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  • ‘We should leverage on each other’s strength and boost the sector by providing the consumer a common platform of services’ : Viren Popli – Star senior VP, Interactive Services

    ‘We should leverage on each other’s strength and boost the sector by providing the consumer a common platform of services’ : Viren Popli – Star senior VP, Interactive Services

    For the last six years, Viren Popli has been an integral part of the Star India system. As the international business senior VP, Popli reported to Kaushik Dalal before moving to the Wireless division to work with Sumantra Dutta. As he puts it, those were days when he worked quietly behind the camera and enjoyed the ‘privacy’ too.

     

    The so-called privacy was soon broken when he was made the head of Interactive Services in February 2005. As he recognizes the tough task he has at hand to build this emerging business as a strong revenue stream, Popli settles down to give his first interview to the media.

     

    At the Wireless division, Popli and his team are making efforts to create a highly sought after destination brand for mobile content, Star 7827, to offer specially created and aggregated content for the mobile screen available through SMS, WAP, Web and voice platforms. In this interview with indiantelevision.com’s Bijoy A K, Popli shares Star’s plans and talks about the evolving digital market.

     

    Excerpts:

    Star India has been spending the last three years to prepare the first draft of its wireless and interactivity plan. And as the first step, the revamped version of Star’s wireless platform 7827 has been unveiled. What went into the research? What are the key findings?

    Several things went into the research. Firstly, we have tried to analyse the effectiveness of areas such as voting, gaming and content. For example, on the gaming front, we have tried to look at the effectiveness of text games and java games. We wanted to know how the product actually sells itself.

     

    Secondly, we have done a lot of focus group studies and discussions across the country to gather useful feedback. Lastly, while doing the research, we did a series of internal studies which covered the whole News Corp platform. News Corp entities across the globe are doing various things on mobile. Hence, we were able to exchange ideas.

     

    Research provided us with a total new insight into the market. For example, very few people in this country know how to download using a mobile. There are booklets and help manuals released by mobile phone companies, but you won’t get a solution in any of those. Someone had to teach people to effectively use the mobile phone in such practical situations.

     

    People are willing to learn technology and pay for it, if they are provided the right content. What kind of content is desired by the mobile community? What is the age group structure here? What is the significance of the word of mouth communication in this segment? Through our research, we got an idea on the kind of efforts we have to make to provide the right response. We also learnt that flexibility, speed and relevance are the most important pieces of this business.

    Could you elaborate on your digital and wireless strategy?

    Our first goal is to make our mobile service 7827 as the most preferred platform both for content owners/mobile operators and consumers. The next focus will be on content. I would rate content space as the biggest challenge in the wireless business.

    What is the next step?

    We want to deliver an all-pervasive service available on all platforms, whether it is text, web or WAP. For an average Indian, Web and WAP are high-end technology words. Hence, we also want to put together an easy-to-access interface method that is more accessible.

    How much of investment has gone into revamping 7827?

    The project requires a significant funding. I can’t provide you the actual figures because we are still in the investment mode. We want to expand in the areas of technology, content and marketing. This is an ongoing process.

    What are the issues that will foster an even faster mobile market growth in India?

    The mobile business has grown tremendously, but the industry is just three or four years old. It will still take some time to evolve. The value chain and the relationship need to fall in place. The audio visual content should reach the masses. The market requires effective strategies and marketing initiatives to attract consumers to audio visual content. This will be crucial for the market to grow.

     

    3G is still some distance away as far as India is concerned. The Indian market has explored 2G and 2.75G technologies really well, but I would say there is still room for improvement. These technologies have still juice in them to drive innovative concepts and deliver better results.

     

    Instead of waiting for the arrival of 3G, we should explore the 3C business, which is Cool Connected Consumer. Mobile phone is no more a mere communication equipment. We change our mobile phone models in such frequency, while we never make an attempt to change our fixed phones. Here the content, as the driver of such a phenomenon, takes centre stage. As a content provider for wireless, we want to make sure that the market will not run short of content. That is what we are doing here. We believe that, content can force the technology to catch up or take a leap.
    ‘We have learnt that, flexibility, speed and relevance are the most important pieces of this business‘

    Will web streaming as a concept catch up in India?

    It is a tremendous opportunity. As I said, it again depends on technology and the technology depends on the content. If the content is really attractive, we will have more and more people opting for the broadband service.

    What is your take on the global scenario? Is there any learning from the China market, where Star Wireless is already operational?

    This space is all about intelligence and experimentation. One interesting development has happened in the international space. Globally, most of the mobile companies are getting out of the content sector. The operators have found working on the content space — which is not actually their main area of strength – very distracting. Across the platform, the players have decided to focus on their main areas of strength.

     

    In India also, mobile operators will have to move out of the content space. It would be very difficult for them to run content services. Focus on a niche area is very important in this sector.

    Who are the key players occupying the digital and wireless space?

