-Are business principles of different industries actually different?
-Are TV-viewing habits changing?
Tata Play CEO Harit Nagpal talks about his book 'Adapt: To Thrive, Not Just Survive,' his business wisdom, and more in conversation with Tamanna Inamdar.
-Are TV-viewing habits changing?
Tata Play CEO Harit Nagpal talks about his book 'Adapt: To Thrive, Not Just Survive,' his business wisdom, and more in conversation with Tamanna Inamdar.
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TVTranscript
00:00 [MUSIC PLAYING]
00:09 Welcome to this special show.
00:10 I'm Tamannaah Inamdar.
00:12 Today we're talking about challenges that businesses face
00:16 and how they can adapt to thrive, not just survive.
00:20 I'm talking about a book written by Harid Nagpal.
00:24 He is a CEO of Tata Play.
00:26 And he's with us in the studios to talk about what
00:28 the inspiration was behind these 10 stories
00:33 on disruptive businesses.
00:35 Harid, first of all, welcome to NDTV Profit.
00:38 Great to have you in our offices and in our studios.
00:41 Thank you so much.
00:42 Talking about adapting businesses.
00:44 And we'll get in a bit to your business
00:46 and how that has adapted as well to the current challenges.
00:50 But tell us a bit about the book.
00:52 Well, the book was an accident.
00:53 It really happened because I was constantly
00:57 challenged-- I've changed six industries over a 40-year span.
01:01 And every time I got into a new industry, I was told,
01:03 oh, this industry is different.
01:05 It is not like the others.
01:06 The business principles of this industry are very different.
01:10 They're not the same as any other industry.
01:12 And I would say, in the end, every business's job
01:16 is to serve the customer.
01:18 And the customer who buys a cola, buys a candy,
01:20 buys a car, buys a coconut oil, buys clothing,
01:24 buys everything.
01:26 He's got a decision-making criteria
01:28 as to what he's going to buy, what he's not going to buy.
01:30 So how can your principles be different
01:34 when the customer is the same?
01:37 And then I was challenged by generations.
01:40 You call them whatever name-- Gen Z, Gen Y, Gen whatever.
01:44 And everybody said, oh, the old customer used to be different,
01:47 but today's customer is very different.
01:49 And I said, look, the basics can't change.
01:50 The environment is changing.
01:52 The circumstances are changing.
01:53 The technology is changing.
01:55 But the basics of business cannot change.
01:58 You have to adapt to the new circumstances.
02:01 You have to adapt to the new technology
02:05 when you're going and serving the customer.
02:07 But the basics of the business in terms of who your segments
02:10 are, how your pricing is done, how your distribution is done,
02:13 how your branding is done, how you set up an organization,
02:16 what kind of a culture you create
02:18 to serve the customer in the end,
02:21 those things don't change.
02:23 So which is why I said, let me just put it down in a book
02:28 and adapt, happen.
02:29 But the form you've used is interesting,
02:31 because there are 10 stories.
02:33 And it's an easy read.
02:36 It's written in a way where there's not too much jargon.
02:39 You're actually telling people's stories.
02:41 Now, are these real stories?
02:43 Are these characters fictional?
02:45 Did all of this actually happen?
02:46 And why these 10 stories?
02:48 Almost everything that you read in this book in terms
02:50 of context, the content as such, is real.
02:57 I've either been through it, or I've seen
02:59 it happen in front of me.
03:02 The reason to use fiction was to just make
03:05 it interesting and digestible for the customer.
03:10 And my customer was a reader.
03:12 Because nobody likes to read preaching stuff, preachy stuff.
03:16 You give me a two by two metric and say,
03:19 this is how it happens.
03:20 I say, OK, guys, it was taught to me in my MBA
03:23 or in my class or whatever.
03:24 I know it.
03:25 It's OK.
03:26 It's past.
03:27 But if you set it into a context like a Hindi movie,
03:31 or whatever-- so I had to be a Salim Javed while writing this.
03:33 Thank you.
03:34 [LAUGHTER]
03:34 OK.
03:35 So there were some creative liberties
03:37 taken with what happened.
