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A Golden Goose of
Indian Television Continued
Continued from
The year saw the entry of Kerry Packer’s Channel Nine in a joint venture
with HFCL. The HFCL-Channel Nine JV sealed a deal with Prasar Bharati,
agreeing to pay a whopping Rs 1200-odd million for a three-hour prime time
band on the floundering DD Metro channel. This revenue model was
unsustainable, as would be proved later when Channel Nine withdrew from
renewing the contract on the same commercial terms. DD Sports was also
launched as a pay channel, trying to cash in on the India cricket rights
which Prasar Bharati bagged in a successful bid for five years.
It was also the year that saw the birth of a Hindi news channel, Aaj Tak,
from the India Today stable. This was to later fuel a news channel boom in
the country. B4U, promoted by LN Mittal, Kishore Lulla and Binani, was
also launched during the year.
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There was activity in the regional channel space.
Down south, Sun Network
continued to rule supreme. Zee made a foray into regional language
broadcasting with the launch of four channels under the Alpha brand - in
Marathi, Punjabi, Gujarati and Bengali. Rathikant Basu, ending his stint
as CEO in Star India, launched the Tara group of regional channels. ETV
Network also made a foray into regional language broadcasting.
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Cable TV was getting high valuation on the back of ambitious convergence
plans. Intel forked out $59.23 million to pick up 3.3 per cent stake in
Hinduja-owned IndusInd Media & Communications. Chandra’s Siticable was
valued by HSBC at $1.9 billion. MSOs announced upgradation plans, but the
investments were more promised than made. The cable TV industry grew to
over 30 million subscribers in the year, up from around 28 million a year
ago.
Telecom operators like Reliance, Bharti, BPL and Spectranet
also began to
dream of the convergence play. Hopes on broadband emerged with players
like NumTv.com, broadcastindia.com, sharkstream.com, homelandnetworks, and
spectranet.com surfacing.
On the policy front, Ku-band DTH broadcasting was permitted after a three
year ban. Guidelines were issued but a detailed note on how DTH will roll
out mysteriously did not see the light of day. Uplinking and ownership of
earth stations by private broadcasters from Indian soil were opened up.
No final word was heard on the broadcasting bill however. The idea of a
convergence bill was mooted, but it was caught up in a tussle between the
IT, telecom and I&B ministries as to who would play the steering role for
convergence.
The door was open for private players to own and operate communication
satellite systems. The local INSAT system was offered for commercial use
by private agencies.
Sun TV and Eenadu TV were the first players to get permission to enter the
fray. They set up their own earth stations and were granted uplinking
facilities.
Meanwhile, Chandra’s ambitious Agrani satellite project ran into export licence issues under US munitions restrictions imposed after India’s
nuclear explosions.
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2001
– LOOPHOLES IN TELEVISION CREATED CONTROVERSIES
The year 2001 was marred by a series of controversies, starting
with diamond merchant and noted film financier Bharat Shah’s
arrest and Ketan Parekh’s expose which led to the collapse
of the stock market and the media stocks. B4U’s initial public
offering (IPO) plans went for a toss as Shah was to play a
prime role in the company.
Then came the accusation
against the prevailing ratings system - the currency advertising
industry used to measure the popularity of television programmes
- being rigged, an effort by some organisations that ultimately
fizzled out as they could not back it with adequate proof.
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And just as this
mudslinging effort continued, the news came that a unified rating
system would emerge after Dutch Communications giant VNU NV had
acquired AC Nielsen. This meant VNU would own TAM and INTAM,
the two companies that were monitoring TV viewer ship in India.
It was also a dark
year with three events spelling disaster: the earthquake in Gujarat,
the 9/11 terrorist attacks, and the US-led offensive on Afghanistan.
But this was fodder for the news channels and Aaj Tak gained audiences
to become the leading news channel in the country. Kerry Packer’s
dream to expand his base in India ended rather unfortunately as
Doordarshan did not bend to sweeten the commercial terms with
HFCL-Channel Nine. By no stretch of imagination would DD Metro
find somebody to bet Rs 1.2 billion a year for a three-hour prime
time possession on the channel. Packer had done it as an entry strategy,
but hoping that he would repeat it for another year was a little
too much to expect. And with the exit of Packer also ended Balaji
Telefilms’ hopes of roping in Channel Nine as a minor equity
partner in the company.
Zee continued to
fall and its much-hyped relaunch with 24 shows initiated by newly
inducted chief executive Sandeep Goyal flopped miserably. Star retained
its premium leadership position, climbing up the charts. Sony failed
to stem Star’s onslaught and its Jeeto
Chappar Phaad Ke, a game show hosted by actor Govinda,
managed to create initial hype but fizzled out fast. Chandra’s
attempt at getting Turner International to invest as an equity partner
in Zee may have failed, but he managed to get a joint venture agreement
for distribution. While Zee Telefilms would hold 76 per cent stake
in the distribution company, the balance 26 per cent would be with
Turner. Such distribution alliances to strengthen bouquet offerings
to cable operators would prove to be the trend in future. The government
continued to be hazy on outlining a broadcast policy that would
free foreign media companies from the clutches of regulation and
be attractive for investments. But the government finally tabled
the Convergence Bill which envisaged a super convergence commission
with control of broadcasting as its major plank.
