subhash chandra

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PRINCIPALS OF MANAGEMENT


SUBHASH CHANDRA





Leaders can be of three types:

• Autocratic - One who takes all decisions himself and expects others to follow him.

• Democratic - One who takes decisions after consulting others. Also known as 'Supportive'.

• Free Reign - Allows everyone to take their own decisions.



THE COMPANY

ENTERTAINMENT is really important today because of our hectic work schedules, entertainment helps people relax. A majority of Indians fall in to the lower and middle class and as they can't afford entertainment outside their homes they entertain themselves at home and that is best done through television. When we speak of television in India we speak of Zee TV.

Zee Telefilms is a part of the Essel group and was initially incorporated under the Essel name in 1982. The company was renamed as Zee Telefilms in 1992. Zee is engaged in the production and export of audio-visual entertainment software.

There are 3 main subsidiaries of Zee that help it in distributing its services. First one is 'Patco' which exports program for Zee Cinema and Zee India. Second one is 'Siticable' that serves as a domestic distribution company for about 3.5 million homes spread over 43 cities. Third is 'Zee Multimedia Worldwide', which is a Mauritius based holding company for the group’s overseas operations.

Apart from 'Zee TV', Zee also broadcasts 'Zee News', 'Music Asia', 'Zee Music', 'Zee English', 'Zee Cinema', 'Zee Movies', and a whole lot of other channels including the 'Alfa' network of regional channels.

Zee TV , being an Asian cable satellite television channel from India has gained popularity in Britain and Europe, and also wants to explore opportunities to broadcast in Malaysia. In Malaysia, besides TV, it is planning to start it's own radio channel (Zee Radio) this year, and is keen to tie up with local parties to broadcast its programmes. As per a survey conducted, Zee is famous among NRI's as well like Bangladeshis, Pakistanis, Sri lankans and others. Zee is telecast in Britain for about 17 hours a day. 30% of the programmes telecast in Britain are made locally by Zee. Among the favorites are 'Zee Top 10', 'Aap ki farmaish', 'Kubsoorat', 'Chakravuh' etc.

In India, Zee is viewed in about 15 million of the 40 million TV homes. In Britain, there are about 350,000 viewers of Zee.


Now days the most important medium for advertising is television.
The add rates of some channels are as follows:

• Zee TV- Rs. 10,000/- per 10 sec.
• Star TV- Rs. 6,000/- per 10 sec.
• Sony TV- Rs. 5,000/- per 10 sec.

The most amazing fact is that even after being so expensive the advertisers are willing to spend on Zee for their advertising, the only reason being it's popularity, brand name and huge audience all over the world.


The following are the major milestones of the company:
• 1982 - The company was incorporated on 25th November, and it obtained the Certificate of Commencement of Business on 5th January 1983 as Empire Holdings Ltd. It was promoted by the Essel group of companies, comprising Sanjay Badgamia, Vasant Parekh and Ashok Kothari.

• 1992 - It entered into the business of entertainment software and subsequently the name was changed to Zee Telefilms Ltd. The company co-promoted Essel Packaging Ltd. the partnership company of the Essel group in 1982. The company produces/develops Hindi films, serials, game shows, children programmes etc.

• 1993 - ASSPL became a wholly owned subsidiary of the company. In this year, the company entered into an agreement with the Mauritius Broadcasting Corporation for supply of programme software to ZEE TV.

• 1994 - The company promoted Siti Cable Venture for provision of integrated cable network facility to individual cable operators on a city by city basis and function as a city TV station. The company also proposed to develop the Pay TV industry and, with this in view, along with the News Corp Group, started promoting 'Zee Cinema', the first Hindi movie Pay TV Channel.

• 1995 - The company along with Newscorp promoted another company viz. 'Programme Asia Trading Company Private Ltd'. (PATCO) for programme supplies to EL TV and Zee Cinema.

• 1998 - Broke up with STAR.


The profits for the first quater for 2000-01 are Rs. 32.04 crores, compared with the same periods profits for 1999-00 of Rs. 30.50 crores.