03:39 But the basics--
03:39 Of course, some amount of hyperbole,
03:40 some amount of dramatization is there.
03:42 But the facts are exactly how they happen.
03:47 So I found some of these very interesting.
03:50 Is it safe to say, even though the stories are
03:52 set in different geographies, they're all about things
03:55 that have happened in India?
03:57 And the examples you see here--
03:59 and one of them that stood out for me
04:02 was where you talked about a business which was trying to--
04:06 or a person who came from abroad and was trying to sell
04:10 frozen, ready-to-eat meats and food.
04:14 You said it in Bangladesh.
04:15 But it sounds like an India story.
04:17 It could be Turkey.
04:18 It could be Turkey.
04:19 But the lesson from it is, know who you do not want to sell to.
04:23 I think that's most important, because that's exactly
04:25 what happened in the story.
04:26 He's asked, do you know who you're selling to?
04:29 And he said, look, we'll launch and find out
04:31 who my customer is.
04:33 Now, I've seen many businesses do that.
04:37 I have a good product idea.
04:38 I fall so much in love with it that I
04:41 think everybody will love it.
04:42 And then we go and launch it.
04:43 And then we find two customers.
04:46 And this has happened so many times.
04:47 It happened to me.
04:48 It's happened to a lot of us, in fact.
04:51 We have no idea who my real customer is,
04:53 or is there a customer also out there or not.
04:55 I love the idea so much.
04:57 So you can fall in love with your concept of something,
05:01 and it may not work.
05:02 Now, I just want to contextualize
05:05 the idea of adapting your business in today's world,
05:08 where you are seeing industries sort of become
05:11 irrelevant and disappear.
05:13 In very short spans, you have threats
05:16 that you never even thought about.
05:18 Now, suddenly, you have a whole host
05:19 of industries who are wondering, AI, what does AI mean for me?
05:23 How do I adapt to AI?
05:25 And it's becoming ridiculous.
05:26 You're seeing the AI tag on everything
05:29 and any kind of product.
05:32 Tell us about how you adapt in a world like this.
05:35 So it is not necessary to just figure out who my customer is
05:42 and what his needs are when you launch a business.
05:45 It's an ongoing process, because the customer's life is also not
05:50 static.
05:50 He's also impacted by changes in environment,
05:53 changes in what is available to him, the technologies,
05:55 and his lifestyle.
05:57 And you need to be aware of what those changes are
06:00 so that you continuously adapt your offering
06:04 to his changing needs.
06:06 Now, one day, suddenly, if you wake up,
06:07 then my sales are dropping, sales are dropping,
06:09 or my customers are dropping.
06:12 And people are telling you, oh, there is a pipe.
06:14 That's what happened in one of the stories, where he says,
06:17 oh, the sales are dropping because we dumped
06:19 too much in the last quarter.
06:21 So it's only a pipeline effect that's happening.
06:24 The fact was, the customer's life was changing,
06:26 and he had started rejecting the product category.
06:28 And he realizes it a little too late when everything is over.
06:31 And he's not changed the product formulation, or the pricing,
06:35 or its distribution, or its promotion,
06:37 as in real time online, almost.
06:42 So keeping an eye on the customer
06:46 is not just important at the time of launching a product,
06:49 but it's very important as you go along.
06:52 You know, we're talking about adaptation.
06:54 And I have to ask you, Mr. Naqbal,
06:56 about your industry and your business,
06:59 where I think adaptation is just necessary to even survive.
07:04 The biggest conversation right now
07:05 is how many people have cut the cord?
07:08 Who's watching TV?
07:09 I mean, I work in TV news, and I hear that every day,
07:13 that [NON-ENGLISH SPEECH] How are you adapting to that?
07:17 I've been told.
07:17 Now, imagine if you had told that, how many times I
07:19 would have been told that.
07:20 Even my children said, dad, I assure you
07:22 you're in the right business.
07:24 But the fact still remains that, yes, there
07:27 are some people who are cutting the cord.
07:29 But is everybody cutting the cord?
