"Staying the course is really the key to success"

Entering the media business was not a visionary thought that emerged early in my life. After my B.Com, I found myself at the same crossroad many of us do — should I create something new as an entrepreneur or proceed with a professional career? Those days, for a commerce graduate, chartered accountancy and MBA were prized possessions. Instead, I chose to go along a path I was already treading in some way — as a student, I had done a lot of theatre and voice-overs for commercials. But media meant just Doordarshan while film was a completely different world. There was zero inclination towards the media business but, thanks to my exposure to media and my confidence — theatre gives you tremendous confidence and frees you of inhibitions — there came about the idea of cable television. 

In 1981, people all over the world had multiple choices for television channels and here we had just Doordarshan. When I talked about my idea of having an alternative channel, everyone said, “Fantastic idea, but we can’t do anything about it.” Nobody had the concept of satellite television — not even in the West, really — so anything you did in this sector would be a first. My breakthrough was the idea of offering video entertainment for our building. The society agreed and by default, I was a pioneer. 

But it was tough because it’s a completely non-trodden path. I had no seed capital to expand — you sold the concept to the building and if more than 30% of the residents paid you in advance for the year, you had the working capital to start and install the CCTV in their houses. For an entire year, all we did was make demonstrations to all the large hotel chains and to about 300-400 building co-operative societies in Mumbai. We offered three hours of programming operating through a control room the residential complex would give us.

The cable business was a good learning curve. But honestly, although I was the pioneer, I had no vision. The biggest evidence of this is the fact that before I started UTV in 1990, I started a toothbrush company! When you’re starting up as an entrepreneur, you need to be opportunistic. Toothbrushes, for me, was opportunistic. It was an idea that occurred on a holiday with my father, who was working with a multinational called Smith & Nephew, which made Nivea cream and Wisdom toothbrushes. At the UK plant, a brand new looking automatic toothbrush-manufacturing machine had been set aside as scrap. We imported it and set up a manufacturing unit in India after getting positive feedback from the Colgate-Palmolive senior management. It could not make toothbrushes — the category was reserved for small scale industries — and so I got the opportunity to enter the business. Ultimately, when we took a strategic call to focus on the media business, we sold that business. But it was only in 2000 that I realised that media and entertainment was a bigger value creator than B2B contract manufacturing of toothbrushes.

Coming back to the cable business, about six years after I started it, the space got extremely crowded. The challenge in India is the herd mentality. When you drive on Indian roads, you first look at how five people around are driving and take your cues from them. Extrapolate that analogy to business and it fits to a T. Trouble is, not everyone comes in with the same philosophy — there will be entrants who will spoil the market by offering a lower price or whatever else and the economics of the business will change. So when I saw crowding, I decided to move out of the cable business and instead focus on content creation.  

An alternative path

In 1992, Zee TV had already started and was looking for content and programming. But Subhash Chandra wanted it at the lowest cost because he had paid a fat satellite fee to Li Ka-shing. He wanted to minimise his risk so he was willing to experiment with creativity, but at the lowest cost. We got a 550-episode contract and that’s when UTV scaled up dramatically. 

It was the Zee engagement that actually drove home to me that you need to have the highest level of creativity but, if it is not matched with business sense, it’s completely esoteric. That balance now runs in the DNA of the organisation. You need to be dream merchants, but you have to build that into a viable business proposition to go forward. 

I realised early on that you needed very deep pockets in the broadcast business because, outside of Zee, everyone else was a multinational. As a first-generation entrepreneur with nothing to fall back on, the big question was, could we fund the business in a manner that did not dilute our equity to the extent the company ultimately ceased to be ours? Equity was the only option because banks did not understand the media business and, therefore, did not lend. 

We didn’t have deep enough pockets, so we focused instead on content. We created a large post-production studio and started making ad commercials, airline in-flight programming, animation and so on, apart from producing several television programs. But all of that was at the whim and fancy of our customers because we were in a B2B business. It was important for us to control our own destiny, so we decided to create B2C businesses. 