Zee’s success does not lie in the fact that they broadcast the most highly rated TV programmes on TV. It lies in that fact that they have been able to make Zee TV the default channel for viewers all over the country. In small towns when people talk of cable television they talk of Zee TV.





THE PERSON

Subash Chandra has gone from zero to Zee. His success story is one of the finest ever written. Born as a rice traders son in Haryana he knew nothing about programming, distribution, trade and commerce. He never even attended college. However, this 50 year old media mogul had no qualms about learning. he realised early on that there is no such thing as a stupid question. The young Chandra learned from his grandfather as they would go about the village bazaar shamelessly collecting information through gossip. Even today Chandra is much the same and collects as much information as he can. He is a man who listens to what people say, he has no computations about taking advice from the most humble of his employees. He is a forceful team leader and believes strongly in honesty and never likes to go back on his word. He believes in himself. He knows his weaknesses and always tries to overcome them. This is the man who flagged of Zee by making the highest bid of $5 million for a transponder that STAR TV wished to lease out. He took the first steps as the electronic media was freed of state control. Middle class India, bored with the dry programmes run on Doordarshan, eagerly lapped up Zee's fast paced programming. He believes in making partnerships and in keeping them. Today, sitting pretty with a bouquet of channels and an extensive cable network, Chandra is the young entrepreneur's role model for the millennium.



MAJOR DECISIONS


ICO GLOBAL

1.) Collaboration of Subhash Chandra and Craig McCaw:

Subhash Chandra, CEO of Zee Telefilms Ltd. and Craig McCaw, chairman of Teledesic company from America decided to cooperate and not compete with each other, just a day before a bankruptcy court was to take decision on their two bids. The result was 62:38 MacCaw - Chandra partnership to take over the management of ICO Global. They are now partners in an attempt to acquire the global mobile satellite communications company for which they had made rival bids earlier. The McCaw -Chandra alliance will receive 74 percent of ICO restructured equity. The balance 26 percent will be distributed among the company’s creditor’s and its current shareholders. MacCaw tabled a bid to buy out bankrupt satellite phone company Iridium LLC. In step with him, Chandra is evaluating its own role in McCaw’s new move .i.e., Chandra considers his own involvement in Iridium as logical extention to the duo’s partnership in ICO. Iridium and ICO will be rolled into one, making Chandra’s involvement active and inevitable. Logically, what Chandra and McCaw would do is to fix the glitches in Iridium and continue to build subscribers on the system till the satellite life expires in 2005. Iridium has its five year satellite -that’s due to its low Earth orbit constellation structure and it incurs huge variable cost component that adds to its other financial problems. For Chandra, McCaw, or any other serious player Iridium’s value lies in its 55000 strong global subscriber base, its satellites, a world wide billing platform , its license to operate in more than 100 countries and a technology that supports different mobile standards.
The bottom line is: taking over Iridium will give Chandra and McCaw access to existing global system’s with an assets of $5 billion as reported. Say’s a Chandra watcher, "There will be no second generation system Iridium system and consumers will be migrated from Iridium to ICO, ultimately creating just one global satellite communication system". If the migration is handled seamlessly , the customer will care little about technology or the satellite communications system which transports his call half across the world. This going to be very crucial task for systems manager since the basic technologies that run for to systems are actually vastly different. One such problem could entail changing the handsets of each and every subscriber since Iridium handsets would not function on ICO systems.


2.) Iridium v/s ICO:

(a) ICO global is owned by 60 strategic investors, mostly national telecom operates from various countries. While, Iridium is promoted by consortium led by Motorola of the U.S.

(b) The data transmission speed would be in the 144-384 kilobit range with redesigned ICO system, while as far as Iridium is concerned it is in 2.5 kilobit range.