07:32 And is that permanent?
07:35 You recently saw Asia Cup, World Cup, and IPL, all three
07:40 being offered for free online.
07:44 But the television industry, the paid TV industry,
07:48 where people pay 300 rupees, 350 rupees a month
07:50 to watch television, probably saw the highest growth
07:54 versus any previous World Cup or Asia Cup or IPL
07:58 that has been seen in that period.
08:02 So is TV dead?
08:03 There are 110 million people who are paying 300 rupees a month.
08:07 Homes, sorry, not people.
08:08 110 million homes that are paying 300 rupees a month
08:12 on an ongoing basis for television still.
08:16 There are new customers coming into the paid TV world
08:18 every day, which are more than the new customers coming
08:22 into the OTT world every day.
08:24 Because we run both the businesses.
08:26 I'm an aggregator for television.
08:27 We are also aggregators for OTT, paid OTT apps.
08:31 We have a business called Binge, which
08:33 we launched about two years ago, where
08:35 we aggregate the OTT apps.
08:37 And you could buy a bundle of OTT apps
08:40 and get a unified interface through which you
08:42 don't have to go from one app to the second to the third.
08:45 But I'm sure you're seeing a greater growth on Binge.
08:47 No, we're not.
08:47 No.
08:48 The new customers that are coming in onto television
08:53 every day is by a factor more than the new customers
08:58 who are coming into Binge every day.
09:00 Because what happens is we look around ourselves,
09:02 like the first story, and say, me and my friends
09:06 are buying frozen, ready-to-eat food.
09:09 Therefore, everybody in the country
09:11 must be buying frozen, ready-to-eat food.
09:13 So OK, if I were to put this another way,
09:15 you're saying India is maybe cutting the cord, but not
09:18 Bharat.
09:19 Bharat is still watching TV.
09:20 Even India is not cutting the cord.
09:23 So you think everybody who's living in Bombay is rich,
09:28 and everybody who's sitting in a village poor?
09:31 No.
09:33 That's not a fact.
09:35 See, there are people who drive a very fancy car,
09:39 an average car and a low-end car in Bombay.
09:42 There are people who take the metro.
09:45 There are people who take the cab.
09:46 There are people who take the bus.
09:48 There are people who take the auto.
09:50 And there are people who use the bicycle also.
09:52 All of us coexist.
09:54 If there are people buying scooters,
09:57 there are people buying cars, then
09:59 why are you building a metro?
10:00 And all around me in Bombay, when I see,
10:02 I see metros, new metros being built everywhere.
10:05 Why are you building those metros
10:07 if the cars and the scooters population in Bombay
10:10 is increasing every day?
10:13 All industries coexist.
10:14 All forms of delivery coexist.
10:19 No, but my question is, yes, you had maybe an unusual year.
10:23 You're talking about World Cup and all of these events.
10:26 World Cup next year also.
10:27 True, but this time, maybe there was more push
10:31 to watch it, et cetera.
10:34 Can you see this sustaining?
10:36 Why not?
10:36 I don't see any--
10:37 Everyone is saying this is a sunset industry.
10:39 You're saying, no, it isn't.
10:40 Are more people going to come on and watch TV,
10:44 or are they going to--
10:45 They are.
10:46 The current generation, is that going to not even
10:48 know how to change a channel?
10:49 See, your problem is that you are
10:50 watching the current generation in your own genre.
10:53 Correct.
10:53 There are various genres of the current generation also.
10:57 You live in South Bombay, and you
10:59 look at the current generation of your genre, and you say,
11:01 oh, all my friends are watching XYZ.
11:04 So everybody must-- everybody travels by car.
11:07 So who's using the metro?
11:08 No, the kids don't know what a remote is.
11:11 Your kids, not everybody's kids.
11:13 [LAUGHTER]
11:15 OK, so point taken.
11:17 So you're saying TV is here to stay.
11:19 The business is here to grow.
11:20 And OTT is here to stay also.
11:22 And both will grow.
11:24 Just as planes and trains are both growing,
11:28 TV and OTT will both grow.