    Yahoo is very strong in the communication space, while Google reigns supreme in search. Entertainment companies are aggressively eyeing the digital space. Fox, for example, has taken major inititatives. There are also many small companies. But once consolidation happens, we will have four or five big aggregators and a range of secondary companies working around them in niche areas.

    What is the role played by News Corp. in Star India’s interactive initiatives?

    There is a macro direction element present in the whole process. News Corp. as a company has been a great idea exchange platform. It is all about sharing ideas and capitalising on the ideas and thoughts exchanged through this vast network. Since each individual country has its own local environment, we won’t be able to accept all the ideas generated. We will have to see what survives in our environment. However, the global platform has helped us tremendously to share and generate information and ideas.

    News Corp recently acquired the social network portal Myspace.com. Are you looking at creating a similar networking platform in India?

    The concept of online social networking has been very successful in the West. Star India is also exploring opportunities to launch a social networking portal on its mobile platform.

    Star India launched mobisodes last year. Now it is more than six months since this happened and how was the experience? How much did the initiatives contribute to Star India’s revenues during the fiscal?

    It did really well. We had significant number of video downloads, though the lack of technology awareness and penetration limited the exercise to certain areas. However, I would say, the initiative covered its costs and made a profit.
    ‘Interactivity works for a channel or a programme, when the viewer chooses mobile phone over remote control‘

    You are about to launch your mobile voice platform. What are the growth plans for this?

    We have signed agreements with Hutch and BSNL, while more deals are on the anvil. We will have a different short code on Voice. On the technology front, there is bit of a problem since BSNL has a separate short code digit structure. In that case, we will have to market two different short codes for Voice. At present, we are trying to sort this issue out.

     

    We are also working on the Voice content. The radio channel will offer a mix of created, aggregated and Star India content.

    How do you plan to leverage Star India’s programming dominance with the mobile initiatives? Are there plans to make mobisodes of your popular soaps including Kyunkii…??

    All our programmes can go to mobile as well. At the same time, variations of these programmes can also go. For example, it would be interesting to watch Tulsi’s (the lead character in Kyunkii..) fashion transformation over the years in a mobisode. We can present alternative storylines through mobisodes. Lots can be done in terms of this content variation.

     

    We have plans to do a lot of things this way. But, I am not in a position to offer a timeline since, once we start such an initiative, we will have to be consistent with our delivery. We can’t provide Kyunkii.. on mobile for a week and forget about it. We will have to offer the Kyunkii.. content six days a week. It requires significant amount of planning and improvisation. The editing of an episode for mobile itself would consume significant amount of time. Hence, to make a formal announcement, we want to be confident of our delivery cycle.

    Does it also work in reverse? Will 7827 also help in driving up viewership?

    It can be assumed that the consumer downloading a mobisode of our programme is a loyal viewer of our shows. The interest in the programme must be inspiring him to download the mobisode of that particular programme. Hence, we believe that mobile holds tremendous potential to boost viewership and audience base.

     

    Now, how to take it ahead? Here is where interactivity comes in. We are looking at various methods to boost interactivity by way of the existing mobile technologies. Interactivity works for a channel or a programme, when the viewer chooses mobile phone over remote control. There are these traditional methods such as contests and special schemes. Interactivity can be a more powerful weapon, if used effectively in breaks. We are looking at various strategies to improve on this front.

    Any SMS-driven shows from Star? Are you planning any mobile-based gameshow at the moment?

    I have nothing concrete to offer you at the moment. But we are definitely exploring this segment.

    Has Star recently bought any show formats for the mobile and internet?

    We keep scanning the environment. But nothing significant has caught our attention as of now.

    Are you planning to work with film producers for mobile and other interactive initiatives?

    We are looking to work with every content provider in the country, including filmmakers and producers. In fact, we are very keen to work with film producers.

    How much have broadcasters raked in as revenues through SMS services during the last fiscal? How fast will it grow this year?

    It is in the range of Rs 750 million to Rs 1 billion. With more initiatives coming in, we expect this to double this fiscal.

    In the next five years, how much will the mobile division contribute to Star India’s revenues?

    Mobile will evolve as a strong revenue stream for Star India, after advertising and subscription. It is difficult to forecast the figures, because the technology will undergo lot of changes during the next five years.

    Will it be totally subscription driven or is there a scope for ad revenues in the immediate future?

    In the mobile content platform, there have been many experiments to generate advertising revenues. There is this method of inserting brands in content, but it is not generally very effective because of the space constraints. That is just one way of doing it. We believe that the real opportunity is yet to happen and there should be a better way out. Marketing and branding should be handled in a smarter way in this case.

    What is your take on in-game advertising?

    In-game advertising can be effective in the case of console and PC gaming. But, again, when it comes to mobile, we have space restrictions. The brand will look too small to generate appeal. Branded games can be one way out. Still, how many people would want to download a branded game? This space requires an effective strategy.

    What are the plans in India for the Lost game?

