Grabbing the digital era by its horns

Sameer Pitalwalla, a graduate of University of Westminster co-founded Culture Machine in early 2013 along with Venkat Prasad to create a digital video company that creates entertainment for the internet generation. Prior to the inception of Culture Machine, Pitawalla headed the digital media business at Disney UTV and was responsible for setting up the digital video business at the Times Group.

At Disney UTV, he was responsible for building the digital media business for the entertainment channels in the company's broadcasting portfolio, the mobile app business as well as getting all of Disney's properties to leadership positions in social media.  While working with the Times Group, he built the video business with the launch of the first YouTube channel in the country that became the top-ranked in terms of viewership for three years.

With Culture Machine, Sameer hopes to influence generations of South Asian audiences with cutting edge story telling. In this interview with Swetha Amit, he talks about the idea behind the inception of Culture machine, his views on net neutrality and the scope for revolutionising the internet space.

Culture Machine is a new age digital video company for the net savvy generation. How did the idea initially crop up?
I had set up my own studios inside Disney when I was creating programming for digital videos and platforms like YouTube. Seeing the success of that inspired me to take it to a larger scale and that's how the idea of Culture Machine came about. From a business model perspective, it is not a new concept. There have been networks which have emerged in the last four or five years especially in the West, which create programming for YouTube.  So I would say that Culture Machine was inspired from the way the original content had been done.    

Tell us something about your background?
I started off as a writer and I used to contribute articles for supplements in The Times of India as well as The Indian Express. From thereon I did a whole lot of odd jobs while I was studying abroad.  When I came back to India, I took up a job as a subeditor for DNA in Mumbai.

After a while I decided to give up journalistic writing and move on to the business side of it. That's when I transformed DNA digital paper Zoom. In Zoom, I took on the job of building the business and in a span of  four-and-a-half years I was running the digital business in terms of the entire television network. Then I moved to indiatimes where I built the video business until I joined UTV. 

I had worked on digital media for a large part of my life, having built businesses and mostly working on converting traditional media to digital. I then realized that the medium itself was evolved to a large extent and saw some promising opportunity to build it up even more especially for the net savvy generation as the traditional programming wasn't appealing to their tastes.  So once Disney took over UTV, I quit my job and started Culture Machine.

When you initially started Culture Machine, did you even predict that internet and social media would dominate the era like the way it is today?
Well the internet was big back then and it was only bound to be bigger. I could see what was happening in the West. My co-founder Venkat who lives in California, could see how this whole phenomenon was growing as he was within the eco system. We also realised that there was a lot of potential in the South Asian market with India being among the Top 5 with regards to having viewership contributors to YouTube and Facebook.  So we knew it was just a matter of time before it picked up steam. So we are glad that from a timing perspective, we are neither too late nor early.

Setting up a startup with a novel idea comes with its share of challenges and risks. So what were your feelings with regards to culture machine during its initial stages of conception?
Well the fear of failure was there. You see, essentially all start-ups are just thoughts until they become full-fledged businesses.  Each stage of their metamorphosis is a struggle where one faces problems like either not having sufficient cash or not having a business plan that works.

So it's a sort of struggle against gravity where circumstances are not necessarily in your favour. So, you need to do what it takes to survive in such a stage. The first step after the idea culminates is to give oxygen to that idea, let it breathe, grow, mutate and have a life.

After the life comes into existence, you make sure it survives. It's similar to giving birth to a child where you feed it, nourish it and make sure it finds its way into the world. Once it does, it no longer needs you. So I think the good sign of a business is when it no longer needs the entrepreneur-which is me in this case.

Private equities and venture capital firms seem to show a keen interest in start-up companies these days. Did culture machine also take a similar route with regards to its funding? If so, how much convincing did it require from your part?
When we initially started, most investors already assumed that this start-up was not going to succeed.  Most investors tend to take a bet on the credentials of the start-up team, as that's the only thing they can bet on.

From that perspective Venkat and I were lucky as we both had a background stamp of YouTube and Disney which worked for us as it held a certain reputation in the market. So when they did a reference check, it helped in getting that initial round of funding.  Had we been straight off from college, it would have been a harder decision for investors as there was no reference or background.
 
A lot of trials and tribulations, which one tends to face in funding can be overcome if entrepreneurs already have a work experience and background, accompanied with a little bit of success.  Quality benchmark with a brand is the key factor here. It certainly wasn't easy for us but I would say that our experience with Disney and You Tube helped us to a great extent in convincing these investors.

How do you see the profitability of Culture Machine so far?
I think this entire industry is still in its early stages to be able to talk numbers. However I do see this as a highly profitable enterprise and a lot of potential for growth.

