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It
has been a marriage a long time in the making. Sony Entertainment
Television (SET) India and Discovery Networks International
(DNI) announced yesterday a distribution alliance that brings
the two DNI channels, Discovery and Animal Planet, onto
the Sony platform.
While
talk of such a deal has been doing the rounds for well over
a year now, company officials admitted that some urgency
came into the whole equation only in the last three months.
It may be recalled that it was just under three months ago
(13 December to be exact) that Subhash Chandra's Zee Telefilms
and AOL Time Warner's Indian unit announced a channel distribution
joint venture that brought the three Turner International
channels Cartoon Network, CNN and HBO onto Zee's 14-channel
bouquet.
THE
DEAL IS DONE: Kunal Dasgupta,CEO Sony Entertainment
Television (left) with Deepak Shourie, MD Discovery
Networks India |
The
two companies will be setting up a joint venture to handle
distribution. Queried as to what sort of equity break-up
the new company would have, neither Sony Entertainment Television
CEO Kunal Dasgupta nor Discovery Networks India MD Deepak
Shourie would offer any clues. Their explanation: It will
be worked out after regulatory approvals (from the Foreign
Investment Promotion Board?) had been secured. However,
if the JV is anything like the Zee-Turner one (where Zee
has a 74 per cent stake), SET is likely to hold a larger
chunk of equity.
The
deal is to take effect from 1 April and the new venture
will be headed by Shantonu Aditya, senior V-P, franchise
channels and distribution, SET India, who will be the company
president. From the Discovery side there is Anuj Gandhi,
director, affiliate sales, India & South Asia, as the JV's
vice-president.
The
alliance is being formed at a time when commercial broadcasters
in India are increasingly looking at subscription revenues
to shore up bottomlines in a climate where the fight for
a share of the stagnant ad pie is becoming more and more
difficult.
With
the addition of Discovery and Animal Planet, the SET bouquet
offers a six-channel compact quality package that includes
SET, SET MAX, action channel AXN, and business news channel
CNBC. One thing that Dasgupta made clear without providing
any numbers was that the bouquet would cost more. Queried
as to how they expected cable operators to accept increases
when resistance was becoming increasingly strident, Shourie
said the quality of the package added to an improvement
in the services that two companies working together would
bring in would make the difference.
MAJOR
INCREASE IN CONNECTIVITY IS THE GOAL: The addition of
the Discovery package is even more significant now that
Sony has acquired the Indian broadcast rights to ICC designated
tournaments for the next six years. The newly acquired cricket
properties will without doubt be the cornerstone of Sony's
drive to increase connectivity across the country as well
as push through whatever new subscription rates that will
decided. The two channels just add some more muscle to that
effort and it is an alliance that is bound to prove mutually
beneficial.
"This
joint venture enables both partners to offer consumers a
comprehensive and diverse bouquet of programming choices,
enhancing both partners' distribution strength," Michael
Grindon, president of Columbia TriStar International Television,
SET India's parent company, said in an official release.
According
to the same release, Dawn McCall, the president of Discovery
Networks International, said: "Sony and Discovery bring
unique, complementary strengths and knowledge to this new
joint venture that will offer consumers endless entertainment
choices."
Both
the Discovery Channel and Sony Entertainment Television
began broadcasting in India in 1995. According to the channels'
estimates, the former now reaches over 21 million subscriber
households, the latter more than 29 million.
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