STAR TV & ZEE

Zee TV was originally promoted by the Essel group in India and it started telecasting in October 1992. Essel group used to own 51 per cent of Zee TV while Rupert Murdoch's News Corp held the remaining stake. Star TV reached more than 30 crore viewers across Asia, India and the Middle East. Differences soon cropped up between Subash Chandra and Murdoch. The rifts, which were much speculated in the media , finally spilled out into the open when Hindi programming was introduced in Star Plus in late 1996. Zee cried foul saying that an agreement stipulated that the Star stable will not introduce Hindi programming. Star however struck to its guns saying that the agreement did not prohibit beaming Hindi programmes but only restricted the programming to a particular percentage. It contended that Star Plus's Hindi programming did not breach this percentage. However the much touted indigenisation of Star Plus did not pay dividends. Zee went from strength to strength, while the Star group's channels continued incurring losses. Star TV was also heavily banking on the launch of direct to home (DTH) operations in India. This has not taken off till date. The logic of the market however saw the two sides enter into talks for a merger in 1998. A merger would have created a media major which would have dominated the market place. For Star, it would have been a relief from losses that it was totting up. The combine would also have been a major player in DTH when it was allowed. The talks however, fell through. Zee alleges that this was due to Star coming up with an unrealistic valuation. After the transfer of the stakes to ZTL, Star will be having not more than 3.5 per cent equity stake in ZTL, depending on the pricing of the shares. What does the deal mean for Zee Telefilms and its promoter ? This deal would make Zee Television network a wholly-Indian operation in all its domain. It would, in fact, in the words of Subash Chandra "create an Indian media conglomerate". Earlier with STAR controlling 50% of Zee, Zee had STAR's expertise and funds to fall back on. They could also take advantage of STAR's huge distribution network and their reach (for furthering their interests in Europe). The selling off of Star TV's entire 50 per cent stake each in 'Asia Today', 'Patco' and 'Siticable' to Zee Telefilms for $296.5 million has consolidated Zee Telefilms position in the media business. However after buying out STAR's share Chandra is now sailing alone. He has nothing but himself to praise and himself to blame for whatever happens. This was a bold move on his part and it has paid off, as today 8 out of the top 10 TV programmes are on Zee (ORG-MARG). Initially when the cable market had opened, STAR had decided to cater to the classes since they were the type most expected to subscribe to cable TV. Zee, however, decided to go with the masses as Chandra had the foresight to see that although cable may have started with the classes, it could expand and grow only with the masses. An indication of his success in this area is that today STAR has made it's flagship channel, STAR Plus, completely hindi.



FUTURE PREDICTIONS

The buzz word today is 'convergence'. Convergence means the coming together of different technologies. This is possible only because today all gadgets, from TV's to computers, are speaking one language, the language of 0 and 1. The future for Zee is cold, it's ICE cold.


• Information -

(i) http://www.zeenext.com: This hybrid (horizontal and vertical) portal provides internet facilities such as searching, e-mail, etc. and will provide comprehensive information on a plethora of topics, eg- legal information on http://legal.zeenext.com

(ii) Sitinet: In the coming months 'Siticable' will be renamed as 'Sitinet'. Apart from cable TV it will now also provide "net through cable", video telephony, data transmission, etc.

(iii) ZED: Zee Education is in for major expansions, the aim is to make it a one-stop shop for all computer related education.

Zee also plans to build on the 'Zee News Channel' which was started a few moths back to compete with 'STAR News'.


• Communication -

(i) ICO Global: Zee will use this platform to not only provide satellite telephone services but to also provide data transmission services. Due to the highly congested nature of the internet data transfer speeds are slow. Companies may prefer to pay a little extra to achieve the same in a shorter time span using a satellite network such as ICO.

(ii) Sitinet: As mentioned earlier, Sitinet will provide vital communication mediums such as, the internet, phone services, etc.

(iii) Agrani: Agrani is a regional communication satellite. It is currently being build by 'Hughes' in the USA. After it is launched, it will be owned and operated by Zee. It will be the nation's first private satellite. Agrani's edge lies in it's dirt cheap rates, Rs. 4 per minute for a satellite call ! Agrani has Ku-band facilities which neither ICO nor Iridium have and can eventually be used for providing Direct-To-Home (DTH) services.


• Entertainment -

(i) Pay TV: The pay TV market is growing at a rate of 30% per year. Zee hopes to capture 30% of this fast growing business. In the next 10 years, Zee expects 10% of it's total revenue to come from it's pay services.

(ii) FM Radio: With the opening up of the radio market a lot of players have jumped into the market. Zee is one of them and soon introduce 25 FM channels.