The large picture in front of us was the movie industry, which we did not fully understand. But we knew from our TV experience that the younger generation was looking for something different, even though they were also happy enough with what was there. A whole set of young directors and writers were also looking for opportunities from the same prism. So it was a simple, straightforward entry into movies, thinking, “Let’s grow this one step at a time.” Our first film Dil Ke Jharoke Mein proved a dud, and the traction in the business came with our co-production ventures: Shah Rukh Khan for Chalte Chalte, Ashutosh Gowariker for Swades and with Hrithik Roshan and Farhan Akhtar for Lakshya. 

Many people would have got out of the business after that first failure. But that was not part of our DNA — wherever we’ve not done well, we’ve come back with a vengeance. Because if you don’t capitalise on learnings from your failures, it is a complete waste. Staying the course is really the key to success in any business.  

It’s also important to do your homework diligently. Often, there is a perception that films is a risky business. It isn’t — it’s just like any other business if you do the right analysis. We go through tonnes of feasibility reports. We look at the pedigree of the director, the concept, the genre and so on. The other 50% is about timing, date of release, marketing, positioning, brand and so on. There is no secret sauce for success but your research.

It was our research that showed us the way to broadcasting also. We knew we had lost the general entertainment channel game initially and playing catch-up required deep pockets. Our approach would have to be different to effectively compete against large multinationals. Our research while doing Shaka Laka Boom Boom showed kids were desperately looking for local content. So while Cartoon Network, Pogo and Nickelodeon Disney with their 10,000 hours of programming and deep pockets were already entrenched in the kids’ channel space, there was still a gap we could fill. So we started Hungama and in 18 months, became the No.1 kids’ channel. 

That’s when Disney approached us and we stuck a good partnership and took the company to great heights. Instead of dividing UTV into the three parts we wanted to grow — movies, broadcasting and gaming and new media — we decided to consolidate, allow Disney to increase their holding and infuse capital. I was happy to do that because for me growing the company was important. 

Promoters in India are obsessed with 51% and control. I crossed that bridge way, way back. I was a shareholder and the value of my shares would increase with everything one did right for the company. Now, if you think as a 60% shareholder in a company you are the owner, you have a big problem. The definition of ownership is 100%. If you think differently, you are not going to create value for the shareholders and the company.  

Beyond business

It would be wrong for me to say that the decision to finally exit the company was based solely on business need alone. It was also about how I viewed the next 25 years of my life and what I wanted to do. Very early in my career, we had started an NGO called Share, driven by the thought that about 10% of whatever we made every year should go to charity. Once we listed, we ensured Share was separated from UTV; it become my personal engagement. Over the past five-seven years, we’ve been active in rural India, especially in Raigarh and Ratnagiri districts in Maharashtra, improving access to water. We are now looking to create a model that is scalable, but for that one needs substantial resources. Of course, we’ll still raise more funds. If I could convince Disney, which came to buy Hungama, to buy the entire company, I’m sure I can convince philanthropists around the world to put money in a good cause. As an entrepreneur, that’s what I bring to the table and that’s my calling right now. 

I am also looking at seeding entrepreneurs. If we can’t take entrepreneurship to the next level over the next 15-20 years, we won’t be able to progress as a nation. I believe opportunities exist in non-glamorous sectors and that’s where I would like to add value with budding entrepreneurs, by building scale, brand and value. 

At the end of it all, what is essential for entrepreneurs is staying the course. You’ve got to be able to constantly ask yourself, “What have I got to lose?” In fact, the best way to handle crisis is to fast-forward to your worst case situation. Align yourself to that. If you can live with that, everything else is doable. I started with ₹37,500. What’s my worst-case situation? I’ll go back to ₹37,500 and it’s not that petrifying. My ability and my confidence will restart because, as difficult as it may sound, it’s not insurmountable. 

Looking back, it may seem I have always planned my exits. But that’s a false way to start. If you start Day one in a job with a view to hand over in two years’ time to somebody else, imagine your performance. You’ll never have any clarity of role. You’ll never be a leader. Also, success leads to complacency. Don’t take anything for granted and instead say, “Let’s move on.” That can be quite rattling for many team members but for me, it’s been a good formula. Remember, life can be very fickle and transient. So stay grounded.