    Buena Vista International Television (BVITV) owns the rights for the game and as far as I know, they are very keen to launch the product in India.
    ‘In the next five years, mobile will be a strong number three as Star India’s revenue resource, after advertising and subscription‘

    Are there any Indian shows that you feel have potential for this kind of an extension?

    Absolutely. I would say, most of our shows have the potential to be extended as various mobile initiatives. But we haven’t really zeroed in on any particular show as yet.

    Have you struck deals with international companies?

    The plan is to aggregate the best content from across the world. We are planning associations with companies working in the areas including content, applications, technology and games. We haven’t reached a position to name any particular company as our associate yet.

    How would you like to explore the interactive market segments such as video sharing, messaging, connecting and email through your digital initiatives?

    We are an entertainment and information service provider. We would stick to what we are doing at present. There is no plan to offer services which are outside our purview.

    How do you rate competition in this segment?

    All the players have competed really well to create their own space in the mobile industry. The next incremental step should be a leap in terms of strategies. All of us should come together to empower the business. We should try to leverage on each other’s strength and boost the sector by providing the consumer a common platform of services.
  • Star’s news partner ABP charts expansion plan

    Star’s news partner ABP charts expansion plan

    MUMBAI / NEW DELHI: The Rupert Murdoch-controlled Star’s news partner ABP Group is drawing up expansion plans envisaging niche news channels, film production and a sustainable online and mobile business model.

    The Kolkata-based media company is also said to be mulling hiving off its English newspaper The Telegraph into a separate company to be able to attract investments from financial institutions, both domestic and foreign.

    That a blueprint of business expansion by the group is being readied was confirmed to Indiantelevision.com by the Sarkar family-controlled ABP Group’s president Pramath Sinha.

    Asked about the Indian languages being considered for expanding existing TV news business, Sinha said, “We are currently exploring a number of options, but have not firmed up on any particular choices yet. Language options include English, Marathi and Gujarati, among others.”

    More importantly, he said that the ABP group was “examining the strength of some thematic niches (read TV channels)” where a final decision will be taken based on the “long term prospects” of each of these and after “discussions” with Star.

    Hong Kong-based Star group, News Corp’s pan-Asian venture, is a 26:74 joint venture partner with the ABP Group for owning and managing news channels in India. The JV is called Media Content & Communications Services Ltd (MCCS).

    Presently, MCCS runs the Hindi Star News and Bengali sibling Star Ananda, which is co-branded on the names of the two companies.

    The expansion plans were shared by Sinha in a lengthy presentation to senior colleagues last month where the basic refrain was that the ABP Group can aim to emerge as the Time Warner of India, straddling various segments of the media and entertainment industry.

    When Sinha was asked by Indiantelevision.com whether the company was also looking at foraying into the entertainment side of TV business, he did not deny it outright. “Our core competence is in the realm of information TV and that will be our first priority. However, we are open to exploring other options in consultation with our partner, Star TV,” he said.

    Though, according to Sinha, it was “too early to comment” on forays in film production, he admitted, “(We’re) still examining whether it makes sense.”

    Will the group look at acquiring an existing film production house or set up an entity for this? Sinha replied, “We are open to both approaches in all our businesses.”

    Apart from these, the group is likely to start its FM radio operations in the second half of 2006, having bagged a licence for Kolkata through Ananda Offset, a group company.

    Print medium and online plans

    The ABP Group, which owns Ananda Bazaar Patrika, the largest circulated Bengali daily, and The Telegraph, the largest circulated English daily, in West Bengal, is looking at expanding existing business operations to leverage new technologies.

    Having launched a WAP edition of The Telegraph in August 2004, the group is bullish on doing the same with its other media products to make the online and mobile business sustainable.

    “Given the tremendous growth in mobile subscribers, we are very committed to offering value to our readers, viewers, and listeners through this medium. All our brands are or will rapidly become mobile-friendly,” Sinha says.

    The business model would range from revenue sharing (with telecom companies) to advertising to simple subscription, Sinha explains, adding that at this point all this is more of an “essential component” of offline offerings, which complements the traditional delivery channels.

    Still, what has excited many ABP doyens and senior journalists are talks about The Telegraph being hived off into a separate company, attracting funding from financial institutions for expansion and giving the newspaper a more national look with editions from places outside West Bengal.

    The possibility of publishing The Telegraph from Delhi and Mumbai has been debated within the group for over a decade. However, dwelling on hiving off The Telegraph from ABP, in true corporate style Sinha said, “This is speculative and I have no comment.”

    In the mid-1990s, the ABP Group had hived off its business newspaper Business Standard into a separate entity and finally sold it off to Kotak Mahindra, primarily a financial and banking company. Presently, London’s Financial Times holds approximately 14 per cent equity stake in Business Standard Ltd.

    But what about investments to fund expansion plans aimed at monetizing existing and proposed services and products? “Cannot comment,” Sinha cryptically says.

