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Soumik Kar

Secret Diary of an Entrepreneur / CEO - 2018

"I am a person who judges a company by the state of the loo"
Secret Diary of Ronnie Screwvala — Part 2

V Keshavdev & Krishna Gopalan

Ronnie ScrewvalaFounder, UTV & Swades Foundation

My four years in cable TV gave me an incredible insight into consumers. With a little commercial sense, I thought I must be doing something right. 

It was during a play, Othello, when I was backstage with Alyque Padamsee for a rehearsal at the National Association for the Blind at Worli, that Alyque, who was the head of Lintas advertising agency, said this is the beginning of sponsored programmes in India. He said, Hindustan Lever wanted to do a television show on Doordarshan. It was the first sponsored programme and they wanted to do a television quiz show. Alyque said, “I need somebody to execute this.” I said, “I will do it.” He kind of looked at me and said, “What does that mean?” I said, “Yeah, I am thinking of starting a television content company.” He said, “Really? When? How?” I said, “I am in the process of putting it up.” June 1990, United Software Communications was incorporated as a private limited company and my first programme was for Lever, thanks to Alyque.

Since there were no studios, we actually hired a theatre. The first show was recorded at the Sophia College Auditorium with four cameras and a live audience. The show was called Surf Mashoor Mahal and with that was born India’s first-ever branded programme. The show gave me an inroad into all multinationals and corporates. Agencies were taking notice of us and, more importantly, it gave me an entry into Doordarshan, India’s only broadcaster then. We went to Doordarshan with a studio-based quiz show called Contact and a show on mathematics called The Mathemagic Show, which was produced by co-founder Zarina, whom I married much later in life.

Around the same time, Madison, which was the agency for Procter & Gamble, said, “We want to do a daily soap.” Since it was the days of Doordarshan, they said prime time wasn’t available except for the afternoon slot. We wondered who was going to watch television at 2 o’clock in the afternoon and that too daily, but it worked fine for P&G. So then we got people from advertising to start writing scripts in our basement office at Worli in Shiv Sagar Estate. Luckily, State Bank of India was emptying the adjacent basement. So, we converted the basement into a studio and set up 19 sets for India’s first daily soap opera, Shanti.

Soon we had teams for ad films, corporate videos, in-flight programming and television programmes. Because some of these things needed to be in multiple languages, we started a dubbing division. So, it suddenly became a sort of a diversified media company, even though we hadn’t designed it that way. We didn’t let any opportunity go. It was like, “Okay, okay, fine, we will do it.” “I don’t know how we will do it, but we will do it.” But that obviously meant we needed a very passionate group of people working with us.

Our programming experience with Shanti helped us much later on when Zee started in 1992. They were the first satellite broadcaster.

When they wanted to get on air, I went in and pitched them 10 shows at one time. They said, “What do you mean? You will do 10 shows for us?” “Because,” I said, “you have a cost economics problem. To start a whole channel with original programming, you will have budget for every programme. Not everybody can do more than one programme at that budget. But, if you give 10 shows, then I can do it at this budget”. That wouldn’t have happened if we weren’t having that discipline in Shanti. At the end of the 520-episode contract for 10 shows, we had built a strong relationship with Zee. That attracted the first private equity investment into our company.

By then, we could describe ourselves as a media and entertainment business. We had multiple shows on television and multiple B2B businesses. I think the next big thing for us was that we needed to grow. For that, for the first time, the penny dropped that maybe we needed capital. But I have to say again that it was not visionary or anything like that. It was people who came knocking at our door, rather than us chasing capital. Because there wasn’t a context of an evolved venture capital or private equity system in those days. It was also the time when News Corp made us an offer, saying, “We want to invest in you.”

***

Star had just entered India and they had sent one of their directors, Andrew Carnegie and one of their local representatives, who is now an eminent Supreme Court lawyer Raian Karanjawala. I was told that Rupert Murdoch was coming for a three-day visit to India and one of the people they recommended he meet was me. It was indeed a big achievement, but given our frugal basement office and my office no more than 80 sq ft, I was more worried about power cuts and the state of the loo! I am a person who judges a company by the state of the loo, because, I think, it talks a lot about the culture of the company. Since it was a business centre that housed six other companies, I had to talk to these companies and request that they not use the loo that day because Rupert Murdoch was coming! Zarina said, “Okay, you are busy worrying about all these situations, I am going to make a four-minute audio-visual for him, to tell him what is the breadth of India.” The first two minutes about India and the next two about the potential of TV. She made it and the whole concept was that the whole is bigger than the sum of the parts. Her point was to show that you won’t find a company like ours in India

What struck me about Murdoch was the curiosity and the follow-up questions for everything we talked about. We had a good conversation about what people are watching, why are they watching, what is the consumer trend in India. We weren’t really expecting them to invest in us and even when the team invited me to London, I had no clue it was something big.

A few weeks after Murdoch’s first visit to India and to our office, I got a call from his team in London. “We want to take our discussion forward,” one of his senior colleagues told me. “If you’re interested, let’s meet at the BSkyB office any time next week.” Naïve, I flew there alone, expecting little more than to collect information on what News Corp had in mind. When I landed at 8 a.m. on the appointed day, I was met by a seven-member team that included the head of BSkyB, the strategy team, two lawyers and two investment bankers. I thought I was there to have a broad conversation. They were ready to propose a deal and close it that day. “Where’s your team?” one of them asked, offering me coffee. “Your lawyer? Your banker?” And they began spelling out their proposal. Murdoch’s group had shortlisted us as their content partner in India and wanted a significant minority stake with no operational say in the business, and had no concerns about us working with their potential competitors.

By 4 p.m., their lawyers had punched out a Heads of Agreement on everything we discussed. Four hours later, I stepped out to make some phone calls back home to colleagues and my lawyer while the News Corp team faxed the printout to HQ for final approval. I was surprised Murdoch still wanted to read a document for a relatively small deal — another mark of a true entrepreneur.

Ironically, because I had gone to the UK and struck a deal with Star directly, when they started Star India, the local Star management obviously felt, “Oh! Okay, this is the deal you have done with them, so we have no obligation to give you any business.” So, whatever synergy we were hoping for never really happened.

We were caught between Zee and News Corp. While Star didn’t give us the business we wanted, Zee thought, “Oh! You are part of News Corp, so now we are throwing all the 10 shows off air.” I had a candid conversation with Subhashji who said, “Look, I think I am not going to give business to a competitor.” But I said, “It’s not like if I had come to you, and said would you want to make the equity investment, you would have made it.” He said, “It’s a fair point.” But he did not change his decision. The good part was that it was absolutely straightforward and it wasn’t any chief executive at Zee giving me messages in a different manner.

Though Star, as an investor, was sympathetic about our losing 10 shows, they weren’t giving us business either. That was the time we felt we needed to convert ourselves into a B2C company very soon. That, this B2B was not going to work out for us. So, in retrospect, for all the arrogance of some of the Star guys, I should thank them. They forced us to into the broadcasting and movie business.

This is the second of a three-part series. You can read part 1 here

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