2002 – LAW AND ORDER ON CAS
Making conditional access system (CAS) mandatory for viewing of
pay channels was the most important piece of legislation to be passed
by Indian Parliament in 2002, though it came after several hurdles.
On 7 May 2002, the Cabinet passed a bill in the Lok Sabha (lower
house) seeking to amend The Cable Television Networks (Regulation)
Act 1995. Cable TV operators would have to transmit or retransmit
programmes of any pay channel through an addressable system. For
the free-to-air channels that were to form part of the basic tier,
the government would decide the minimum number of channels and the
maximum rate that cable operators were to charge viewers.
And on 15 May, the Cable TV Networks (Regulation) Amendment Bill, 2002
was
passed through voice vote by the Lok Sabha after a marathon debate that
lasted three hours.
However, hectic lobbying by a section of politicians and broadcasters
delayed the passage of the Bill in the Rajya Sabha (upper house). Finally
on 10 December, it won overwhelming support in the Rajya Sabha.
The credit to bring legislation in for CAS must go to then information and
broadcasting minister Sushma Swaraj. Multi system operators welcomed CAS
which they believed would change their fortunes as they were squeezed in
between broadcasters asking for more payout and last mile operators who
were under-reporting their actual subscribers. Independent cable operators
also saw this as an opportunity. The complexity of implementing CAS would only surface in 2003 as it would
require massive investments and seeding of CAS boxes. In 2002, it was seen
by the MSOs and independent cable operators as a victory for them.
Sony
Entertainment Television India also had reason to celebrate
as it bagged the exclusive cable and satellite TV rights for live
telecast of ICC cricket tournaments to be held from 2002 to 2007
covering the Indian subcontinent. The cost: a whopping $ 208 million
in the biggest ever licensing deal in Indian broadcast history.
Sports broadcasting saw a new entrant with the launch of Ten Sports
in April. The channel was immediately in the limelight as it had
bagged the exclusive terrestrial and C&S telecast rights to
the FIFA soccer World Cup for a piffling $3 million. Sports properties
would thus get fragmented, a situation that ESPN Star Sports had
wanted to avoid when they set up the joint venture.
2003 – CONTROVERSIES BY STAR NEWS AND NDTV
The big news of the year was the split between Star and NDTV.
While Murdoch wanted complete control, Prannoy Roy
did not want to let go of editorial independence. Star would take
full control of Star News from 31 March 2003 after the five-year
exclusive supply contract ended while NDTV announced it would launch
two channels of its own around the same time. The
government also set in motion a process whereby FDI in TV channels
operating in the news category was to be reviewed and likely
to be linked to the parameters prevailing in the print medium. In
the print arena (except trade publications), the government allows
26 per cent FDI investment. Zee Telefilms was on an acquisition
spree, buying stake into ETC Networks and Padmalaya Telefilms.
The size of the all-cash deal for ETC Networks which owned ETC
Punjabi and ETC Music was approximately Rs 250 million (Rs 180
million for purchase of shares from promoters and Rs 70 million
for preferential allotment).
Zee’s stake in Padmalaya Telefilms (a listed company) was through an
acquisition of a 64.3 per cent stake in the holding company, Padmalaya
Enterprises Pvt Ltd (PEPL). This gave Zee a 32.8 per cent stake in
Padmalaya Telefilms, a Hyderabad-based content company. Zee was to pay Rs
590 million for the deal including an open offer of 20 per cent as
required by regulations.
The year also saw the exit of Zee Telefilms CEO Sandeep Goyal. Chandra
decided to run the company at the operational level as well and brought
back his brothers Jawahar Goel and Laxmi Goel to manage Siticable and news
businesses of Zee. For the major players like Sun and ETV in the southern region, it was a
period of consolidation. Vijay TV led the move towards pay in Tamil Nadu.
Sun announced plans to take Telugu channel Gemini TV pay.
Doordarshan’s revenues were being taken away by the private satellite
players. During 1999-2000, DD’s revenues stood at Rs 5,971.9 million and
AIR’s at Rs 808.4 million. DD’s earnings increased in 2000-2001 to Rs
6,375.1 million while AIR’s dipped to Rs 739 million. For 2001-2002, DD
earned Rs 6,152 million (indicating a dip in earnings), while AIR’s
revenues increased to Rs 966.8 million. By the time this financial year
closes, Prasar Bharati expects that DD would have mopped up about Rs 6,250
million, while AIR is expected to do another Rs 1,000 million.
Contributed By :
Saumendra Das, Asst. Professor,
Aditya Institute Of Technology And Management; Tekkali (A.P.)
somu.das2110@gmail.com
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