    As an afterthought, he adds, “In today’s day and age, this question (on quantum of investment) is irrelevant. There are enough resources and more than enough opportunities. The critical issue is having the right people to make (the) stuff happen. I believe we have an excellent team in place to achieve our goals.”

    The ABP Group owns and publishes the likes of Ananda Bazaar Patrika, The Telegraph, business weekly Businessworld, Bengali literally and women’s magazine Desh and Sananda, respectively, apart from a kids’ magazine.
    A snapshot of the portal www.anandautsav.com

    It also has business interests in MCCS, anandautsav.com and Heyya, which is a mobile internet portal. Does that make ABP ready don the mantle of the Time Warner of India?

    “Who would not want to be that? It is great that you think us worthy of the question. But why not? We have a great starting point,” Sinha exults.

    He adds, “First, we are one of the oldest groups in the country – several (media) companies of our vintage have gone extinct over the years. Second, we are one of the largest in terms of size, not just in print, but across media and entertainment we would be clearly among the top 10 in the country. Third, and most importantly, we are the most diverse — from dailies to TV, from radio to WAP.

    “And, our diversity is not for diversity’s sake alone. Each of our properties are the leading ones in their genre. That is a great starting point that only we can claim.”

    Time will only tell whether promoter Aveek Sarkar’s patronage and Sinha’s business acumen combine to make dreams into full blown realities.

  • Star One plans revival in Mumbai

    Star One plans revival in Mumbai

    MUMBAI: After striking a truce with Mumbai’s cable operators and gaining prime band occupancy on their networks, Star One is making all efforts to regain lost ground.

    In order to refresh the memories of the Mumbai viewer, Star One has slotted a series of marathons and re-cap episodes of its key properties including The Great Indian Laughter Challenge Dwitiya (TGILCD), India Calling, D.O.N, Yeh Dil Chahe More and Kya Hoga Nimmo Ka.

    “Due to a disagreement with the cable trade in Mumbai, we were absent from the prime band. It crippled the channel’s growth in a big way. Now we have reached a settlement and are back on the prime band. Mumbai has always been an important market for the channel, delivering almost 30 per cent of the Hindi Speaking Market (HSM) ratings. Now we look forward to regaining our position,” states Star India EVP marketing Ajay Vidyasagar.

    Speaking on the impact that Mumbai’s absence from the picture made on the newly launched shows such as Kya Hoga… and Heart Beat, Vidyasagar says, “Those brands didn’t get an opportunity to connect with the Mumbai viewers.” On the revival of the channel, he counts on TGILCD to play a key role. “This property will be the lead vehicle for us to drive audiences in Mumbai back to the channel.”

    On the marketing and promotion front, the channel will be triggering a multimedia campaign covering print, radio, outdoors and internet. “We will begin with a print campaign tomorrow (1 June) leading up to the finals of TGILCD. This will be followed by a series of radio activities. Celebrities such as Hrithik Roshan and Diya Mirza will also come on board for promotions. We are planning extensive ground events to promote TGILCD,” says Vidyasagar.

    On the latest introduction Heart Beat not figuring in the recap exercise, Vidyasagar explains, “It is a bit tough to get into a wild bunch of repeats. We don’t want to offer an over dose of the strategy.”

    When queried on the fate of those upcoming shows including Sixer, which were put on hold post the cable disturbance, Vidyasagar said they were put on hold due to creative reasons. “There weren’t too many shows, which we put on hold. Yes, due to certain creative reasons, we have delayed certain shows. It will require certain time to recraft those shows,” he says.

    As already reported by Indiantelevision.com, Star One was pushed into the hyper band since January as Star India was asking for an increase in payout from cable TV operators. Star was blamed by the association of distributors and last mile operators in Mumbai for forcing the second bouquet comprising channels like Star One and Walt Disney on cable operators.

    Opposition was also against Tata Sky, in which Star is a 20 per cent joint venture partner, for approaching housing societies with the proposal of offering residents a central dish antenna through which it could connect individual installations and offer direct-to-home (DTH) service.

  • Government mulls USO Fund for Prasar Bharati

    Government mulls USO Fund for Prasar Bharati

    NEW DELHI: Private broadcasters and big MSOs in the country might soon be called to lend a helping hand in the financial restructuring of pubcaster Prasar Bharati.

    According to one of the options relating to funding of Prasar Bharati, suggested by a government panel, a corpus can be created from contributions from the broadcast and cable industry on the lines of the universal service obligation (USO) fund in the telecom sector.

    Five per cent of a private telecom operator’s annual revenues go towards the USO fund, which is used to finance new rural telephony projects identified by the government.

    The panel on Prasar Bharati’s financial restructuring has suggested that private broadcasters and MSOs can be asked to contribute between 5-10 per cent of their annual revenues for a USO fund-type corpus, which can be used to support the over 45,000 workforce of the pubcaster.

    Prasar Bharati, which manages Doordarshan and All India Radio, is in the middle of a debate over ways to augment its earnings.

