Exclusive Interview: Universal Networks International’s Roma Khanna

After steering the remarkable expansion of Universal’s global channel portfolio in the past few years, Roma Khanna, the president of Universal Networks International, sees room for yet more channel launches, while focusing on adding first-run programming to build channel brands into strong local competitors.

Universal Networks International (UNI) has five core channel brands: Universal, Diva, Syfy, 13^th Street and Studio Universal. When Khanna took over her role in 2007, Universal operated 14 unique versions of those worldwide. Now there are 70 for the time being. Most of those are one country/one language. The acquisition of Hallmark Channels international parent Sparrowhawk in 2008 added about 20 channels. Many more were added as HD feeds of existing SD channels. Universal had an established business in Western Europe and with Sparrowhawk acquired a very strong business in Eastern Europe.

The first priority was looking at what the group could do in Asia, Khanna says. In Asia there was one channel and now there are three Southeast Asia feeds—Universal, Diva and Syfy. There is a large office in Singapore with about 50 people and another office in Japan (which has its own channel). The company will probably launch 10 to 20 new channels in the region, Khanna says. There is still opportunity to add more, but that is “not a sustainable way to grow” beyond the next couple of years, she adds.

 “The hub of the wheel is the brand,” she says. “We have a global vision of the brand but localization is important. We do not have a shoehorn approach. The ultimate goal is to be as specific as we can be.”

The main strategic task is identifying where growth potential lies. The question is partly whether growth will come from adding more channels or going deeper into markets. Channel-wise, Latin America, which has had capacity issues, is coming to the fore as digital platforms expand opportunities. And of course there are the new opportunities everywhere on DTT and IPTV. There is potential for gaming and social networking, which are especially relevant for Syfy.

Around the world, some UNI channels are basic and some extended basic, depending on the region. In Asia, where Diva has the broadest appeal, it is basic, and so is Universal, while Syfy is extended basic or even premium.

The maturity of the particular market is a big factor. In the more mature markets of Western Europe, competition for exclusive programming between platforms within pay TV—the old cable versus satellite scenario—has largely given way to a perception that exclusivity is less important than growing the whole market for pay TV versus free TV and DTT. In emerging markets, there is more fragmentation and sometimes competition is fierce. Consequently, UNI’s channels are sometimes exclusive to platforms.

Everywhere, branding is all-important. “Brands make pay-TV work,” Khanna says. “Platform operators, the so-called gatekeepers, used to have ultimate control, but that has changed. Now it’s about tastemakers. It’s about being an editorial voice. The voice says: ‘I will navigate this for you.’”

In developing a bigger voice in the market, pay TV is now driving television content creation.

Three years ago, the bulk of programming on UNI’s channels was second or third or fourth run. Now there is first-run content. The production business is headed by Michael Edelstein as president of NBC Universal TV Production. Haven actually started on Syfy internationally in 2010 and went to the U.S. market afterward. The show is being sold worldwide by co-producer eOne Television. Syfy was also the first channel to show V around the world. Rookie Blue (which airs on ABC in the U.S.) was launched internationally on 13^th Street.

Fairly Legal is launching in early 2011 on Universal internationally as an exclusive premiere, following its debut on USA Network. Another new one is Shattered, coming to Universal in February, produced by UNI, CanWest Global and eOne. The trend applies to non-scripted programming too.

How did this new production business arise? First, there was change in thinking and attitude. UNI decided that its international channels were a first-run business. The second and determining factor was scale. Going from 14 to 70 channels brings a whole new level of efficiency and financial clout. “Scale is the key to everything,” Khanna says. “It enables you to act bigger than you are in any given territory.”

Pay TV has begun to change the Hollywood model, she says. “You can’t pay for an original production in one country, but you can do it across 70. Producers used to expect production costs to be covered in one shot. Now it’s about monetization in small pieces. No one piece of the puzzle has to stand up alone.” UNI will advise scripted producers not to unload worldwide distribution in one go. “We tell them we need to be first and exclusive but you can have it afterwards,” she says. “We’ll pay part of the cost and you can have the rest.”

A key element in building the original-programming business is a policy of committing to a full season. Broadcast networks tend to commit by episode. That does not work for the international market. UNI needs at least a 10 to 13 episode commitment for a new show to work for its international channels. And the door is open for new projects.