Chennai-based SS Channel readies itself for a takeover by Viacom – the group that owns MTV channel, writes Venkatachari Jagannathan

Contrary to the normal traces of worries and uncertainities among the executives of any company being considered for takeover, the 60 strong team, with an average age of 27, at the multilingual Southern Spice Music Channel (SS Channel) is gung ho.

The city-based youth channel (promoted by Fortune Media Private Limited) is ready to be sold to Viacom – the global satellite channel group, which also owns the MTV channel. Fortune Media / SS Channel has an equity of Rs5 crore which Viacom is thinking of acquiring.

On the other hand, the SS channel team feels a sense of achievement for making Viacom salivate at its Rs2-crore enterprise. The company earns an average profit of 18 per cent of the revenues.

Says B D Ramesh Babu, president, "Last year Viacom came to us with a proposal to collaborate. We also wanted to have a joint venture with a big name. Initially we thought of divesting just 15 per cent and later agreed to divest 51 per cent. But now Viacom wants the entire company as it is their global policy not to have joint ventures."

Viacom is yet to freeze its price for SS Channel while Babu says that the channel promoters would like to have atleast $10 million. "That is negotiable," he adds. Curiously, the promoters of Fortune Media haven't done any systematic enterprise valuation.

Meanwhile it is business as usual for SS. Apart from the usual programmes, the channel is now hunting for fresh young musical voices - the first ever talent hunt covering the southern part of the country.

Known as the Fanta Voice Hunt the three-phased talent hunt will end up selecting four individuals who will move on to be part of an album, which will be put together by leading lights from the industry. As per plans, a music video, produced by SS Channel, will be released at the the final stag .

"My aim is to promote an alternative to film music in the south, a market that is dominated by filmi music," says the 27-year-old Bryan Peppin, head of programming and production.

According to him, the Fanta Voice Hunt programme will generate enthusiasm among the musically-inclined from the south and help launch them nationally.

The talent hunt, which started last month-end in Chennai, is being taken to Coimbatore, Kochi and Bangalore, and will finally conclude on 29 August, 2004, at Hyderabad.

The rewind While the channel currently has a good run, topping the viewership charts in the music channel category in south, it was initially promoted to save on TV ad spend by the lottery distribution company, Martin Lottery Agencies Ltd.

Explains Babu, "With a view to bringing transparency to lottery draws, the group used to book ad slots in channels like Jain TV. Though the business went up dramatically, TV ad rates started to hurt Martin Lottery and, hence, the decision to float a channel."

Babu, a qualified lawyer, cost accountant and company secretary, contacted the Martin group as his software company Coxswaine Technology Limited was offering basic software services to state government projects in the north-east . He agreed to head the lottery group's TV venture while continuing to run his own outfit.

Though primarily promoted to telecast lottery draws, it was decided that the channel should also be distinctly positioned.

On scanning the channels segment, it was found that the southern youth segment (15-34 age band) was not being addressed by the existing channels. Further, a purely 24 hour-music channel did not exist to cater to this segment, even though the major channels do telecast film songs.The other music channels like MTV and Channel V were more focused on the northern and western regions.

Having chosen the segment - 24 hour music - in order to be distinct, it was decided to have a multilingual format, telecasting songs in the four southern languages - Tamil, Telugu, Malayalam and Kannada - apart from Hindi and English.

"The idea came from Doordharshan's (DD) Chitramala, a multilingual film song programme that used to be telecast in the early '80s," says Babu. Shorn of film-based programmes, people then used to watch this programme and used to eagerly await a song in their mother tongue.

Peppin, head of Sun Network's Kannada channel Ushe, was hired to head the programming team.

The southern filmdom produces around 450 movies per annum. So youth-related film content is not scarce. But in the first year, SS Channel had to pay film producers for the content.

"In the second year of our operations we didn't pay anything for the software but we had to approach the producers. But from the third year onwards film producers started approaching us with their software," muses Babu.

According to him the Hindi / Mumbai music market is more organised and the channel gets its English songs from Sony and Universal, among others, for a period of 90 days. The major problem was the hefty carriage fee charged by the multi system operators (MSOs), given the plethora of channels. "Without paying a carriage fee, you can't air your channel," remarks Babu.

The fast forward The channel team had full freedom in running the show. But it is really a great challenge to run a music channel as it is bound by certain restrictions like the limited number of programme formats like call-in requests, etc.

Though the songs that are aired are multilingual, the language of the video jockeys (VJs) is English, which in turn imposed its own limitations.

"Regional language colloquialisms, jokes or popular slang cannot be translated into English. Nevertheless the VJs should be very interactive, jovial and appear 'local' without being too westernised while catering to the tastes of people belonging to four different states," says Babu.

The young team, bubbling with ideas and ready to embrace new technologies, brought in new programmes like the Virtual Request whereby anybody visiting a Music World outlet can request a song standing in front of kiosk with a web cam. When the channel telecasts the requested song, the person's face is also shown on the screen. This became an instant hit and youngsters started making a beeline to Music World. The programme got an award and gave the music channel a lot of exposure.

The other programme that is now popular among the youth is the Connect. Under this a person visiting any of the Sify's iWay cyber café can request a song on line. The person's image is captured by a web camera and the same is relayed to the studio and in turn beamed on a plasma TV located behind the VJ. The interaction goes on air with the VJ and the person who requested the song visible on the screen.

"We also offered our platform to domestic bands which was not being done by other channels," adds Peppin. If imitation is the sincerest form of flattery, SS channel soon found other channels copying its ideas. It requires three producers for SS Channel to air 12 hours of fresh programmes every day.

With viewership picking up and programming stablised, the channel's ad rates too climbed up from Rs50 per10 seconds to Rs450 per10 seconds, the going rate for couple of other well known Tamil channels. And the dependence on lottery ads came down. "Our prime time is between 4pm and 11.30pm. We broke even this April," explains Babu.

Though from day one the channel earned its revenues, billing the promoter company for the lottery ads, today there are no such ads. The group has started another channel-Sur Sangeet - a 24 hour Hindi music channel-retaining the `SS' logo.

"Advertisers in south are yet to recognise niche channels like us unklike in the north and western India. There the advertisers have a separate budget for niche channels," says Babu. But that does not mean the channel gets its ads from those regions.

"When it comes to south-based channels, the advertisers in the north and the west decide in favour of general channels like the Sun group, Raj, Vijay and Jaya. We were not in their radar scan," says Babu.

Nevertheless the channel has advertisers like Nestle, Henkel Spic, Maruti Udyog, southasiadirectory.com and others.

In order to correct this anomaly and see that the channel is distributed properly in Mumbai, SS Channel established an office in the commercial capital and is now seeing better results.

Expanding the footprint Meanwhile SS channel has entered the US and Singapore markets to increase its revenues. "In the US our channel will be distributed by Galaxy Entertainment on the direct-to-home (DTH) platform. The minimum revenue per month will be around Rs4.5 lakh ($1 per subscriber total subscriber target is 10,000)," discloses Babu.

In Singapore, the channel will be distributed by Star Hub via traditional cable route. "We are now looking at Europe and Middle East where we hope to earn around $20,000 per month. Our current year revenue target is Rs5 crore," discloses Babu before switching off.