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FOCUS
THE TUSSLE TO LAUNCH HBO
IN INDIA
A major tug-of-war is on to launch movie service
HBO - part of the Time Warner group - in India. The latest
to throw its hat into the ring is Turner Broadcasting System
(TBS) - also part of Time Warner. TBS has proposed to the
Time Warner management that its Indian operation be given
the task of launching the movie channel in India. TBS has
said that it will bring in the international channel called
HBO International.
Why is TBS bidding to bring in HBO International
when an operation in Asia called HBO Asia is already existing?
Shouldn't HBO Asia - an Asian region localised service be
bought into the country? To understand that a little background
is needed. HBO is owned by Time Warner but it has set up joint
ventures with various studios in all the markets that it operates:
HBO Poland has different partners, as does HBO Middle East
as does HBO Espanol. In some of the markets, the four partners
are competing with rival services like in the Middle East.
In Asia, HBO Asia has four equal partners in
Sony Pictures Entertainment (SPE), Universal, Paramount, and
Warner. SPE had earlier been bidding to launch HBO Asia in
India through its Indian outfit Sony Entertainment Television
(SET). But the four partners could not reach a settlement
and SPE's proposal was shot down. SET has been distributing
AXN, the action channel in India for the past year. Sony management
claims they have managed to get a penetration of more than
9.6 million homes for the encrypted service with about 2.5
million of them paying.
TBS on the follow-through made a proposal to
launch and distribute HBO Asia in India. It said that it already
operates two channels in India - CNN and TNT & Cartoon Network.
While CNN is a free to air service, TNT & Cartoon Network
is encrypted and is subscription-oriented. The latter has
a penetration of around 8 million Indian cable TV households
with an estimated million paying homes.
This time it was SPE which vetoed the deal
because SET was not allowed to distribute the channel in India.
TBS found a way around and proposed to the Time Warner management
that it be permitted to launch HBO International, without
SPE's participation, and with the participation of Paramount
and Universal. But apparently, the cost of creating a new
movie channel service for India, at the time of writing, was
much too high. Hence, Paramount and Universal apparently said
no to an equity stake.
TBS said that it would strike a licensing deal
with the two studios for the Indian market. Which was fine.
But queering the pitch is Subhash Chandra's Zee Network. It
has approached the two studios and has told them that it is
willing to top any offer that TBS is willing to pay as licensing
fees for use of their movie libraries on Indian television.
The reason: it is putting together an English channel which
will be part of its digital bouquet. The studios had not taken
a decision at the time of writing.
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