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The emerging ‘stars’ on the media horizon

Oct 5, 2000

One of the hot sectors currently is the media sector. We have always held the view that it is the broadcaster’s who make money in the long term. However, the fact remains that it is the content providers who are raking in the moolah, currently. This is primarily because there is a dogfight among the various distribution trolley’s. The bid values for cricket rights as well as for Hindi feature films and sports content have reached astronomical heights. Channels have also started to bid for fiction based programmes according to Ms. Ekta Kapoor, the promoter of Balaji Telefilms.

The catalyst for the change in perception seems to be the immensely popular game show ‘Kaun Banega Crorepati’ (KBC). Mr. Kunal Dasgupta CEO Sony Entertainment Television is of the opinion that with KBC redefining the entire genre of programming, the small screen has acquired gigantic proportions. The future prime time is going to be big budget, big promotion, big prizes and big stars.

The annual programming budgets of channels are going through the roof. Star Plus which reportedly had a budget of Rs 500 m has more than tripled its budget to nearly Rs 1.7 bn in the current year (partly led by KBC). This would be almost equal to Zee’s programming costs last year of Rs 1.7 bn. In the current year Zee’s programming costs are slated to increase almost to over Rs 2 bn. Sony, which lost its programming head Ravina Raj Kohli six months ago to Kerry Packer’s Channel 9 is also ramping up its programming. There have been rumours of the channel buying up the satellite rights, music rights and overseas distribution rights (via its parent Columbia Tristar) of Karan Johar’s new movie for over Rs 400 m! (Recently, even Mukta Arts sold only the music rights of ‘Yaadein’ for Rs 80 m to Tips Industries.)

We take a look at the activities of the emerging stars on the media horizon.

UTV: UTV is one of the six companies in the media group which operates under the brand name of UTV. UTV India is primarily in the business of content. Apart from television content the company is also one of the larger ad filmmakers of the country. It also does airline in-flight programming with 24 international airlines and dubbing for Disney and Discovery channels. The second company in the group is United Studios engaged in the post–production and the hardware business. This company does animation work for studios such as Fox (owned by Rupert Murdoch) and other US and Canadian animation companies. Recently the Star TV group took a 12% stake in UTV, which would make the group a preferred supplier to the Star TV group. The company was slated to make an IPO in July 2000, which has been rescheduled to early 2001.

B4U: Another of the forthcoming IPO’s, this has been promoted by Mr. Kishor Lulla, Mr. Bharat Shah, Mr. Gokul Binani and Mr. Lakshmi Mittal. Two of the channels are on the air curently, one of them being a music channel and the other being a general entertainment channel. Mr. Lulla who owns Eros International is one of the two distributors overseas (the other being Yash Chopra’s Yashraj Films). The channel starts with the advantage of a rich library of Hindi blockbusters (estiimated at over 900 movies) whose rights it currently holds. Moreover B4U has made a mark in the overseas markets such as the UK and USA before making its debut in India.

Sony Entertainment Television: A subsidiary of Columbia Tristar the channel was among the fastest to break even. However, the recent success of ‘KBC’ led to a dip in the prime time ratings of the channel. It also lost its programming head Ms. Kohli to Kerry Packer’s Channel 9. While the groups other channel AXN is slated to break even in the current year, SETMAX is however not doing very well. The channel is refurbishing its programming and is also offering other channels such as B4U and Sri Adhikari a collaboration that could enable it to form a bouquet on the lines of Star and Zee. (Sony already has a stake in the business channel CNBC India.) With annual revenues in the range of Rs 3.6 bn Sony would continue to remain a big player in the Indian cable and satellite universe.

News Television: A subsidiary of Rupert Murdoch’s News Corp, this company has come back from the dead in the current year with the launch of KBC. Along with the success of this programme it has managed to get three of its other prime time programmes among the Top 50 too. With the agreement with Zee off (this agreement restricted Star from becoming a full fledged Hindi Channel) and the group being among the first to make an entry into India, getting its programing mix right has provided a big jump to its revenues in the current year. Recently, the company also took a 26% stake in the Rajan Raheja promoted Hathway Cable & Datacom.

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