Sanjay Gaikwad takes Rotarians through his journey in the media and technology industry
Sanjay Gaikwad
Fellow Rotarians, it is my pleasure to introduce Sanjay Gaikwad, who is the recipient of the PP Sohrab Godrej Award for Science and Technology. And we are really honoured that Nadir himself has come to present this award in true ‘Godrej’ fashion. I must compliment the Awards Committee for choosing such a wonderful candidate and someone who truly represents new India. Sanjay graduated with a degree in chemical engineering from University of Mumbai’s Department of Chemical Technology (UDCT) and then did his MBA from Jamnalal Bajaj Institute of Management Studies. After spending the initial years of his career in print media, he joined Zee Telefilms, where he was responsible for the digitisation of Zee network and its international rollout in the US and UK markets. He was then promoted to the post of Chief Operating Officer (Special Projects), where he conceived the first organised Indian lottery network, Playwin. Soon, the entrepreneurial bug caught up with him and he went on to found Valuable Group. In 2005, he created UFO Moviez, which changed the way movies were distributed digitally.
— Rtn. Jagdish Malkani
Good afternoon, everyone. Thank you very much for the beautiful introduction, Jagdish. I feel honoured to have received the award from Shri Godrej and this prestigious Club.
Today, my topic is technology-enabled business innovations. I have always been passionate about technology, even though my father wanted me to be a doctor. I was never interested in medicine. He then encouraged me to take up chemical engineering from UDCT, which I did. I became a chemical engineer and worked for the Godrej Group. After doing my MBA from Bajaj, I decided to pursue a career in the arena of my passion — technology.
I have been in the field of media and technology for over 25 years. I started my career in the print media; I worked with the Indian Express newspaper for over five years. I then joined the Zee Group and my growth there was rapid; I became the President of Technology in just 18 months. I was responsible for the modernisation of the Group’s technology, digitisation of the channel and launching their US and UK operations. I also launched their internet-over-cable business. And then of course, I introduced Playwin, India’s first online lottery.
After a few years, I moved on and joined Apollo Tyres in Delhi. But unfortunately, things didn’t work out and I had to come back to Mumbai. That is when I met my current partner, Narendra Hete, who encouraged me to start a business and together we launched our first business initiative in January 2004 — an infrastructure BPO venture for the lottery industry. We were soon running 10,000 terminal networks across the country. Since the lottery business is highly regulated by the government, we were aware of the high risk involved. More people started joining our business and we realised we were responsible for them. We were forced to think beyond our business ideology and realised that there are two kinds of businesses that people can get into — ‘value shifting’ and ‘value creation’. After gauging our strengths, we decided to focus on a value creation business and came up with the motto ‘Imagine, Innovate and Inspire’. Value creation business is a continuous process and requires innovation. Since I was from the field of media and technology we decided to go ahead with ‘technology-enabled business innovations’. We started focusing on using technology more innovatively. UFO Moviez was a result of this process. We found out that the producer, distributor and exhibitor were caught in a vicious circle due to the use of analog prints. If the budget of the movie was low, they had to stick to staggered releases, which means you can release only 150-200 prints. Because of that there used to be a gap in demand and supply. Pirates took advantage of it and the commercial value of the movie started dipping after the first week itself. The Box Office collection was low and that hurt the producer and distributor. Even in the exhibitor’s case, if he didn’t get the movie in the first week, his centre was stamped as a non-release centre. Most of the single screen theatres started shutting down. That’s where the opportunity of digital cinema emerged. We had to create a sustainable business model around that. We decided to invest and own the digital cinema infrastructure.
Digital cinema is a great platform for advertisers and hence, we designed it as a media platform. We created a system for flexible advertisement scheduling. To address this business model, we also developed compression technology, satellite-based delivery system and created a smart card-based paper-show licensing system. It was a win-win situation — we created value for everybody. The money which was going into the hands of pirates came back to its rightful owner. Earlier, on an average, a big movie was released only with 400 to 500 prints. These days they release more than 3,000 prints. Movies are doing a business of more than 100 crores because of the widespread release.
So we had created a B2B platform called UFO Moviez. What next? We launched the by-invite Club X membership for home shows of new releases. It’s for celebrities, corporates and politicians, who can’t go to the theatre to watch a movie. The members are charged on per show basis. A large share of the amount we charge goes to the producer and distributor.
Our final aim is to go to the consumer home. The home video technology changed from VCR to VCD and DVD players. And today we have moved to digital media. Everyone is talking about Apple TV and Netflix.
In 2003–04, Disney developed a technology called MovieBeam, a video-on-demand service. We acquired MovieBeam, which back then only had a push video-on-demand technology. We re-engineered their platform and created a more innovative digital media platform. Instead of a service-based model, we made it an amenity-based model. In a flight, you watch a movie for free. So why not in a hotel room?
We also realised that India was an entertainment-starved country. The biggest problem was that there was no proper broadband service. Internet services were used only for basic data services. Internet Protocol television, for instance, never took off. Radio Frequencies cable was the only broadcast medium. So we used the existing RF network and took it forward. We initially launched this (VoD) service in Mumbai and soon plan to take it to the rest of the country. We will provide the users with unlimited access to movies and television programmes. We have a dedicated section for children. We also have introduced a karaoke system. So there is something for everyone.
Coming to Edubeam — it is an interactive learning platform for virtual classroom teaching. The technology we developed helps you connect with classrooms in rural and remote areas. The classroom is equipped with a large screen and the teacher can address students and the students can, in turn, ask questions in real time. Today, Edubeam has been implemented in approximately 200 schools.
Thank you once again for this honour and an opportunity to share my journey.
Excerpts from the Q&A session:
Q: You said that, in India, we don’t have proper internet speed. How will 4G impact your model? Because like Netflix everything else will be easily available. How do you intend taking it forward?
Sanjay: Broadband service can be wired or wireless. You are talking about 3G and 4G, which are all wireless services. In the United States, 90% of the Netflix consumption is through the wired broadband service. Only 4% is wireless because the data delivery cost on a wireless service is very expensive. A usage of 50 to 60 GB per month will cost you anywhere between $40 to $50. And I am talking only about the data charges.
Whereas, in a wired service, all of it is inclusive. That is why I feel wired broadband services are necessary. 4G technology is excellent for casual viewing but not for a longer period of consumption. The data charges will burn a huge hole in
your pocket.
Q: How is your video-on-demand service different from that of Tata Sky’s DTH? They have similar features such as kids zone and karaoke.
Sanjay: What you see on Tata Sky is called neo video-on-demand. The service that they offer has a limited number of options because the movies are transmitted in a continuous cycle and the consumer can join that cycle at any given point in time. You have to choose from 10 to 15 movie options. It is not a ‘true video-on-demand’ service.
What we are talking about or what Netflix is doing is ‘pure video-on-demand’.