Budget belies expectations

Budget belies expectations

Budget 2000 was as insipid as they come for the television industry. Finance minister Yashwant Sinha did not fulfill the expectations of industry professionals by putting entertainment (read broadcasting) on a par with the infotech business. He cold-shouldered their proposal to allow them to divest just 10% equity like infotech stocks apart from giving them the benefits provided to the infotech sector. The industry will now have to look for succor from the Broadcasting Bill draft which information and broadcasting minister Arun Jaitley is supposed to present to Parliament in March. What Sinha however handed out were sops of a different kind: lowering of customs duties on cinematographic equipment from 40 per cent to 25 per cent and on basic film and jumbo rolls from 50 per cent to 5 per cent. This is expected to buoy both the film and studio businesses.

The increase in the foreign institutional investor limit from 30 per cent to 40 per cent is expected to benefit mostly the infotech and media and entertainment industries as these have emerged as darling stocks of the FIIs in the past six-seven months.

Sinha attempted to give a boost to the infotech business by reducing customs duties on finished computers and even components. He reduced customs duty on microprocessors, memory devices CD Roms, ICs and Display tubes from 15 per cent to 10 per cent. He additonally cut customs duty for computers from 20 to 15 per cent, motherboards 20 to 15 per cent, floppies 20 to 15 per cent.

A negative impost announced that was expected to hurt software companies may not end up hurting them so much after all. The tax burden on them will end up at around 3% thanks to the announcement that 20 per cent export income of all companies would be taxed.

Some attractive dollops were dished out to the Venture capital firms too to encourage them to crop up. Among the measures announced were:

* SEBI to be the nodal agency for venture capital funds to encourage entrepreneurs.

*One time tax of 20% on venture fund investor and undistributed income.

* No approval of venture capital fund by tax authorities.

* Venture Capital Fund income tax free if distributed within the period set by SEBI.

This is expected to give a boost to the Dot com sector as VCs may be encourage to set up operations in India as against the overseas subsidiaries they have set up so far. There were some initiatives on the telecom front: Customs duty on fibre optic cable has been slashed from15 per cent to 5 per cent. This will benefit cable TV companies too and it may encourage them to go in for fibre optics for their trunk lines. Customs duties on cellular phones has been reduced from 25 per cent to 5 per cent. This is expected to encourage the spread of handphones to even lower income classes.

An impost that will likely hurt is the increase in excise on fast moving consumer goods from 8 per cent to 16 per cent. This will lead to a hike in prices of products by the FMCG majors which in turn could affect their performance in an already competitive market. The stock market expects growth to slow down further and their revenues to reduce. This in turn could affect their ad expenditures as advertising is what companies first cut down. This could lead to more cautious spending on television advertising which in turn could affect the performance of certain television companies.

An announcement which could work in the favour of some infotech and media firms is the increase in the ceiling on automatic approval for overseas investment by Indian companies from $15 million to $50 million. One may see them go on an acquisition spree. .

Star TV Executive Chairman Gareth Chang resigns

Star TV executive chairman Gareth Chang has resigned. The senior Hughes executive who joined Star TV in September 1998 to help drive Star TV into China is leaving the firm for better prospects and to explore other opportunities.


A press release issued this morning said that Chang was resigning from his senior positions in News Corp too. In the interim, News Corp No 2 Chase Carey and James Murdoch will function as co-chairmen while deputy chief executive Bruce Churchill will take over day to day operations of Star TV in Asia.

The resignation of Gareth Chang comes at a time when News Corp boss Rupert Murdoch is consolidating all his DTH ventures and attempting to float them on the stockmarkets. IPOs for Star TV Asia and India are also on the anvil. officially launched

Finally India's only television portal is here., a vortal based on India's burgeoning cable, satellite and terrestrial television and industry was launched on February 25 by the industry stalwart- Zee Telefilms' Chairman Subhash Chandra.

According to Anil Wanvari, a media analyst and also the founder & CEO of the company, the vortal aims at being 'the one stop source for everything related to the Indian television'. Indian Television Dot Com Pvt Ltd, which started off in form of India's first and succesful paid e-mail newsletter-The Indian Cab&Sat Reporter, has come a long way since then.

