the bus, then you look at taking growth capital either through an IPO or through a private equity to fuel the growth and not to miss upon the opportunity. So, let me put it in another way, you know if there is a growth waiting there with a decent outlook for couple of years one should look at raising growth capital and moving forward because otherwise someone else will take it.

Radio media and the Sun acquisition#

Rohit Agarwal: Make sense. You have had exposure to the radio side of media as well and sold a channel to Sun. Can you tell us how did that sort of come about? And I heard that the negotiations were, let’s just say, not that straightforward.

Sanjay Jain: So basically the radio was opening up in the country FM radio was something very very new so everyone was very very gungho especially only the media guys knew about it so almost every media player wanted to bid for licenses. Obviously India Today also bid, we got the licenses. Everyone did a similar stuff of playing Bollywood songs so India Today came out with a thought that you know let’s make it a woman-oriented channel. So I think it was branded as Meow and the focus was to get more women audience. Again when there are 10, 20, 30, 40 channels and each channel operates in a small territory, revenue can’t be very huge. Your listenership, there were no mechanisms at that point of time to measure listenership. So listenership measure used to happen only by recall value. Unlike in TV industry, the viewership gets measured by actual number of people viewing it. So they have… people meters in various houses this is that they extrapolate but audience listenership used to get measured by recall value so obviously the rates which were which at that point of time radio channels were commanding were very low so and the licensee was quite quite high so obviously we were not making money and as Aaj Tan being a news channel had limited resources. So we said why not let go of this business. So obviously we internally knew that you know we may not have funds to run for 6 months and we were in discussions with Sun and we were putting a price which was at a premium you know and we didn’t sell it cheap, we sold it at a premium recovered all the money we made money on our investment. and at one point Sun said they wanted 20 crore discount. They wanted some discount. Obviously in my head I was trying to convince my guys that you know let’s negotiate somewhere in between and let’s close it because we will not have funds to run for five months. But the lesson which I learned is that you know someone you need to put a poker face, you know it’s a Russian roulette, have some balls. If someone if you give a discount of 10 % what if he asked for another 10 % what will you do? And we ended up selling at that price at what we wanted and the learning was that you know you have to be tough when you are negotiating. You need to understand the need of a buyer who is sitting on the table, how desperate he is, what all his other options are and once you have a little insight you can command your flush account and that learning went a long way when I headed business in IndiaCast I headed I looked after international business for almost a year and a half and believe me it helped me a lot. I turned around number of deals that people thought will never come around

Rohit Agarwal: makes a lot of sense. You’re kind of walking the other person’s shoes in some manner and then really taking your judgment call based on that understanding.

Sanjay Jain: 80 -90 % of the time people only think from their perspective. They never get into other person’s shoes and look at what he can do, what all fallback he has. Obviously, you need to be a little careful about your fallbacks. But if you get into other person’s shoes, life becomes a little easy.

The NDTV Imagine saga#

Rohit Agarwal: Makes sense. Let’s talk a little more about the NDTV Imagine saga. Seems like, of course, started out with a lot of flair. Then Colors came in and kind of, I would say, added fuel, much needed fuel to the fire. But then, kind of, it was one of those, you know, rise up fast, but then also came to the ground quick kind of a story. Right. Were there specific learnings from that? Could you have gone slowly and that would have actually studied the ship and ultimately kind of made money and the brand and the channels would have lived on. Could it have been like what really went wrong and what really went right in your mind and what did you take out of it?

