Sony Entertainment Television (SET) is to pick up a 20% stake in CNBC India. CNBC India is a joint venture between CNBC Asia and TV 18. While the former holds a 51% of the equity the latter controls a 49% stake,
TV 18 is a content provider providing both business and the entertainment programmes. It produces entertainment programmes for Star (Amul India Show, Kinetic Mega Show), Sony (Bhanwar) and business programmes for CNBC India.
SET has so far been the agent for CNBC India collecting subscription money from cable operators as well as selling free commercial time on the channel. The agreement between CNBC and Sony is based on an accelerated commission basis i.e. the higher the revenue that SET earns for CNBC the higher the rate of commission for SET. The taking of a stake by SET takes the agreement a step forward by giving Sony a stake in the revenues of the channel itself.
SET has three channels in place in India, the Hindi entertainment channel, the English movie channel AXN and the sports/events channel called SET Max. It does not have a presence in a news/current affairs channel unlike both Zee and Star and neither does it plan to have one. This arrangement gives it a stake in a business news channel.
What is not known is what will be the stake that CNBC Asia and TV 18 will give up for giving SET its stake. A bigger question is the strategy of SET itself. Does it plan to offer its own distribution trolley on the lines of both Zee and Star, which offer a bouquet of channels? This is because the management had earlier said that the company does not want to be a distributor but create a demand pull for its top of the line content. In that case the company would have to make a choice on having a presence either on the Zee or the Star platform. The current move indicates a preference towards offering its own bouquet of channels.
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