“I’m a peculiar person to be in the business I’m in now, but I’ve always done peculiar things,” says Vikarm Kaushik, MD and CEO of Tata Sky, India’s leading DTH (direct-to-home) television operator.
Kushik’s background - he spent time studying Indian history - hardly made for the obvious route into pay-TV. But in his own small way, he is making history now, leading one of the most dynamic media sectors in India. DTH is transforming the Indian pay-TV scene. Six companies now fight for 20 million subscribers, and about 750,000 new subscribers are added each month. Some 25 per cent of the 85 million cable TV homes have opted to switch to DTH services in the past couple of years. Tata Sky last week announced it had amassed four million subscribers in three years.
The New Delhi-born Indian, who became Tata Sky’s first employee when it launched in the country in 2004, moved into the media business after many years as a marketer. The 58 year-old began his career with FMCG giant Unilever where, for over 16 years, he was responsible for the Indian growth of marquee brands including Lux, Fair & Lovely and Lipton. Kaushik says it was a great training ground. “I learnt all my marketing skills there. I knew all about the Mughal Empire but I didn’t know anything about selling soap.”
Unilever, he adds, taught him two lessons that he applies to his job at Tata Sky today. “In any business - the consumer is king. If the consumer isn’t satisfied or happy with what you deliver, then there is no business. And there’s never a job that is too small to do. Long before I wore suits and ties, I travelled in a van from market to market, washing clothes and showing off the benefits of using Lifebuoy soap.”
After several more roles in FMCG, the time came to consider his options. “I thought the communications and advertising business was a logical extension to use what I had learnt in marketing,” reflects Kaushik. “But I quickly realised I wasn’t cut out to work in the service industry. You have to say ‘Yes sir, no sir’ all the time to the client.”
At that point, he was offered the chance to join Tata Sky, then a new satellite TV joint-venture between the Tata Group and News Corporation’s Star. The opportunity seemed too good to pass up.
“I had no idea what DTH even stood for at the time,” recalls Kaushik. “But the industry immediately attracted me because I had the chance as a marketing person to create a whole new category. This doesn’t happen very often. The last time was when powdered detergent first came to India, or when mobile phones were first made available. So the opportunity to create something new completely fascinated me.”
Tata Sky rolled out its service in 2006 when the market was relatively quiet with only two DTH players. Since then, says Ravi Kiran, Starcom Mediavest’s South Asia CEO, it has “built a strong subscriber base and reputation”.
Today, Tata Sky employs 1,500 people. Its service is currently available in 7,000 towns and cities, and its set-top boxes are sold through a network of more than 30,000 retail outlets. It offers a range of channel packages as well as interactive TV features.
“The main difference between us and other DTH operators in the world is that we cater to an audience of 14 mainstream languages, which means our content line-up has to cater to this diversity,” he says. “It’s not merely carrying channel content; even our call centres can respond to 11 languages.”
While Kaushik is pleased with the growth of the DTH market, he notes that its success means competition has never been fiercer. He worries about the economics of the business if operators (both DTH and cable) continue to undermine and undercut each other by lowering prices for subscriptions and plans. He says: “Operators are offering unbelievable prices and deals to consumers. If the industry keeps competing like this, how are we going to earn or raise ARPU (average revenue per user) to make our businesses viable?”
To this end, Kaushik is keen to distance himself from the price war. Tata Sky’s services are priced at a premium. But the company now leads the DTH market with a 30 per cent share, which must mean that Kaushik is doing something right. “As far as the competition goes, the only thing they can do is to reduce prices while we continue to offer a host of services. We acknowledge that we can deliver premium services and cater to all markets and we’re not ashamed of it. But, while we’re maintaining our premium services, we don’t want to whisk away the lower end of the market. We don’t want to participate in the price war as that can be debilitating to our business.”
Although Kiran notes that Kaushik will face growing competition in the DTH market, he feels that Tata Sky’s strong post-sale customer service and knack for innovation (interactive services, pay-per-view and digital video capabilities) strongly differentiate it from rivals. Given the involvement of News Corporation, it certainly has access to the latest pay-TV technology from around the world.
But for Kaushik, the main challenge will be to keep his business profitable. “Our focus will be to manage our costs better as the economic environment has affected us,” he says. “The Indian rupee is now more expensive for us and hardware costs are up. So cost pressure and competition are things I want to take on while continuing our impressive growth.”
Kaushik certainly has his sights set high. Tata Sky already has four million customers, but he is aiming for eight million over the next three years. “We were the first platform in the world to do one million connections in 11 months. Now we’re going to do four million in less than 36 months of launch. But we don’t just grow for the sake of it - this fast growth has to become profitable as well.”
Vikram Kaushik’s CV
2004 MD, CEO, Tata Sky
1999 Marketing director, Colgate-Palmolive India
1994 Vice-president, marketing and exports, Britannia India
1989 Managing director, Enterprise Advertising India
This article was originally published in 13 August 2009 issue of Media.
