Inside Uday Shankar’s grand plan to kill TV

Akash Ambani, chairman of Reliance Jio, wanted to introduce the team to a man who would play a pivotal role in the Reliance-controlled entertainment network’s operations, going ahead. “Uday uncle", he announced, will take charge of the business.

“Outcome over output. We need to be in the pole position wherever we operate and need to be digital-ready. Like Jio has taken the internet and connectivity to the last consumer, Viacom18 will now take entertainment to the last consumer. That was Akash Ambani’s message," an executive at the meeting recalled. He didn’t want to be identified.

The executive sat there thinking this was the beginning of a new chapter for Viacom18. Back then, the company operated 46 television channels, including Colors, MTV, Vh1, and Comedy Central. Besides, it owned over-the-top (OTT) services Voot and Voot Kids.

“It was evident that Uday and MDA are very close. I was thinking that changes are inevitable," the executive said.

MDA is Mukesh Dhirubhai Ambani, the chairman and managing director of Reliance Industries Ltd and India’s richest man. Akash is his eldest son. And ‘Uday uncle’ is Uday Shankar, the media industry veteran who built the fortunes of Star India, turning a company just ₹1,400 crore in size in 2007, to a Rs20,000 crore entertainment behemoth by 2020-21.

In 2018, Walt Disney Company acquired Rupert Murdoch’s 21st Century Fox Inc., making Star India a part of Walt Disney. Shankar quit as the India chairman and president of Asia Pacific for the Walt Disney Company in December 2020.

Thereafter, he started Bodhi Tree Ventures, a joint venture with James Murdoch’s Lupa Systems. In April 2022, Reliance announced that Bodhi Tree Systems will invest Rs13,500 crore in Viacom18, to jointly “pioneer the Indian media landscape’s transformation to a streaming-first approach". A year later, Reliance stated that Bodhi Tree has invested Rs4,306 crore as the first tranche of its overall commitment, mopping up a 13% stake in Viacom18. And Shankar joined the board as a director.

While Viacom18 continues to run the 46 television channels, JioCinema, an OTT streaming service, was folded into Viacom18 recently. Shankar has been plotting a disruption with this OTT service at the heart—well, if he has his way, he could hasten the demise of the good old television by making access to even premium content nearly free on the digital platform.

The executive sitting in that post-Diwali introductory meeting sensed “disruption with total dominance". But what was not apparent back then was how Shankar would go about his new innings.

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If you have followed Shankar’s career and moves at Star India, his playbook at Viacom18 starts to make sense.

One, he excels when given a free reign.

Star India was the crown jewel of Rupert and James Murdoch’s 21st Century Fox. The Murdochs gave Shankar a free hand. But after the Walt Disney acquisition, Shankar started to feel stifled.

“Uday has a certain style of working, and he was the blue-eyed boy of the Murdochs, who gave him a free hand in running the business," said a former Star India executive who didn’t want to be identified. “Disney is very process driven and for every major decision, you need permission from Burbank (Disney’s headquarters in California, US). Shankar hated this," he added.

Now, Mukesh Ambani has given Shankar the licence to disrupt. As of now, that disruption is a page out of his script at Star India.

Star India first bagged the rights to the Indian Premier League (IPL), the popular twenty20 cricket league, for the 2018-2022 seasons. Shankar, initially, streamed the matches for free on Disney+ Hotstar, the company’s OTT service. Similarly, the ICC World Cup 2015 was streamed free for Hotstar users. The idea, back then, was to build a wheel of consumption that spins fast, one that keeps sucking in more and more consumers.

So, what did he do at Viacom18? The same.

For the 2023-27 period, the company won the digital rights for IPL. And Shankar announced that the tournament would be available for free on JioCinema, significantly disrupting the distribution business of broadcasters. Streaming platforms charge a subscription from consumers for premium content but here, he reversed the playbook, making the sporting content completely advertisement-supported.

While some critics argue that this decision is a disservice to the industry, it strategically aligns with Reliance’s approach, a replay of what we have seen in the telecom services market—inflict greater losses on competitors. Subscription-based OTT services are already grappling with challenges, and if Viacom18 continues to release new movies and series frequently, it will become increasingly difficult for the others to sustain high content costs.

Apart from IPL, Shankar took the bold call of putting all the original local content on Viacom18’s network—Hindi and regional—free on JioCinema.

“We were working on various monthly and annual subscription plans for original content. One day, he just told us that all local content will be free on JioCinema. It was shocking at that time, but the numbers now tell a different story," an executive who works with JioCinema said. He didn’t want to be identified.

As per data from AppAnnie, an analytics platform, JioCinema is now No. 2 in the pecking order of OTT players in India with monthly active users (MAU) of 221 million in June. Disney+Hotstar had 165 million and Netflix about 88 million active users in the same month. YouTube led the list by a wide margin with MAU of over 500 million.

“Shankar wants to build a giant consumption platform in JioCinema," said a senior executive with Viacom18. “He believes that once you solve for consumption, monetization will follow. Unfortunately, it puts a lot of pressure on the ad sales teams to bring in revenue. Some of the plans look good on Excel sheets but are not executable. But nobody can tell him that," he added.

Viacom18 and Reliance did not respond to Mint’s queries for this story.