Sanjay Jain: Channel when it was launched and it did pretty well I think in first four-five months we did 100 TRPs which was a big number and to start making good money one had to get to a number of 175-200 types TRPs so you have to double your viewership from where you are so initial four five six months took us to almost halfway through and the going was good. I think we were sitting with some 30 million, 40 million dollar cash still in bank and Colors came in. We used to do some 12 -13 hours of programming so your cost is defined by how many hours of programming you do because rest of the cost is pretty much fixed. Distribution was not all that complicated to be honest people wanted good content so they carried us with small cost not much. So everything was going good and Colors came in now anyone who’s a late entrant has to do a big stunt to become attractive right like Jio came they took the rate so down that the existing two players started feeling the heat and what happened today is struggling to survive so similar story happened so colors came with almost 16 hours of content so we had to increase 25 -30 % of our content which means added cost. Colors wanted everyone to view so what they did was on distribution they took the most prime bands. Cable operators realized that there is a value in a placement if they are putting the channel right on the front page and they threw lot of money on that. So they suddenly got a lot of eyeballs. Since they were new, they blew up a lot of money on advertisement. So the eyeballs were limited, right? Content consumption was limited. So they were eating into everyone’s share. So the guys who were on the top, like Star, Sony, Zee, even if the 5 -5 % went, it didn’t make any difference to them. But if 10 % of our view ratio went down, it made a lot of difference to us. because suddenly we lost 25 % of our viewership. Then they further upped the game by putting the top Bollywood movies. They used to buy movies at whatever cost available because most of the movies used to sit in the library of Zee / Stars only. So they had to pay a premium to get movies. We never believed in putting movies because movies never made sense. But again like Jio, they wanted an entry, they wanted penetration and they were the last players. They did everything what needed to be done. So… So we started running out of cash. So we started, NDTV obviously had said that we don’t have, I mean, our financials can’t support. So we started looking for a new buyer. New buyer came with a limited capital. They said they are willing to risk X amount of capital. Now we have two options right either do a slow burn and see what happens to the competition. They probably will slow down at some point of time,so you have a longer you have another day to fight or do a big stunt and if that works maybe the turnaround will happen. So a big stunt happened but the turnaround didn’t happen That’s life. You never know what is right, what is wrong, but that is how the saga unfolded.

Strategy and the unpredictability of content#

Rohit Agarwal: Of your time as the CFO, I’m sure you have seen a lot of strategies and a lot of execution behind those strategies. In your mind, do you emphasize one versus the other a little more? As in what I’m trying to ask is, have you seen more strategies failing or more execution failing?

Sanjay Jain: So if I talk about media, we can separate media into two parts. One is content and one is business, other than content. So in content, actually, you can look at a lot of data. You can look at what is working, what is working for competition. You can do story bouncing in lot of cities when set to 1000s of mounts of story whether they like it or not so you do all that research you do lot of research but you can never be sure that it’s gonna work or not so on the content side it is more gut I think it is gonna work so you know it may work it may not work so it is it is gamble to the extent. I mean in a span of six months I think have not mistaken we would have launched some 12 -13 shows one after the other because we never know what what people will like you know they might be select for example there was a show on colors called Balika Vadhu show was in the market for three years and no one was willing to touch it. No one was willing to touch it because it’s a very, it’s a concept which is not going to work in prosperous country, in prospering country. People are aspiring for more. This content will not work. So no one touched that content. Colors bought that because they were new on the, they were new on the block. They… they were unable to fill the pipeline to my understanding so they said let’s take this show. They put all the marketing monies on a patriotic show and on other shows and Balika Vadhu worked rest of the things didn’t work and Balika Vadhu became the most successful show ever on television, ever on television. So, such is life. So, on the content side, you never know what’s going to work. It is my gut against your gut. But on the rest of the business, it is strategy which works, you know, as to how you want to pitch to an advisor, how you want to structure your rates, how you want to structure your deals, how you want to distribute, how you want to negotiate with a particular operator, because overseas most of the deals are negotiated. So, a lot of strategy works there. A lot of science works there. But on content side, it is like tossing a coin, it is my hunch against your hunch. I mean you can do a lot of data, a lot of science, a lot of research which everyone does but my experience is that no one knows what’s wrong. Everyone wants their every show to be successful. That never happens.

Rohit Agarwal: And I guess that’s why I’ve read even the likes of Netflix aren’t really able to produce as many blockbuster originals in India as they have been able to do in many other countries across the world.

