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Colors Gets A New Nayak

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Just when colors was within striking distance of overtaking market leader Star Plus comes the announcement of a change of brass. On 31 March, founding CEO Rajesh Kamat quit the strongly performing entertainment channel to join global media fund CA Media. Kamat was also the COO of Viacom18, the joint-venture company that owns Colors. Taking over the reins of Network18 Group's flagship is long-time adman Raj Nayak.

Colors, in its short history of less than three years, has been an exceptional success story under Kamat. Launched in July 2008 in a crowded Hindi television market, it galloped ahead with innovative programming and a string of expensive celebrity shows. In Kamat's words, the strategy of the channel was the 3 Ds — differentiation, disruption and distribution. The main driver of the channel, Balika Vadhu — a series that examined problems of a child bride, pushed Colors to No. 1 past Star Plus by March 2008. It clicked, as the concept was different. Star Plus again overtook Colors a year later, but the latter has always been a strong No. 2.

Kamat said he enjoyed setting up Colors, but then the next step — "the quasi-entrepreneurial opportunity" that gave him personal equity in CA Media — was too attractive to resist. CA Media is co-promoted by former News Corporation CEO Peter Chernin and former Star boss Paul Aiello. It was launched in November 2010 as a fund that will invest in, buy and manage media firms. "It is a team of four. I will identify opportunities and, along with (former Goldman Sachs banker) Jesse Jacobs and Aiello, we will jointly take a call on whether to enter a specific company," Kamat told Businessworld.

For Kamat, who has headed content firm Endemol and has done marketing for Star, the high-risk world of finance and investment is a far cry from running a channel. "It is a new game. It is one area that I still have to experience," says Kamat.

For Nayak, too, Colors is a challenge. It is the first time he will be holding independent charge of a television network, though his rich experience will back him up. Nayak spent 10 years in Star and was officially No. 3 as executive vice-president in-charge of advertising sales. He had a stormy exit in 2003 after Star contested Nayak joining NDTV in the Bombay High Court. His assignment as CEO of advertising unit, NDTV Media, was never smooth-sailing, and Nayak left again in 2008 after differences cropped up with NDTV chairman Prannoy Roy. Nayak then went independent, forming a media consultancy and ad sales firm, Aidem. Interestingly, Aidem continued to handle ad sales for all NDTV channels even after Nayak's exit from NDTV Media. But not for long; the account has gone to Star recently.

What will help Nayak at Colors is the fact that most of Kamat's talented lieutenants have not jumped ship. Ashwini Yardy, head of programming, as well as Simran Hoon, head of ad sales, will continue as part of Nayak's leadership team. There are signs that group CEO Haresh Chawla will play a much larger role in Colors now.

Nayak also has the advantage of inheriting from Kamat not only a popular channel, but one that is in financial order. Two weeks ago, Colors, with gross rating points of 300, sailed past Star Plus to become No. 1 for one week before falling back again the following week.

For FY 2011, Viacom18, for the first time, made a handsome operating profit of about Rs 100 crore, money that Viacom has not seen for its ventures in India for long. Colors' operating profit was even higher, Rs 125 crore, say insiders. But some of it was shaved off due to losses borne by siblings MTV and Nickelodeon.

(This story was published in Businessworld Issue Dated 02-05-2011)