TV’s zero innovation

Shankar’s playbook has another underlying theme—a battle with television. Its demise is close, he feels. If cricket, Bollywood, regional cinema, local originals are all available free on JioCinema, why does one even need a television broadcasting service?

“JioCinema is not competing with other streaming services. It is an alternative to TV," Shankar recently told his leadership team during a meeting. “India is way ahead of the curve as far as the decline of TV and adoption of digital is concerned. A large population has grown up without TV and has been consuming video with mobile screens," he further added during the meet.

Lack of innovation in the broadcasting space will only accelerate the fall, he believes. There has been little innovation since the launch of high-definition channels— National Geographic introduced the first high-definition channel in India, in 2010. The next year saw 22 channels being launched in the infotainment, sports, general entertainment and movie genres.

“Shankar is vocal about the fact that, of late, there has been zero innovation in the commercial or creative framework in the Indian media and entertainment space. He also recalled that the only disruption in the Hindi general entertainment space was in 2009 when Viacom18 launched Colors," said a person currently working with Shankar. “The TV ecosystem has become stagnant, he believes."

The outcome of Shankar’s actions will be felt in the broadcast space in the months ahead. Already, the free streaming of IPL had an impact—Viacom18 claimed that for the first time in the history of IPL, digital revenue surpassed that of TV during the tournament’s 2023 season. Advertising agencies don’t agree with the claim and hold that TV is still ahead but only by a few hundred crores.

Meanwhile, Shankar is focussing on exclusive deals to build JioCinema’s content bouquet.

Apart from IPL, Viacom18 has signed an exclusive content deal with Warner Bros. Discovery for its entire slate, including the HBO Originals for around ₹1,000 crore for three years. This content, however, won’t be free. HBO Originals were earlier available on the Hotstar platform. Shankar is also pushing for exclusive deals with noted content creators—such agreements, in short, stop them from working for rivals.

“At Star India, he inked deals with big actors like Salman Khan and Ajay Devgn, which helped Star and Hotstar become the only place to watch their movies. At Viacom18, he is now looking at signing such deals with production houses too," said one person in the know. He didn’t want to be identified either.

Also in the works are kid’s content, so far unavailable on JioCinema. Deals are being finalized and a massive content slate, which includes anime content, is expected soon. This implies a coming battle with YouTube Kids, an app YouTube created for children.

The to-do list

While Shankar’s new innings is off to a flying start, he has challenges to overcome. Building a new-age media businesses is possibly tougher now than it was a decade ago. One of the challenges will be to build a world-class tech engine which can deliver a personalized direct-to-consumer experience at the scale the company’s shareholders would like.

“Moreover, achieving significant return on investment in the high-cost video industry may be tricky, especially when confined to just advertising and subscription revenue streams. As a result, JioCinema may need to drive new revenue streams after 2025 anchored to gaming and commerce, which will leverage the group’s other allied digital and consumer businesses," Vivek Couto, executive director at Media Partners Asia, an advisory firm, said.

Couto is confident that Shankar has a clear monetization plan. “Reliance and its partners have no interest in building subsidized businesses or long-term loss leaders with JioCinema and Viacom18," he added.

But not all experts agree. Partho Dasgupta, managing partner at Thoth Advisory and ex-chief executive officer (CEO) of BARC India, questioned the monetization strategy or the lack of it. “There seems to be an investment in content without clear monetization plans—that too heavy investments. We are not sure what magic trick Viacom18 has to recover heavy investments in say HBO content or the IPL," he said. “The first IPL season market figures don’t show any big bang. Investors will be watching whether the money spent will give adequate returns," he added.

Dasgupta said that a war chest of ₹15,000 crore (while Bodhi Tree has invested ₹4,306 crore, Reliance entities will pull in ₹10,839 crore into Viacom18), if used judiciously could be useful but it’s not just about the capital companies bring to the table. “Media and entertainment are not driven only by finance and machines—there is a human element. If using the money one cannot produce the biggest shows, and distribute and market the properties, then it’s of no use. In short, money helps but it’s not the only factor," he said.

Content resonating with customers is a major factor and it can’t be served out in a jiffy. “It’s the people who will make or break these dreams for the group," Dasgupta said.

Shankar’s job, therefore, is to assemble a crack team. Many of his recent hires are from his former employer, Disney Star.

He has picked Kevin Vaz as the CEO of the TV business. At Disney Star, he headed the company’s entertainment business. Viacom18 has also named the former executive vice president and head of regional clusters at Disney Star, Alok Jain, as the president and head—Colors Hindi and Regional.

Other senior executives who have already left Disney Star and joined Viacom18 include Anil Jayaraj (CEO, Sports) and K Aravamudhan (head of public policy). Industry watchers say more employees from Disney Star are likely to join Shankar even though he has a reputation of being a tough taskmaster.

During his stint in Star India, Shankar told this writer that he doesn’t believe in firing anyone. “You have to identify the potential of your team and give them targets. They will either surprise you or leave on their own."

As of now, all executives joining Viacom18 want to surprise him, be part of the coming disruption. Shankar, recently, was heard saying: “IPL was not the last disruption; it was the first."

That’s a chilling message for rivals, and television.