Our idea is to get towards this profit margin and also balance it with the ambition of growth which we are seeing in the market. The whole purpose of business is to eventually make profit as you ultimately want to get back what you invest in. One thing is the investors' money and on the other hand, we also invest a lot of our time in such ventures. So you got to get back the yield in the form of actual tangible change and revenue. These are the two things any business aims to achieve. So yes I do see the profitability to a large extent and my aim is to revolutionise entertainment.

What is  the revenue model of Culture Machine? Who did you pattern yourselves after?
I think the original kind of business is something which has already been existing in the west. However it has evolved to a great extent in the last few years because the world has changed. Therefore the model of this business also has evolved dramatically.

The way we built ourselves is to look at ourselves as a technology company that produces media. We have used technology to understand our audiences and create content.  I believe that it has helped us scale this far and will help us scale further in the future.

While creating content for the videos, how do you manage to judge the pulse of what the audience wants and what will go viral?
We have deals in place with a lot of these platforms, which helps us get access to what audiences are watching, what content they resonate with and what matters to them.

So we are able to use those insights to get a sense of what to create. We work with a large network of YouTube creators in order to get them to understand and produce the programming. We also have our own studios which helps us control and create programming backed by the data which we know will work with certain people. 

Sometimes while designing content for videos, harmless humour often tends to create controversy, hurting sentiments in the process. So how do you manage to overcome these hurdles?
There was in fact a video on Delhi girls and somebody did take offence to that.  In retaliation to that was a video put up by two Delhi girls who protested saying they were not how it was shown in our video.  The way to handle this is to explain that the idea behind such videos is not to offend for the sake of doing so but to just voice opinions on something.

Now it's inevitable that there will be counter opinions on this particular voice which gives out a message. I think that's the whole idea of a democracy. Also right now with the internet, we still haven't seen the tip of the iceberg in terms of social revolution.  Most of these videos make an impact on the urban clan as of now. There still remains a large magnitude of the population which needs to get net savvy and once that happens, you will see the actual effect of social revolution.

Success of these videos depends largely on hit rates. So what parameters do you use to measure the success rate of these videos?
We use three parameters. The first one being reach- which is measuring the combination of viewership and watch time.  We see how many views a video gets and how long people have watched it for. For instance if it's a 10 minute video, then we measure whether people have watched it for 9 minutes or just 2 minutes, etc. 

The second parameter is engagement, which is analysing whether the video has made enough of an emotional impact. We see whether people have liked or disliked the video, posted their comments on it, etc. The third parameter is advocacy, which is to measure whether the video has made enough impact on people. So we see aspects like the number of shares and the number of people who have shared a particular video.  So using the above parameters, we measure the success rate of our videos.

How many brands have you worked with so far and who does your main client profile comprise?
Well our client profile changes depending on whose campaigns are active. We have an active base of around 80 brands and a total of 150 whom we work with. These include Procter and Gamble, Johnson and Johnson, Unilever, Dove, Myntra, Tata Motors, Times Group, Fox Star, Havells, Philips, Sony and Microsoft. So yes we do have a good client base.

What makes Culture Machine unique and different from its counterparts?
What makes us unique is the fact that we have always looked at building technology. There are three places where one can look at building technology. The first being the distribution layer which includes social media sites like Facebook, twitter and you tube. The second place where most networks tend to build technology is the management layer where mostly the operations part gets taken care of. The third is the content layer which is where the innovation is required which we strongly believe is fundamental. You see, a media company has the ability to understand the audience. So we have built our technology which first helps us understand our audiences so that we can have control over the narrative, and, second, helps us to create content scale which again we have built.

There is a lot of commotion over the concept of net neutrality today. Being from a similar medium, what is your take on this?
There are two different perspectives to this. From the perspective of a consumer, one wants a free and open internet. I personally see nothing wrong with that and from that point of view, consumers are absolutely right in making that demand. 

But a part of me also looks at it from the eyes of a business stakeholder. You see from a business perspective, we need to make more than what we have. It's not just enough to get people to invest in our business as there is a point in time where we need to make those returns.

The business operators also work in an environment where bandwidths do not exist like the way they do in the West. There is limited amount of spectrum given and the expectation of quality of service and pricing is enormous. The fact remains that no one really expects the consumer to understand all this and therefore, it becomes easier to blame the business.

I think that a balanced view should be taken.  It's difficult to do that, as it requires one to sit on the fence and for that, one needs to understand the business. One cannot expect the average consumer to do that.  Personally I don't think the consumers are wrong. I am just able to look at it from another perspective because I am in this business. I am not saying I agree with the business operators but yes I can understand their viewpoint as well. Having said this, at the end of the day, there needs to be a solution in achieving what the consumer wants as he/she is ultimately the king.

Lastly, what are your future plans with regards to the growth of Culture Machine?
At present, we are creating the internet culture and a part of the narrative. So we definitely want to be the ones who are inherent to the fabric of that narrative and I think that's what todays' media is all about. It creates as much as it gives back and eventually becomes a part of it. So we want to be that media company which dominates this space.