    This recommendation, along with others in a nearly 300-page report, is being presently studied by a group of ministers (GoM) before the issue is taken to the Union Cabinet for a formal okay.
    The GoM met briefly last week, information and broadcasting minister Priya Ranjan Dasmunsi told Indiantelevision.com. He did not give any time frame on taking the Prasar Bharati matter to the Cabinet.

    However, industry players observe whether there would be increased accountability of Prasar Bharati if a USO fund is created via private sector players’ contribution to partly fund pubcaster’s activities. More importantly, whether the funds would be properly used.

    According to Hindu Business Line, of the Rs 107.53 billion collected by the government from telecom companies in the form of USO fund since its inception in 2002-03, a staggering Rs. 70 billion is yet to be disbursed.

    The newspaper quoted the Telecom Regulatory Authority of India as saying that undisbursed amount is estimated to cross Rs 250 billion by 2010 against a total collection of Rs. 375 billion, which means only 48 per cent of the fund is expected to be utilised for extending telephone services in the rural areas. The numbers assume significance even as the digital divide between rural and urban is ever increasing.

    Meanwhile, letting the pubcaster tap the capital markets and levying a cess on sale of every TV and radio set in the country are amongst some of the other options suggested by the committee on financial rejig of Prasar Bharati.

    Though Prasar Bharati closed FY 2006 with record-breaking revenues of over Rs 12 billion, its expenses are so huge that the government is finding it difficult to bridge the chasm between income and expenditure.

  • DD’s DTH to expand bouquet to 50 channels in June

    DD’s DTH to expand bouquet to 50 channels in June

    MUMBAI: DD Direct Plus, the direct-to-home (DTH) service of Prasar Bharati, will undergo its first phase of expansion in June this year. As per the plans, the number of TV channels on the DTH platform are being ramped up from 33 to 50 while the radio channels will go up from 12 to 20.

    “DD Direct Plus will increase its strength from 33 channels to 50 channels by the end of June this year. The new channels joining the DTH platform will be from Hindi as well as the regional markets,” Doordarshan director general Navin Kumar tells indiantelevision.com. He, however, did not name the new channels which were hopping on to the DTH offering.

    The private broadcasters joining the DD Direct Plus bouquet will be paying Prasar Bharati annual fees of Rs 10 million, according to Kumar. “Prasar Bharati charges the private broadcasters part of DD Direct Plus annual fees of Rs 10 million and this is applicable to even the new channels joining the DTH platform,” Kumar says.

    In the second phase of expansion, DD Direct Plus will add up a further 50 channels to take the total DTH bouquet to 100 by the end of the year.

    What about offering FM radio stations? There is no development yet on DD Direct Plus’ plan to sign FM radio stations, Kumar says. Under the present policy, FM radio stations can operate only within a particular geographical area and cannot have a pan-India presence. This had come as a stumbling block for Prasar Bharati when it planned to offer space to private FM channels in DD Direct Plus.

  • TV Today announces 29 May launch of Dilli Aaj Tak

    TV Today announces 29 May launch of Dilli Aaj Tak

    MUMBAI: The Aroon Purie promoted TV Today Network has officially announced the launch of its fourth 24-hour news channel, targeting the local Delhi/NCR audience, for 29 May 2006.

    The announcement confirms a report put out earlier by Indiantelevision.com. The network has named the NCR channel –‘Dilli Aaj Tak’, which will cover all aspects of life in Delhi and the National capital region. The positioning of the channel is ‘Aap Ka Shahar, Aap Tak’. The look and feel is stylish and vibrant, and the content is led by utility in the capital region.

    TV Today Network CEO G Krishnan says, “We have consolidated our position of being India’s No. 1 news network through our three very differently positioned news channels. Getting into the regional news space was the next logical step for us, and what better market to enter than Delhi? Delhi’s rising consumerism, booming economy and rapidly improving infrastructure, among other things, have made it a city to reckon with at a global scale – the need exists for a credible news channel that can cover life in the capital.”

    TV Today Network chairman and MD Aroon Purie says “The media industry in general and the television industry in particular has been booming; news space has seen an exponential increase in the number of players. In this clutter, consumers look for credible sources of information, and TV Today Network is committed to provide just that.”

  • TDSAT puts a lock on any DTH operator carrying Star channels

    TDSAT puts a lock on any DTH operator carrying Star channels

    MUMBAI: As the second direct-to-home player Tata Sky gears for launch, the Telecom Disputes Redressal and Settlement Tribunal (TDSAT), in an interim order passed today, has ruled that Star channels will not be made available to any other DTH platform.

    The development took place as Star India gave an undertaking in this regard to the disputes tribunal, which posted the case for hearing on 3 July on a petition filed by the Subhash Chandra-owned Dish TV.

    If this order is interpreted in another way, it could also mean that Tata Sky would not be able to launch before 3 July and if it does so, it would have to do without the Star channels. Its test signals for the service also would not carry any Star channels till 3 July.