True to its name, offers a variety of services to the industry. As of now the site is focusing on a huge information base wherein it lists a wide array of industry resources like media houses, advertising agencies, producers, directors, photographers, makeup men, actors etc.

Apart from this also has plans to introduce the B-to-C model on the site, which will provide entertainment to the viewers in form of new, gossips, games revolving around the popular television, programmes. The B-to-C area will not only entertain the viewers but also form a part of valuable feedback to the industry in the form of suggestions and recommendations from the viewers.

"We want to generate revenues not just gather plain valuation" were the words of the CEO at the launch. He asked for blessings from the industry which would assure success for the portal which boasts to be objective.

Zee TV board approves ADS issue

Zee Telefilms is becoming aggressive about the Internet. The company's board today approved an aggressive fundraising drive from the US market which would help it achieve these ambitions.

A company press release said that the board has given it the go-ahead "to raise funds up to $1.5 billion or by issue of up to 40 million equity shares including premium, whichever is higher, by issue of American depositary shares"

The purpose: Zee Telefilms wants to develop its leadership position in the media business and new business lines - specifically Internet and new media - the press release said.

It will be approaching its shareholders for approval on 10 April. It's quite likely that the extra ordinary general meeting it is planning will be a mere formality like in the past. Shareholders have on the whole lauded Zee Telefilms chairman Subhash Chandra's vision and have given him a blanket chit on most of his fund-raising proposals at general body meetings.

In fact, the company is in the process of finalising its lead managers and registrars to help raise funds.

Discovery Channel gets on to ground level promotions; to focus on Animal Planet

Discovery Channel seems to be working hard in increasing the penetration of the infotainment channel and increasing its popularity. It is working on the ground level to directly reach the audience.

As per the channel's plans to introduce a new series every three months, the channel has kicked off roadshows to promote its latest programme 'Raising the Mammoth' which will be launched on 12 March, 2000. It would be a part of 'Watch the World Over' series. Discovery Communications India has already got in Bernard Bulgues, the French explorer who was behind the path breaking expedition which excavated the still-intact remains of the 20,380 year old beast 'Woolly Mammoth'.

The French explorer is expected to interact with over 800 school children in Mumbai and will chat on

The channel already boasts that it has a penetration of over 15 million homes. The penetration of the channel rose tremendously following the introduction of the Hindi language feed.

Discovery Channel will promote its sister channel Animal Planet which will be its priority in the year 2000. It would work on increasing the distribution network of Animal Planet and would double the number of decoders to over 1,000 units. However, both the channels even though on similar lines, would have an identity of its own.

EM.TV goes Muppety, acquires Jim Henson Company

The Jim Henson Company, one of the world's leading producers and marketers of pre-school, kids and family entertainment, signed a definitive agreement with EM.TV & Merchandising AG, of Munich, Germany, one of the fastest-growing and most successful media, animated cartoon and retail companies in Europe under which EM.TV will acquire 100% of Henson in a cash-and-stock transaction notionally valued at $680 million.

Established in 1958 and headquartered in Los Angeles, The Jim Henson Company's library comprises more than 450 hours of family programming and includes famous series, TV movies and specials such as The Muppet Show, Jim Henson's Muppet Babies, Fraggle Rock, numerous Muppet movies and the recent international successes Bear in the Big Blue House and Farscape. It also is allied with the movie channel Hallmark Entertainment and kiddie channel Kermit Channel.

The leadership of The Jim Henson Company will be substantially unchanged. Brian Henson will continue to be responsible for initiating and driving the creative and technological forces of the Company as Chairman. Charlie Henson will be promoted to President and Chief Executive Officer. Lisa Henson will be officially joining the Company as President of Jim Henson Pictures, and also serve as Vice-Chairman. They will work closely with EM.TV's Chairman and CEO Thomas Haffa and his brother Florian, who is the Vice-Chairman and Chief Financial Officer.

