CA Media's Rajesh Kamat on e-com consolidation, digitisation & strategic investments
CA Media, promoted by former News Corporation COO Peter Chernin's Chernin Group and former Star TV Asia CEO Paul Aiello, has been aggressively looking to buy and build media & entertainment assets in India. The firm announced its two investments in the traditional media space last year and has recently closed two transactions in the digital media space. With Graphic India, CA Media is looking to create Marvel Comics of India by bringing in character entertainment across diverse digital platforms while its incubatee, FLUENCE, is looking to manage and leverage the social media presence of celebrities. In an exclusive interview, CA Media's Indian operations head Rajesh Kamat discussed strategic investments in the media & entertainment space and digitisation, as well as e-commerce and cable market consolidation. Here are the edited excerpts.
How has CA Media's strategy shaped up in India?
Back in 2009, Peter Chernin left NewsCorp and floated a company which is a hybrid of an investment firm and an operating company. One arm of that company is involved in television & film production. Another arm invests in companies like Flipboard, Tumblr, Pandora and Fullscreen.
We have tried to replicate that model in India. However, our philosophy is to create an ecosystem where each of these assets should not only experience growth but also help other brands grow. So we have taken a three-pronged approach â€“ traditional media is one; new & transformative media is second and consumer entertainment & retail will be the third focus area.
The fourth venture is Graphic India, which is about character entertainment and every character is a franchise. In my mind, the most important aspect is who develops the characters and how they are developed. We have the Stan Lee and Grant Morrison helping us with local Indian talent. We are also putting together a platform where these graphic novels are available on a subscription basis.
What about deal-making in media & entertainment space?
There is tremendous potential in the media space. What we defined as media, we have quickly expanded to media & entertainment because we believe the entire space has tremendous growth left. Media has pockets of growth outside broadcasting. We identify a space; then identify the growth and a promoter to partner and grow with. If we don't get a promoter, we incubate. OML is a classic example of that.
There are opportunities bordering on technology, but which clearly have an overlap with media, entertainment and sports. In broadcasting also, digitisation can change the whole game. Plus, there are other segments like the internet, radio, music and movies. E-tailing and e-commerce happen to be a pocket we are looking at.
Coming to cable and digitisation, what kind of consolidation do you see?
It has to happen at two levels. The equation between the MSO and the LCO has to stabilise or the numbers have to settle down. While the mandated numbers are 35 per cent and 65 per cent, respectively, at what point does it stabilise? Also, the cable act has to work out in a concerted manner. There is a battle between DTH and cable, but what's the ratio where it settles? Will it be 50:50 or does it go towards the UK where it is 80:20 or the US where it is 70:30? Those dynamics are yet to play out.
How are you looking at the e-tailing space, which also seems to be headed for major consolidation?
I don't know if the model of vertical companies getting consolidated by a giant horizontal of e-commerce will happen. We would probably want to look at someone who has the business fundamentals in order as it can't be only about customer acquisition. It also has to be about profitability and long-term play. E-tailing is a combination of 5-6 businesses â€“ sourcing, BPO, logistics, warehousing, marketing â€“ which are all different businesses. It is not necessary that you get into an entity present into all these businesses. But you may pick one of the niches which other players bank upon.
For full interview, please click here.
(Edited by Sanghamitra Mandal)