    Contacted by Indiantelevision.com, a Tata Sky spokesperson refused comment saying they had not received any notification from the tribunal on the matter. Star officials also declined to comment.

    The Chandra-promoted ASC Enterprises, which owns a DTH licence to operate a service under Dish TV brand, had moved TDSAT on 25 April alleging that Star was flouting the sector regulator’s (Telecom Regulatory Authority of India – Trai) diktat on making available all content to all platforms on flimsy grounds.

    The ASC petition states, “The unreasonableness on the part of the respondent is evident from the fact that the respondent has laid down impracticable and unreasonable terms and conditions for supply of its bouquet of channels.”

    The petition also mentions that discussions with Star were initiated by Dish TV in December 2004. Star is 20 per cent shareholder in Tata Sky, while the remaining stake is held by the Tatas.

    Meanwhile, Dish TV’s negotiations with Discovery-Sony joint venture One Alliance, which distributes signals of channels such as Sony, MTV, Nick, SET Max, Discovery to name a few, too, has not been concluded despite industry sources indicating that a formal announcement was due any time.

    Dish TV has also won a favourable judgement from TDSAT that has directed MTV Networks to make available MTV and Nick to Dish TV on a commercial basis. MTV has appealed against this order in the Supreme Court.

  • Katzenberg announces India animation intent

    Katzenberg announces India animation intent

    CANNES: It’s official and its coming from DreamWorks SKG cofounder Jeffrey Katzenberg’s mouth. “We are coming to India in a big way,” he told indiantelevision.com at the Cannes Film Festival where he was promoing Over the Hedge. “In what shape or form we don’t know as yet, but we will.”

    Katzeberg said he had been to India three times in the past nine months. “India is a very exciting place and has potential for great animation…no other place has greater potential than India for great creative work,” he explained. “You have an excellent pool of creative talent. ”

    He however added that Dreanworks foray into India would not be in the form of outsourcing. “:It will be definitely more than that.”

    Katzenberg pointed out that what animation is witnessing is its second renaissance. “The first wave was in the eighties and was more handdrawn,” he pointed out. “Today, animation s driven by digital, by computers. It is a great time for animation. Some of the finest movie producers are taking it up. We at Dreamworks Animation are committed to producing at least two animation movies a year.”

  • Prasar Bharati financial rejig awaits GoM nod

    Prasar Bharati financial rejig awaits GoM nod

    NEW DELHI: A group of ministers (GoM) looking into a possible financial restructuring of pubcaster Prasar Bharati to boost its revenue generation capacity has said no final decision has been taken on various options.

    On Thursday, Prasar Bharati, which manages Doordarshan and All India Radio, made a presentation to the GoM highlighting its plus and negative points, including possible ways to augment revenue generation that is lagging far behind annual expenses incurred.

    While confirming that a presentation was made to the GoM, Prasar Bharati CEO KS Sarma told indiantelevision.com that it was made clear to him that the ministers would look into the issue before taking the package to the Cabinet for a final approval. Sarma added amongst the many options presented before the GoM were levying a one-time cess on TV and radio sets in the country and tapping the capital market.

    These options, Sarma said, were in line with a report prepared by a panel, headed by information and broadcasting secretary, set up to look into the financial restructuring. The report is now being studied by the GoM.

    Asked whether the GoM and then the government are likely to okay the financial restructuring of Prasar Bharati during his tenure, which ends 30 June 2006, Sarma replied in the negative, hinting that the issue is likely to take more time.

    Amongst the options, as has been reported by indiantelevision.com last year, is also one that envisages the government holding equity in the pubcaster against assets, which will facilitate a capital restructuring of the financially beleaguered Prasar Bharati or Broadcasting Corporation of India.

    A government official added that media reports on financial restructuring of Prasar Bharati were “premature.”

    In the meanwhile, reports on levying a cess on TV and radio sets to give a fillip to Prasar Bharati revenue has almost set the cat the pigeon with stiff opposition coming from consumer electronics manufacturers.

    However, present I&B minister Priya Ranjan Dasmunsi’s predecessor Jaipal Reddy had been against levying a cess on TV and radio sets. His justification: the cost of collecting this cess from all over the country would be more than the actual amount collected.

    British broadcaster BBC is partly funded through this mode where Englanders pay a nominal amount at the time of buying of a TV or radio set. A recent proposal of the Tony Blair government to hike this amount has been widely resisted British citizens.

  • ‘Zee Telefilms to see ad revenue growth of 12 – 15% in FY07’ : Rajiv Garg – Essel Group CEO of corporate strategy and finance

    ‘Zee Telefilms to see ad revenue growth of 12 – 15% in FY07’ : Rajiv Garg – Essel Group CEO of corporate strategy and finance

    Cable and direct-to-home (DTH) is where Zee Telefilms Ltd (ZTL) chairman Subhash Chandra is planning to put the accelerator on. Wire and Wireless India Ltd (WWIL), the cable outfit, will enjoy an investment of Rs 5 billion to lay out a digital platform, gear up for triple play and expand in value-added services. And to fight Tata Sky in the DTH business, he will pump in Rs 2.5 billion over two years.