(iii) TV channels: Zee's biggest market is the TV market. Zee's game plan is simple: dominate all segments. Hence, they have introduced channels catering to all types of people (Zee English, Zee Movies, Zee News, a whole bunch of regional channels under the brand name of 'Alfa', and the soon to come 'Zee Sports').

(iv) Publishing: Zee hopes to have a heavy presence in the TV programme guide market, so it recently released a magazine called 'TV Guide' which contains the schedule of all channels. They have also taken a step into the lucrative movie magazine business by launching 'Zee Premiere'.


These venture are expected to cost Zee something in the neighborhood of Rs. 7235 crores.

All one can say for Subash Chandra is that in a few years the man will be not only be one of the richest men in India but will also be one of the most influential.
COMPANY WITHOUT SUBASH CHANDRA & VICE VERSA

In the year 1999- shareholders of Essel packaging urged the management to reconsider their decision to appoint Mr. Ashok Kumar Goel as chairman and whole time director. Goel was to replace Subhash Chandra though he would continue to function as director on the board. The elevation of Goel was aimed at “harnessing human capital and resources available within the company and to provide wider opportunities for the existing senior management team”. The company realised that these changes would impart greater effectiveness in the management and will place the company in a stronger position for globalising its operations on a professional and independent basis. But the shareholders felt differently. They felt that Subash Chandra was the best man for the job. The reasons that made them feel so were:

 Thinking: His office is located on 35th floor of Oberoi towers and he feels that the view of the murky waters of the Arabian Sea is almost superb, i.e. he always thinks about being on the top.

 Techno-savvy: he is technology oriented, when other companies are booming in software, he is after “convergence”. Digital technology has enabled telephony, video and data services to converge and be taken to consumers all through a single wire. Digitisation and compression have made convergence possible.

 Brand name: Shakespeare said, “what’s in a name?”-Zee says it's all in the name. Zee has a strong brand name and brand position, in the minds of the viewers as well as the advertisers. Zee is not a final product, it is a process of brandisation of the channels. Zee’s attitude to give out the best and continuous improvement in its quality has made it reach out far ahead of other channels. Subhash Chandra says in a multi channel environment programmes would become brands and channels would merely become a ‘retail shop’ that would exhibit a number of good brands.

 Honest: Subhash Chandra and Rupert Murdoch’s deal was not followed by the latter. Star started telecasting Hindi programs in spite of its deal with Zee that it would not telecast any Hindi program on its channel in India. Subhash Chandra decided not to continue with such a company and quitted the deal, but with the benefit of acquiring a 100% stake in Asianet, Siticable and Patco. Recently he has nullified his deal with Asianet and they both have formed a strategic alliance where Zee will not compete with Asianet, but provide its expertise and technology know-how to Asianet for its growth.

 He is a risk taker: Subhash Chandra says “the joy of doing different things drives me, I like hitting roadblocks.” He has employed such people in his company who are risk takers, such as Mr. Deepak Shourie- he entered print media through 'India Today', started 'Music Today' and launched 'Time' magazine in India. Later he published his own magazine 'Outlook'. He has been executive president at “The Hindustan Times” for a short span.

Strategy of collaborating and not competing has worked out successfully for Subhash Chandra. Collaboration of Zee and Teledesic is working out for the company ICO Global. Now in the future we might see an alliance between Zee and Reliance.

To conclude: in the year 1999 Chandra bagged the Ernst and Young entrepreneur of the year award for India. Recently he was placed 6th in the best entrepreneurs of India. He is a first-generation and result oriented entrepreneur. He is a true media mogul. He is a good leader who believes in participative leadership.




BIBLIOGRAPHY


SEARCH ENGINES:
1. www.yahoo.com
2. www.altavista.com
3. www.zeenext.com
4. www.indiatimes.com

SITES:
1. www.indiainfoline.com
2. www.zeetelevision.com
3. www.jaring.my/star
4. www.exhibitionsindia.org
5. www.india-today.com/btoday
6. www.dhan.com
7. www.indianbusinessnews.com
8. www.indianhandbook.com
9. www.suite101.com
10. www.rediff.com
11. www.expressindia.com/fe
12. www.indiaserver.com
 
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