MUMBAI: NDTV plans to set up a separate entity for its film production business where NBC Universal will come in as an equity partner.
The company is currently in the process of developing and producing various scripts. But as the business scales up, there will be need for capital infusion.
“NDTV Imagine Films is working on some projects. We are, however, at the early stage of the film production business. It won’t be right to comment on what shape this will take. But NBCU films division is a potential partner for this venture going forward,” says NDTV Group CEO KVL Narayan Rao.
NBCU has already pumped in $150 million for an effective indirect holding of 26 per cent stake in NDTV Networks, the holding company for NDTV’s entertainment and lifestyle channels, digital media and other interests, including products and services.
For the movie business, NBCU intends to have funding outside this commitment.
On the entertainment front, NDTV will, however, currently focus on growing its Hindi general entertainment channel NDTV Imagine. In the pipeline is a big-ticket celebrity show which it hopes will shore up the ratings.
In its news operations, NDTV has embarked on a cost cutting and rationalisation exercise. Sensing a slowdown in advertisement revenue growth due to the overall market conditions, NDTV feels it is in a better situation because it has stayed out of debt and is sitting on Rs 6.6 billion of cash in its books.
“In these times, it is better to be conservative. The focus should be on consolidating your position and sustaining and maintaining your businesses. We have started rationalising the operational components of cost. Even for distribution expense of our channels on cable networks, we are staying within budgets. We expect some amount of consolidation to take place in the news business in future,” says Rao.
NDTV will launch MetroNation Chennai by the end of this fiscal. “Our focus will be on MetroNation Delhi and Chennai,” says Rao. After Chennai, NDTV had plans to roll out the city-centric channel in Mumbai.
Indiantelevision.com had earlier reported that NDTV would set up a joint venture company with The Hindu Group for the Chennai channel. NDTV would hold 51 per cent and Hindu Group the balance 49 per cent.
Meanwhile, NDTV has incurred a consolidated net loss of Rs 1.19 billion for the second quarter of the fiscal due to the entertainment side of the business being in its early growth phase. Revenues, however, rose 65 per cent over the year-ago period to stand at Rs 1.28 billion for the quarter.
On a standalone basis, NDTV’s net loss was at Rs 130.40 million for the quarter ended 30 September 2008 as against a net loss of Rs 39.50 million in the prior year period.
Total Income from operations increased to Rs 739.10 million, from Rs 677.7 million in the second quarter of FY’08. Expenditure was at Rs 900.2 million, up from Rs 699.3 million.
NDTV board has decided to split the company into “news and other businesses” and “entertainment and specified allied businesses.” There will be “no regulatory restrictions on FII/ FDI investment in the entertainment media” and this will enable the “company to bring in strategic partners for businesses in any/all the non–news businesses.”