    Zee News Ltd. (ZNL), which will have news and regional channels under its umbrella, is looking at a turnover of Rs 2.5 billion this fiscal. The listing of these demerged companies is expected to be in September-October.

    In an interview with Indiantelevision.com’s Sibabrata Das, Essel Group CEO of corporate strategy and finance Rajiv Garg talks about the reasons for the demerger and the expansion plans of these separate entities.

    Why did Zee Telefilms Ltd (ZTL) decide to demerge its businesses into separate entities?
    The driving argument for demerger was that all these businesses had become big in themselves. Huddled together under Zee, they were not given the right strategic focus as the company was very broadcast-oriented. In cable, for instance, we felt that we were not doing justice to its growth potential. Also, in certain lines of activity the government regulations were impinging upon the growth prospects of the company. The idea was to see if we could create that focus and comply with the government guidelines. With so many technological advances taking place, we felt it was the right environment to carry this out. We decided to create independent governing structures and managements, delink cable from broadcasting, and put together certain news-bearing channels into an independent entity.

    Why was the direct-to-home (DTH) business housed in complex structures which did not allow for tax efficiencies?
    The idea was to provide specialist services in specific entities. As the competencies lay in them, the DTH business was spread across three outfits. Integrated Subscriber Management Systems Ltd, for instance, has an expertise in such areas like subscriber billing. Siticable has been negotiating content from the time the cable industry began in India. New Era Entertainment formed the marketing and ad sales arm. The aim was to create a revenue-sharing arrangement with ASC Enterprises Ltd (Ascel), the DTH license holder. When we did this structuring, there was no service tax applicable to the industry which was introduced later. We did not anticipate taxation developments to happen so quickly and cause financial inefficiencies. Besides, demerger will provide clarity of structure and add value to shareholders.

    Since regulation allows for a broadcast cap of 20 per cent, why didn’t ZTL hold stake in the DTH business?
    It would have happened in due course. We were in no hurry as we wanted to present the DTH platform as broadcast neutral. The internal intention was to acquire equity once the key relationships came in.

    What does the demerger process in the DTH business involve?
    In the first stage, Siticable will hive off its cable TV business into Wire and Wireless India Ltd (WWIL). The residual Siticable and its wholly owned subsidiary New Era Entertainment Network Ltd will then merge with Ascel, thus consolidating all the DTH operations under one company. Zee Telefilms shareholders will get 23 shares of Ascel for every 10 shares held.

    How did you arrive at this exchange ratio and why did you prescribe for a subsequent cancellation of shares?
    It is the independent valuer (Deloitte Haskin & Sells) who came up with this ratio. As for cancelling three of every four shares held in Ascel, this is to bring back the capital base to the pre-merger level. The paid-up equity of Ascel would have bloated to around Rs 1.66 billion after the merger, up from the base of Rs 411 million. This would have been too large an equity for a company of this size. So we wanted to compress the capital base. We could have given a predetermined base, but didn’t know the ratio the valuer would arrive at.
    ‘DTH revenues will touch Rs 8 billion in FY08 as subscribers rise to 3.15 million and ARPU to Rs 310‘

    Zee’s operating revenues from the DTH line of business was Rs 818 million in FY06 while losses stood at Rs 790 million. What is the investment plan and how do you see subscribers and average revenue per user (ARPU) size up over the next two years?
    The net expense for DTH operations so far is Rs 3.8 billion. We are planning to pump in a further Rs 2.5 billion over the next two years. But we are sitting on a dynamic model and if Tata Sky and us are aggressively competing, there is a possibility of the subsidy amount further increasing. It is a factor of what strategies we adopt to develop our subscriber base. By the end of FY06, we reached close to one million subscribers. We project a gross revenue of Rs 3.2 billion in FY07 on a subscriber base of 2.4 million and an ARPU of Rs 250 (up from Rs 190) mainly because of the launch of value-added services. And in FY08, we see ourselves growing to a revenue of Rs 8 billion as subscribers rise to 3.15 million and ARPU to Rs 310.

    When do you expect to sign up with Sony and how do you see content growing?
    We expect Sony to happen within a month. Gradually, the content kitty is filling up. We are also looking at creating new DTH channels. Our plan is to expand to 200 channels.

    Will transponder space be a limitation?
    We will have to find space. We may have NSS when Doordarshan’s DD Direct vacates the satellite to move to Insat 4B. We are also talking to Isro (Indian Space Research Organisation) to launch a dedicated satellite for us.

    Are your Korean set-top vendors planning to set up a manufacturing facility in India?
    I don’t think it is viable at this stage. The volumes are too small for us to ask our STB vendors to manufacture in India. When we scale up to five million (boxes a year), then it may be a feasible project.