EM.TV & Merchandising AG is one of the fastest-growing and most successful media, animated cartoon and retail companies in Europe. Established in 1989 by Thomas Haffa, Chairman and CEO, EM.TV & Merchandising AG has developed into a leading international media company. The company is active in the production of children's and family programs, worldwide distribution of TV rights, and marketing of merchandising rights and major international events. EM.TV is the world market leader in family and children's programming and the European market leader in merchandising. With 30,000 half hours of programming under its control, EM.TV has one of the largest children's and family entertainment businesses in the world.

Thomas Haffa, Chairman and Chief Executive Officer of EM.TV & Merchandising AG said, "This acquisition gives us access to one of the world's most outstanding product libraries, and represents a major milestone in the development of our company. By acquiring The Jim Henson Company, we gain some of the most powerful and enduring kids' and family brands worldwide and get access to the world's biggest and most important media market."

Allen & Company Incorporated advised The Jim Henson Company with regard to the transaction.

Sri Adhikari Brothers to launch Sabe TV by mid-April

The much awaited free-to-air Hindi entertainment television channel Sri Adhikari Brothers Entertainment TV (Sabe TV) is all set to launch in mid-April. Sabe TV would focus on general entertainment and would be broadcasted for 18 hours per day initially. Already having a library consisting of over 2,000 hours of programming valued at Rs 520 million, the company is working on creating 25 new programmes for Sabe TV.

Already financed to the tune of $25 million through private placement of equity to Foreign Investors (FIs), Sabe TV hopes to break even within three years of its operations. The channel is expected to take a pay route at a later stage.

Sri Adhikari Brothers has also invested $4 million in creating a distribution network in Europe for Sabe TV.

The channel seems to be prepared to take on the giants like Zee TV and Sony TV. With a huge library of software, Sabe TV can hope to fit in the same bracket.

TV 18 opens at a whopping 1000 per cent premium; to launch portal on Budget Day

TV 18 listed at a massive 1,000 per cent premium on the Bombay Stock Exchange (BSE) today. It opened at RS 1,950 and touched an intra-day high of RS 1,990 on the first day of its trading. The RS 10 scrip was issued at RS 180 and had received a overwhelming response when it was oversubscribed by 55 times. A whopping 150,000 shares were traded in the first ten minutes trading and the volumes rose to 3,50,000 in just two hours. The share was hovering around RS 1,600 after a couple of hours of trading. The market had already speculated the opening price to be RS 2,000 on the day prior to its listing.

The company has announced its plans to launch a business portal on 29 February which would coincide with Budget Day. "The portal will be different from any that is around today. It will take synergies from the television channel CNBC to offer the consumer a unique experience," says TV 18 managing director Raghav Bahl.

The project is estimated to cost RS 200 million. Already having invested RS 30 million, the company would at some stage go in for Venture Capital. "We are incubating the portal under TV 18 currently. Later on we will spin it off as a 100% subsidiary. We cannot afford the portal dragging down the earnings of TV 18," says Bahl. The company hopes the portal to break even within three years of business. Officials, however, refused to disclose details about the project.

Earlier, TV 18 made history on 15 February when the Bombay Stock Exchange invited brokers for a pre-listing meet which was the first of its kind, at the trading ring of BSE. Raghav Bahl, Managing Director, Television Eighteen (TV 18) addressed the stock brokers and the media about the company profile and its operations and appeared to be confident about his stock.

The stock is expected to show wonders for the investing community with very few media scrips to invest in. The questions which still remain to be answered are whether the company with revenues just around

RS 300 million will continue to attract investor sentiment when biggies like UTV and Nimbus make their listings on the stock exchange. It does not have much library product like UTV and Nimbus as it mainly makes commissioned shows. Its only USP is its partnership business channel CNBC India. Bahl will have to take steps to remedy that at some stage.

Nimbus gears up for convergence

Mumbai based television software production and airtime sales company Nimbus Communications is making a big time foray into the Internet biz with the intention of transforming itself into a powerful e-media company. The Harish Thawani promoted venture would be the first company to offer free Internet access in India. It has struck a marketing arrangement with Videsh Sanchar Nigam Ltd. The group has already paid VSNL RS 200 million for a fixed number of subscribers. A subsidiary christened Nimbus Online would look after Internet access.