11:30 If you're saying you're still growing,
11:33 how are you adapting to changing consumer tastes?
11:36 Where is the adapt part of the story?
11:38 We are improving the user interface, the picture quality,
11:43 the sound quality, and ability to search
11:48 for content on television.
11:51 Similarly, the Binge, which we launched a couple of years ago,
11:55 every day is better than what it was yesterday.
12:00 So you're just looking at what are the hurdles
12:03 that the customer is facing, what
12:04 are the expectations of the customer.
12:06 And you're improving the user interface, ability to search,
12:09 speed at which you can search for what you're looking for,
12:12 and the quality of the delivery.
12:14 Because your televisions are getting larger.
12:16 Your quality of sound speakers is getting better.
12:19 So I have to provide better quality of picture,
12:22 better quality of sound.
12:23 And you need to get-- for example, in television,
12:25 we used to say that you should be
12:28 able to reach the content that you're
12:30 looking to watch in five seconds and four clicks of your having
12:36 switched on the television.
12:38 And that was the attempt.
12:39 And that's how we designed the user interface.
12:42 In OTT, the number of pieces of content
12:45 that you have available to you is a million times
12:49 more than what you have on television.
12:51 Television only has 300 channels at a point in time.
12:53 The total of 900, a person subscribes to 300 or whatever.
12:56 So you have only one of the 300 to choose from.
12:58 In OTT, if you subscribe to a 22-app or 23-app pack,
13:02 you have a few million pieces of content to go through.
13:06 How do you get to the piece that you want to watch in five
13:09 seconds of having switched on your phone or your iPad
13:11 or your TV?
13:13 And that's what we're working on constantly.
13:14 That's what we are adapting to.
13:16 Because in the end, the customer is looking for quality.
13:17 And it's also a different experience, right?
13:19 In OTT, sometimes you don't even know what you want to watch.
13:22 You're just looking around.
13:23 You're grazing around.
13:23 So it's my job to figure out what you've
13:25 been watching in the past and serve you
13:27 on a rail from all these 27 apps that you subscribe to.
13:31 For example, if you speak Bangla and you're
13:33 interested in comedy--
13:36 so my past data tells me that you--
13:38 then I have to pull out Bangla comedies from the 27 apps
13:41 that you have subscribed to and put them
13:44 in one screen on one rail.
13:47 And chances are that you will pick up the latest one out
13:49 of that and start watching.
13:51 Rather than you having to go to one app,
13:52 look for Bangla comedy, second app, look for Bangla comedy,
13:54 third app.
13:55 And by the time you reach the fifth,
13:57 you've forgotten what you selected on the first one.
14:00 And that's happening with advertising as well,
14:02 more targeted advertising?
14:05 Targeted advertising, since you brought up the subject,
14:07 I'd say that started to happen on television.
14:09 We've been the first ones to just introduce
14:11 this a few days ago.
14:13 Because in the past, if an advertiser took a 30-second
14:16 slot on a television channel, then everybody
14:18 across the country, regardless of whether he
14:20 was in the market for that product or not,
14:23 had to see that ad.
14:25 Now, if a soap company has three levels of soap--
14:27 one at 5 rupees, one at 15 rupees, one at 35 rupees--
14:30 you had to advertise the 5 rupees soap separately,
14:32 15 rupees soap separately.
14:34 And the 35-rupee guy never got a chance to advertise
14:36 because he was told, [SPEAKING HINDI]
14:40 So you don't advertise.
14:41 You go direct or something like that.
14:43 We've now introduced a service whereby an advertiser can
14:48 take one slot, and his signal is split into three beams
14:53 when the ad starts.
14:55 So you are a 5-rupee customer.
14:56 You will see the 5, potentially.
14:58 He's a 15-rupee customer.
15:00 He'll see the 15-rupee soap.
15:01 And somebody else who's a 35-rupee customer
15:04 will see the 35-rupee.
15:05 So they'll spend less?
15:06 You're saving the advertisers money.
15:07 No.
15:08 On the contrary, more advertisers
15:09 will come in because the efficiency of advertising
15:11 is getting better.