Sanjay Jain: So there is also another psyche. If anyone, any producer who is given two, three shows, you will like to back him. You believe that he’ll be able to give you another hit. But that has never happened. because you know what content you produce maybe there was scarcity of the content at that point of time people liked it, maybe the actor who picked up did a great job even if it was a small name and something works which no one knows what’s gonna work because if someone knows what is working he will be able to give simultaneous hits and that has never happened in the industry.

Rohit Agarwal: I think only one genre that kind of keeps, it’s like a gift that keeps on giving is the mythological side, right? You can have like a new Ramayan built up, you can have a new Mahabharata built up. That seems to be working at least a little bit, if not even become like a blockbuster.

Sanjay Jain: Absolutely, because it’s religion right and religion works across the globe. I mean 80 % of the world works on religion right. So, it has always worked and that’s the reason you will find mythological shows on every channel. No matter how progressive the channel is, you will find some mythological shows there.

Life after retirement and angel investing#

Rohit Agarwal: Makes sense. Why don’t we now move to the life after retirement? You have been retired for like a year now, a little more, two years. How has been the experience? Are you liking it or are you kind of more bored because you’re out of your day -to -day grill maybe?

Sanjay Jain: 2 years. So let me give an answer in a little different way. I think I have been thinking, so I come from a very small town. I never thought I will reach where I have reached. I have lot of gratitude to God for what I have been able to. Not that I have done anything great, but whatever I have been, wherever I have been, I have lot of, I mean it is with the blessings of God. I could not have done it and managed it. So since… last 5 -6 years I am a number guy I know my needs very clearly I don’t need a bigger house, I don’t need a bigger car obviously if your needs are going up your money need will always keep going up so I had whatever I needed I had put it in black and white this is what my needs are and when I thought I have enough money to take care of that and I have enough money to take care of contingencies. In my head, I was fine to take off from an active corporate life. So that happened almost five or six years back. But again, you know, if a monthly paycheck keeps coming into your bank, you don’t want that to go away. And you always have a fear as to what you will do. How will your time go by? What will you do after retirement? You can’t be sitting idle at home and getting blotted. So I think COVID helped a lot. When COVID happened, we spent almost two years working from home. In reality, I mean, at a senior level, you don’t work 12 hours a day. So I realized that it is not really all that difficult and that’s when I started summing up my head that you know it’s okay. Also you know as you grow old Rohit, you realize that every stress has an impact on your body. After an age everything starts affecting your body and whatever you don’t have you start valuing more. You know when you don’t have money you value money a lot. You know when you are not at the top of your career you want growth in your career. So I started relying realizing that you know I may have only 10, 12, 15 years of good health. So why not do things what I always want to do. and could not do because of lack of money… So we purposely decided that you know let’s follow our passion, let’s do, obviously money is important but let’s focus on other things also as against spending 80 % time in making money and 20 % on sale, let’s reverse that. So now I spend 80 % time on my passion and 20 % time on making money. So that’s how the decision became easier and once the decision was made. I mean we like a lot of travel, we like travel. So we tried to do a bit of travel. I mean, last 2 -3 years we almost have done like 90 to 100 days of travel in a year. I like stock market, so that keeps me busy for 2 -3 hours a day. It keeps my grey sense little active and alive because whichever company you are invested in, you tend to read, you tend to know what the business is. You look at numbers, you look at stock price. Apart from that, I am part of an angel group. So new businesses keep coming and pitching us. keeps telling you what is happening, what are the new trends in the market. Again to primarily money making is a secondary objective, to stay active at head is a primary objective. So it has served well so far. It helps you to meet new people. It helps you to network. So far the journey has been good. I miss sometimes meeting new people. So that I miss. So I try every week and I try to meet two-three people from the industry, from the news sphere. I try to socialize more, which I never used to do earlier. So, so far it is good.