It also is working on creating an array of vertical portals under the banner name and it is intending to pump in RS 201.5 million in content for the portals. It is expected to launch on 15 February, 2000. The mother portal ( would focus on C-2-C and B-2-C areas and is expected to be the "one stop shop for the funky and cool minded people". The portal boasts to have everything from cricket to dating. 1,200 hours of cricket programming is already in the process of being converted into streaming media. The company is known to have a joint venture formed with the Industrial Development Corporation of India (IDBI). The company is forecasting an ambitious three million page view target three months from its launch.

Nimbus Communications' two television channels are expected to be launched this year. One would be a women-centric channel and the other one an entertainment channel called Showbiz TV. The latter is expected to be launched by July 2000.

Nimbus has not ignored the lucrative radio business. It also will launch eight FM radio channels and make its content synchronise with the group's Internet business.

The media giant is already ready to come out with the RS 1.92 billion IPO to fund its plans.

It appears as though Mr Thawani is not leaving any stone unturned in the era of convergence and hoping to be well ahead in the race. He already has Mr Chandra leading the race with Internet access, a bouquet of television channels, distribution, satellites and satellite telephony. Will Thawani replicate the success achieved by India's Murdoch Mr Subhash Chandra?

Tamil film trade shuts down southern TV

Another war erupts...this time it's the film industry vs the TV. And it's taking place down south.

Tamil film makers have started a round of fisticuffs against regional television channels - Sun TV, Raj TV, Vijay TV and Jaya TV. They have banned south Indian film personalities including stars and even film technicians from giving interviews to TV channels. Three organisations - the producers council, and the distributors and exhibitors associations - say that film artistes should abstain from acting in Tamil television serials appearing on television. They have disallowed TV channels from showing (promotional clips) trailors, clippings and even songs from newly released movies. They add that telecast rights of new movies should not be awarded to these channels for up to five years from their release. The troika wants all these conditions to come into force from early February.

The reason for such a harsh move: the glut of film promotions and star interviews on television has meant that audiences are abandoning cinema halls and are turning into couch potatoes. Because of this the Tamil film industry's box office collections are dropping.

They point out that this trend has become apparent from mid-January when the religious festival of Pongal commenced. Not one of the four blockbusters released on that day has run to a full house, they point out. They say viewers got their fill of their stars sitting comfortably in their homes on television. They want to avert a similar disaster on April 14, which is another auspicious day when a deluge of Tamil films hits cinema halls.

It is known that the TV and film industry go hand in hand. Films are promoted on TV and the TV industry gets its share of the pie on account of the viewership trailors generate. Will the ban continue for long? Will it be supported by the whole Tamil film industry, which already has its foot into the business of producing Tamil software? Will film actors who are already starring in soaps discontinue their acts?

Even Bollywood had gone through a similar convulsion a couple of years ago when the Hindi film industry had stated that film collections were dropping on account of piracy by cable operators. But they had not blamed falling collections to a glut of trailers and interviews on television. In fact, some directors and producers have cleverly used television to drive audiences to theatres. So is the Tamil TV trade missing the wood for the trees?

It is a situation that clearly bears watching.

Alpha Marathi honours artists to get an edge

Zee Telefilms is organising an awards show dedicated to the Marathi film and theatre industry on 5 February in Mumbai's Andheri Sports Complex on 5 February. The show will honour the leading lights of the film and theatre industry like Ashok Saraf, Ramesh Deo, Laxmikant Berde, Mohan Agashe, Prashant Damle, Alka Kubal, Nivedita Joshi, among several others.

The show is being held under the aegis of Alpha TV Marathi and should help the channel bond very strongly with the Marathi film, TV and theatre trade which has suddenly become in great demand following the launch of two satellite channels - Alpha Marathi and Prabhat. DD Marathi was of course the first in the game but it did little on the entertainment side with its programmes being staid and dull. Another two channels are planned one from the Eenadu group and another from R. Basu's Broadcast Worldwide.

Gaurav, the Zee Awards show, is presented by Godrej in association with the makers of Mahabhrungaraj Oil, Cadbury Dairy Milk chocolate and Nyle Shampoos.

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