15:12 You don't have to buy three spots
15:14 to reach these three segments.
15:16 Same goes for cars.
15:16 Same goes for everything else.
15:18 If I've got three products--
15:21 all three need not be soaps.
15:23 They could be three different products.
15:24 Or three different advertisers could come in here and take
15:28 three different slots.
15:31 So you're getting more efficient.
15:33 So more people will find use for advertising.
15:37 OK, so the kind of targeted ads that we all get on our phones
15:41 is going to happen on TV as well?
15:42 It's starting to happen on television now.
15:44 All right.
15:46 Let's talk a bit about the business.
15:48 The big buzz last year was the IPO.
15:52 Then it got delayed.
15:54 Is it coming back now that market conditions
15:57 seem very sublime?
15:59 Everyone wants to list right now is
16:01 Tata Play making a return to the primary market.
16:04 Anything you can share?
16:05 I hear about my IPO from the news channels all the time.
16:08 So we're asking you.
16:10 We're asking you up front.
16:11 The speed with which-- the frequency with which you
16:13 keep talking about it, maybe one day it'll happen.
16:16 That's neither here nor there, Mr. Nakhut.
16:18 It is neither here nor there.
16:19 Is the Temasek issue sorted?
16:22 The stake issue sorted?
16:23 I really don't know about that.
16:24 Frankly, I'm an operating person.
16:26 So I don't get into the investment part,
16:29 the investment relations part of it at all.
16:32 OK, but an IPO is still on the drawing board at some point.
16:35 It's not off the drawing board.
16:36 I'm not aware of anything that's happening as of now.
16:40 OK, I had to ask.
16:41 I had to ask.
16:42 So exciting things happening at the company at Tata Play.
16:45 You're saying TV is very, very much alive.
16:48 What is the next five years looking like for you?
16:51 As we talk about an aspirational India,
16:54 we talk about a premiumization in every category.
16:57 Is there a concern that as smart TVs become more accessible,
17:00 more will quote unquote cut the cord?
17:03 If they cut the cord, they will come to binge.
17:08 So I've got an OTT aggregation also available with me.
17:11 But the fact remains that there are 140 million homes
17:14 in this country out of the 300 million homes
17:16 who are yet to buy the first TV.
17:17 You be mindful of that.
17:22 So the runway is still very long.
17:23 Maybe they will never buy a TV.
17:24 They'll be happy with their tablet.
17:25 If they haven't been able to gather enough money
17:27 to buy a 5,000 rupee TV, how do you
17:30 expect them to subscribe to broadband and OTT content
17:36 and smart TV at the same time?
17:41 They'll watch stuff on their phone.
17:44 That requires--
17:45 On platforms, on your social media platform.
17:47 These are the homes that probably don't even
17:49 have access to broadband, even mobile broadband as of now.
17:54 So that will be the first step for them.
17:55 The first step is normally-- the first durable
17:58 that is bought in a home, data tells us,
18:00 is a television before even a fridge is bought
18:03 or a washing machine is bought or even furniture is bought
18:05 when you go into rural homes.
18:07 There are 140 million homes that are yet to buy their first TV.
18:11 That's the runway.
18:12 There are 45 million homes or so who have bought the TV
18:16 but have not subscribed to pay TV.
18:19 Some of them will move to pay TV.
18:21 And some of the pay TV will--
18:24 pay TV homes will subscribe to OTT aggregations
18:28 also in addition.
18:30 Some of them may drop the television
18:32 and subscribe only to OTT aggregation.
18:34 So we are in television aggregation
18:36 and we are in OTT aggregation both.
18:38 OK.
18:39 So you're ready to adapt to the changing customer needs.
18:41 That's what we've been doing all this while.
18:43 All right.
18:44 Thank you so much, Mr. Harit Nagpal,
18:45 for speaking with us today, coming down to our studios,
18:48 of course, talking about your book
18:50 and what's happening with the business.
18:52 Thank you very much.
18:53 Thank you for having me over.
18:54 [MUSIC PLAYING]
18:57 (upbeat music)
19:00 you