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Infosys, TV18 to share cost, benefits of Source 18 news
15 May 2007

Infosys BPO and TV18 have joined hands to set up a media-outsourcing firm, Source 18. Haresh Chawla, chief executive officer, TV18 Group, and Amitabh Chaudhary, managing director and chief executive officer, Infosys BPO, agree that it is a great partnership and will bring the best of both the worlds together.

CNBC-TV18 shares with domain-b an exclusive interview with Chawla and Chaudhary

What does this bring to the table for TV 18 and what sort of investments have you been looking at?
Chawla: I guess it is a massive space in the global media market. Clearly, media companies are looking at two reasons why this business is very important to them; one is, that everybody, including us, is realising that any content we generate, has to be available on multiple platforms and multiple devices for us to extract value from it. And that brings to fore, the issues of being able to process all that content in time for it to reach the market quickly.

That is one stream of increasing, as well as monetising the content that the media companies are generating. The other stream is that many media firms have got phenomenal amounts of archived content that is lying in an envelope format and is inaccessible to consumers.

The whole ability to convert that content and create a long tail of audio-visual content business is an opportunity. We believe that there is a massive global opportunity. Our business, TV18 will bring expertise of understanding the medium, as well as the knowledge on how to work with multiple platforms, along with Infosys and their understanding of how to scale up and handle these processes.

I think it is a great partnership for the market, which is expected to be fairly large in the whole data processing space, where text content was converted to digital format and now almost all text content is digital. A similar thing is likely to happen in the audio-visual space.

What does that bring to the table for you as a company and how much of an initial investment did you make?
Chaudhary: We are delighted to be a partner of TV18, because we are bringing the best of both worlds together. On one side, we have the domain expertise of TV18 and media space. On the other side, it is all about scalability and about bringing a processed mindset to the media entertainment companies.

We see this as a huge opportunity on the demand side. We have seen an overwhelming response from a number of clients. Media companies have brought globalisation to the public, but they have not globalised themselves.

Secondly, the investments are happening in the front office for a media company; the back office were never paid any attention and we can bring the expertise together to make it happen.

The investment will basically happen in terms of hiring the right kind of people who can take Source-18 to the next level. So we are putting a management team in place; some of it will come from us and some of it will come from TV18, in addition to which, we might hire some people from outside.

There is the spend on marketing, as well as hiring the sales people; so, the overall spend is not very large. Both the companies have signed up for the spend and we have already kind of been at it for certain period of time.

Based on the feedback from the customers, we are very hopeful that this will be a unique proposition in the media entertainment space and we want to be a very large player alongwith TV18 and we are quite hopeful of our success.

What role does Tangerine play?
Chawla: Tangerine is an outfit that is a technology leader in content repurposing. They have got expertise in the mobile space, ability to convert audio-visual content or films, or show episodes into multiple mobile formats and creating content for the mobile space.

I think the purpose of Source-18 is also to be able to address all the needs of media companies, as they have fairly specialised needs. So Infosys also brings an understanding of all other processes that a media company would probably need in the financial space or inventory management, etc.

TV18 brings in the creative and content repurposing understanding, while Tangerine also comes in with its understanding of technology and repurposing on the mobile platforms.

What are the percentage holdings in the JV? Is it a 50:50 JV at this point of time?
Chaudhary: No, we have not formally signed any JV; we have just brought the two companies together to create a Source-18 outfit. We will be spending money on our resources and TV18 and Tangerine will be doing on their own.

We are going to come up with a joint business plan and are going to share the cost of the business plan together. There are certain things, which will be done and will be housed in TV18 because they are good at it and some things will be housed in Infosys BPO. We did not want to go a joint venture way now, because sometimes the objectives are in conflict. So we have just brought a business plan together, which we call Source-18. Both parties will share the cost and benefits of the plan together.

You have touched on scalability; you have got one client - National Geographic. What does the road ahead look like, in terms of client addition for the rest of 2008? Can you share with us, any dialogues that you have had in terms of the number of people?
Chaudhary: We have had dialogues with a number of media companies and we also have certain media clients, who are a part of Infosys BPO; so do TV18 and Tangerine.

We are trying to see how this coming together of the two parties will allow us to work certain processes, which media may not have looked at.

We have media clients for whom we do finance and accounting work or ad generation work. We are trying to see if can we go to the media production side and take TV18 there and potentially, they can pick up some work on that perspective.

Now, TV18 has similar clients, as well as joint ventures of their own. And we will looking at how to go to their clients and the joint ventures and pick up work related to the enterprise side of the business. So we are very hopeful.

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Infosys, TV18 to share cost, benefits of Source 18