Technology

TV18's IndiaCast, Disney UTV form distribution JV company

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MUMBAI: India is witnessing a consolidation in the distribution business for television channels. In the latest round, TV18 Group and The Walt Disney Company are floating a joint venture company to distribute their television channels across analogue and digital platforms, including cable TV and direct-to-home (DTH), in India.

IndiaCast, TV18 and Viacom18‘s multi-platform, global distribution company, will have 74 per cent stake in the JV while UGBL, a Disney UTV firm, will hold the remaining 26 per cent.

The new entity will distribute 35 channels from the TV18, Viacom18, Disney UTV and A+E Networks, making it the second largest distribution company in terms of bouquet of channels after Media Pro Enterprise India.

Anuj Gandhi (IndiaCast CEO) will be the chief executive officer of the joint venture company.

The yet-to-be-named company will be responsible only for distributing the channels in India while international operations will be handled independently by the two companies.

IndiaCast will move its domestic distribution business into this new venture, while continuing to manage its other content monetisation businesses which include international distribution, ad sales & content sales as well as the new media distribution for TV18, Viacom18, A+E Networks | TV18 and Eenadu channels.

Disney UTV will also move its domestic distribution activities for its bouquet of all nine channels (Disney, Hungama, Disney XD, UTV Stars, Bindass, UTV Movies, UTV Action and the newly launched preschool channel Disney Junior) to the new entity.

The joint venture will become operational post the necessary regulatory approvals and will provide the channels to cable, DTH and Headend-In-The-Sky (HITS) platforms in India.

Says Gandhi, “This partnership will build a strong distribution company that will offer a broader and more diversified range to platforms giving us a foothold across genres - including in general entertainment, general and business news, movies, youth and kids genres. We have had a great first year for IndiaCast and this JV will give our domestic distribution business scale and wider reach.”

Strength of the JV

The combined entity will particularly be strong in the youth (MTV, UTV Stars and Bindass) and kids genres (with the Disney and Nick channels). IndiaCast will also get a presence in the movie genre with UTV Movies and UTV Action.

Says MK Anand, managing director – Media Networks, Disney UTV, "There are some clear and unique synergies in this partnership. The new bouquet is a more comprehensive offering from the viewer’s perspective that gives the combined entity an edge in the marketplace."

In the news businesss, the JV will have the TV18 group of channels including CNBC TV18, CNN IBN, IBN7 and CNBC Awaaz. The Hindi general entertainment channel Colors will continue to remain as a big driver while the niche channels will give the bouquet a wider presence. It will also have regional-language channels with ETV a part of the pack.

"IndiaCast fills up the gap of a Hindi movie channel in its bouquet while Disney gets the support of a stronger platform. The Disney UTV movie channels, however, have to gather more steam to match the other two main distribution companies (Media Pro and TheOne Alliance) in this space. The strength of the new JV will be more obvious in the youth and kids space," says a media analyst.

Sports will be a gap in the bouquet. Only MSM Discovery (which operates through TheOne Alliance brand) has sports in its bouquet with Sony Six and the Neo channels. Media Pro, the JV between Star Den and Zee Turner, does not get to distribute Star‘s (Star Cricket, Star Sports, etc) and Zee‘s sports channels (Ten Sports, etc).

The fate of the Sun TV group of channels, which are distributed by IndiaCast in the Hindi Speaking Markets (HSM), is uncertain at this stage. If Sun TV agrees, then it will be the first set of external channels distributed by the JV.

TV18 to hold majority in the JV

TV18 will continue to hold majority economic interest in both IndiaCast and the new step-down joint venture through a combination of its direct holding through TV18 and the indirect holding through Viacom18. TV18’s effective economic interest in IndiaCast is 75 per cent and 56 per cent in the new venture.

Says Network18 managing director Raghav Bahl, “The Indian television industry in on the throes of a transformation on the back of digitisation. The distribution joint venture of TV18 and Viacom18 with DisneyUTV is a landmark deal and will help in shaping the future course of the domestic distribution landscape. At TV18, we have always believed that as industry leaders we should not only forge and nurture successful partnerships but also spearhead initiatives that accrue benefits to all stakeholders.”

Consolidation in the distribution business

The trend started years ago when Zee Turner and Set Discovery (now MSM Discovery) formed joint venture companies to add strength to their distribution businesses and ramp up subscription revenues. The biggest move in this direction came in mid-2011 when Zee Turner and Star Den merged their distribution businesses to create an elephant that marginalised the smaller players.

"With this new JV, there will almost be no space for individual players. Media Pro is at the top followed by TheOne Alliance and then the IndiaCast-Disney UTV JV so far as revenue figures go. We will see further consolidation in the industry," says a media analyst.

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