    Which do you think will attract investors first, the DTH or cable company?
    Both have attractive growth paths. We are looking at a mix of debt and funding coming from strategic or private equity investors.

    Are you looking at a small dilution initially of up to say 26 per cent?
    It all depends on what is the offer. Yes, if you initially dilute a small stake you have the advantage of discovering value as the company grows. But we have a flexible approach and it all depends on how lucrative the proposal is.

    Have you started talking to investors?
    We have been approached by many, but nothing is imminent yet.
    Will WWIL infuse massive capital towards digitisation of cable and triple play?
    We know the cable business has a lot of undiscovered value and will be giving it a big push. WWIL has a business plan which would take in an investment of Rs 5 billion over three years to drive digitisation, broadband and triple play rollout. It is a classic example of how the focus has been lacking and we have not taken advantage of the technology advances. We are looking at a million digital cable subscribers in the first year as we bundle service and hardware together in some form of subsidy. We also plan to make the network available to telecom operators for voice. Valuation of the cable business can only go up as the industry is badly suppressed. Conditional access system (CAS), digitisation and triple play will liberate the industry and growth in revenues can be rapid.

    How much debt you will raise to fund the expansion?
    We are looking at a debt-equity ratio of 1:1. The net worth of the company currently is not that strong to support that size of debt. We are, after all, planning to pump in Rs 5 billion to expand the business.

    What was the need for restructuring Zee News again?
    The restructuring started a couple of years ago when the uplinking guidelines were changed. Since we had a substantial foreign holding in ZTL, broadcasting of news and news-bearing channels were placed on a separate footing. Gradually as a response we shifted news gathering and uplinking to a separate company, Zee News Ltd, which was in compliance with the guidelines.

    But in the last few months, we have been mutilating this model as we found that there is a lot of strategic gap or clarity between the thinking of the producer (Zee News), the distributor (Zee Telefilms) and the team that exploits the commercial rights (Zee Telefilms) to such channels. So we thought we would close the gap and put everything in an entirely separate entity. All strategic decisions should be taken in an integrated manner by one team – be it production, news gathering, programme slotting, distribution or commercial exploitation.

    So what were the strategic gaps?
    The differences sprung because there was a revenue sharing arrangement between the two, but I can’t give you the minute details. It is not a good idea tactically to unite even if both of them are part of the same family.

    Zee news and regional channels had a combined turnover of Rs 2 billion in FY06. Were regional channels brought under Zee News Ltd (ZNL) because they could add to the company’s topline growth?
    The main reason for this kind of arrangement is that they are news-bearing channels; the regional channels have a strong component of current affairs and news programming. One of the consequences of this combination, of course, can be fattening of the topline. We are projecting a revenue of Rs 2.5 billion in FY07 and Rs 2.9 billion in FY08.

    As part of the restructuring, 137 ZNL shares will fetch 100 shares in ZTL. But with the total foreign shareholding in ZTL at 54.69 per cent, how does ZNL fall within the regulatory cap of 26 per cent?
    ZTL chairman Subhash Chandra will be transferring his foreign holdings (22.77 per cent is foreign promoters holding in ZTL) to an investment company in India. Also, foreign institutional investors (FIIs) will be given preference shares to bring the cap under limit (FIIs hold 31.51 per cent in ZTL).

    When are you planning the launch of Tamil and Malayalam language channels? How much are the new southern channel launches consuming as investments?
    The two channels should see launch in the current fiscal and in FY08. Along with the Kannada launch, the total investments would be in the region of Rs 350 million.

    With the demerger, won’t the topline of core Zee Telefilms see an erosion?
    Even after physically transferring the topline out, there is enough of a mandate to register growth. We have the number two and three (Zee Cinema and Zee TV) channels in the country. If they continue to focus on the products they have, their growth path is mandated. The flagship channel, Zee TV, is seeing a surge in ratings and ad rates.

    For core ZTL (after demerged businesses), we expect an advertising revenue growth of 12-15 per cent in FY07. While international business will sustain its 10-12 per cent growth (adding of channels and gain from Middle East), domestic subscription will stay steady. Overall, the core ZTL (after demerged businesses) will see a growth of 10 per cent in the current financial year.

    Will the bottomline look healthy after hiving off the loss-making businesses?
    The pullout is of minor loss-making businesses. The impact will largely even out as Zee News and the regional channels were profit-making. Still, there will be some positive outcome.

    How will Zee Sports play out on ZTL’s bottomline, particularly after bagging at a whopping price of $219.15 rights to 25 offshore cricket matches over five years?
    Zee Sports is at a development stage and there will be investments made for the long term development of the channel. There is a particular sequence in which we have to pay and the outgo for the first year will be $5.04 million per match. That will give us reasonable time to drag on the investments and build the channel. Besides, we will be bidding for other major sports properties including the ICC World Cup which is coming up for grabs.