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MUMBAI:
Low valuations make Indian media and entertainment
companies attractive to foreign investors,
said NBC Universal International president
Peter Smith.
Speaking at a session on "Return on
Investments in the Indian M&E industry,"
Smith said India with a 50 per cent C&S
penetration still had a large part of its
market untapped. "Unlike China, India
has a friendly foreign direct investment
policy. Besides, a high quality management
team is available. These factors make it
suitable for a strategic investor,"
he added.
In
January 2008, NBCU pumped in $150 million
for an effective indirect holding of 26
per cent stake in NDTV Networks Plc.
"We
will stay as a long term strategic investor
in India," Smith said, justifying the
deal despite NDTV Imagine seeing weak ratings
while newbie Colors, a Viacom joint venture
channel with TV18, has raced to second spot
in the Hindi general entertainment channel
space.
Agreeing with Smith, TV Today Network CEO
G Krishnan said a strategic investor was
more valuable than a financial investor,
particularly in this era of "spreadsheet
capitalism."
Broadcasters have to settle for low subscription
rates while paying higher carriage fee to
cable TV operators. "We get a meagre
3-4 per cent of the $3 billion subscription
revenues as cable is controlled by political
mafia and there are leakages in the system."
Colors CEO Rajesh Kamath, however, did not
agree. "If distribution is helping
generate more ad revenues, it is fine to
pay carriage fee to cable TV operators,"
he said.
A strategic investor should wait for 3-5
years to break even, Kamath added.
Turner International India DGM &VP entertainment,
South Asia Monica Tata was bullish on the
Indian market. "For Turner and Warner
Bros, India is a must go market. Whatever
the mood of the country, people want entertainment.
And this is why we are launching two new
channels in this market. The plan is to
build the brand."
India, however, offers a low ARPU (average
revenue per user) market. "Bgger is
not necessarily better. Low ARPU is denting
the Indian M&E industry. From an investor's
point of view, the challenge is of getting
higher yield," Heath Ventures chairman
and managing principal Bhaskar Majumdar.
The
session was moderated by NDTV Profit managing
editor Shivnath Thukral.
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