Rohit Agarwal: Do you think in retirement one should have a particular flow of the day? Is that still important as you would if you’re working full time or is it more kind of, you know, as things are coming, let’s just go by the flow.

Sanjay Jain: So I mean, I think you should take life easy, right? Why would you bind yourself to a certain routine right? It’s okay. I mean, you should have a reason to take a bath and go out of house. You should try to do every 2 -3 days in a week. So for that you have to put effort but rest is okay. What, really when you want? Look at stock market when you want.

Rohit Agarwal: Make sense. As a CFO, of course, you have looked at multiple different P &Ls over the years. You’ve worked across different industries. And now you’re kind of also, I would say you must have been investing in stocks over a period of time as well. If someone is looking to start investing in the stock market, from a CFO’s perspective, what are the things that you think makes sense for someone to look at and decipher what could be a good versus a not so good investment?

Sanjay Jain: So I will again divide this question into two parts. Someone who is already an investor, I would say a covered call strategy in options is a very very good methodology to make money. Someone who is sitting with a good portfolio, he should definitely look at doing covered calls and doing some bit of options and future & options. Someone who is new, the way I will put it is that you know, look at leaders in respective segments. I mean today at where we are I think the markets are quite expensive. We have factored all the positives. The markets have already factored everything which is positive right. So anything which is negative can actually give can be little root to the stock or to the market. So at this point of time, I would say list down 20 -30 stocks which are leaders in respective segments. Keep a watch on those stocks, market always gives you opportunity to enter, you know whenever those stocks crack, chip in, whenever those stocks crash, chip in so do small investment over a period of time, build your portfolio and then look at taking larger bets. If the markets are down 15 -20 % from here then you can look at deploying larger amounts but not at this stage and chipping in small quantities is always more safer and wiser.

Rohit Agarwal: Very cool. How would you think about the angel investments that you make? Is that also a kind of similar philosophy or given the stage of the evolution of the companies, it changes a little bit. It’s of course much more risk oriented investments that you’re making.

Sanjay Jain: I mean definitely the money which I allocate towards angel investing is the money which you have already written off in my head. So it should be money which you don’t need and obviously you are not throwing money but in your head you have already written it off. That’s one. Number two, initially we used to look at investing at a ideation stage and most of the companies didn’t do well. So we don’t look at as a group. and startups which are at an ideation stage. So the criteria for us is that it needs to have proof of concept, it should be revenue making. You will invest bases in which sector it is as a professional you see scope in that sector. What is the USP? Does the founders have enough bandwidth? Are they passionate enough? Are they skilled enough to do that particular business? So confidence, their confidence, their knowledge will inspire you to invest in them.

Sanjay Jain: I think that’s primary what we look at. I mean, you come with a, and we are a group of 130 plus members, almost from every industry. So they are able to gauge whether a particular business has a room for upside or not. And how can a new startup make a difference? How can they scale up? Will technology help? Are they looking at a certain niche which is untapped? And obviously, the founders how well they are equipped, how much knowledge they have.

Rohit Agarwal: Makes sense. So how do you define success?

Sanjay Jain: You know, unfortunately, Rohit, in our country, we started poor in our country post-independence. Our father’s generation and our generation, we have all worked with only one thing in mind, and that is how to make money. So success for us, unfortunately, is defined by how much wealth you have created, I think which is not right. Obviously, this you realize with time that success does not mean money. To me success means happiness, to me success means peace, to me success means living a good life. So obviously at different stages of life your criteria of success changes. Today you know I have a friend who has a startup in academics. They are working closely with Government of India and they want to introduce the syllabus in such a way that the focus shifts from making money to making happiness. So. Today there are so many options in the country that one can work in the field where he has a passion and if he is good he will end up making money also. So money should, I mean someone, I mean to my kids I would say don’t go for money, go for something which you like and money will follow because you are already coming from a financial secured background. So you need to do something which gives you happiness. So the definition of success for me has changed. Success to me means happiness peace you need to sleep fully in night that is happiness.