Media and Entertainment Sector in India Monthly Update November 2012
Top Story Phase II of digitization on a roll Officially, the government’s digitization plan spanning across four cities namely Mumbai, New Delhi, Kolkata and Chennai saw the end of an analog era on Oct 31st, 2012. The government has now set the ball rolling for Phase II of digitization. Phase II will have a deadline of 31st March, 2013 and will cover digitization of 38 cities. This will entail a conversion of 22 mn analog subscribers which is slated to present a mammoth opportunity compared to Phase I. It is expected that digital cable will fare better than DTH as last mile connectivity is not a big issue. The set‐top‐box will be the only route to view television channels and players like Hathway, DEN or even Siti Cable are already vying to capitalize on this opportunity. Digitization is slated to correct the current pricing anomaly which is largely supported by significant leakage at the LCO level. This prevents fair share of value getting captured by broadcasters/MSOs (pay channel revenue) along with the government (taxes).
News Update General
Kochi FM set to broadcast 19 hrs nonstop programme All India Radio is all set to add new colours to its Rainbow FMs. Rainbow FM 170.5, the musical and entertainment channel of All India radio Kochi is slated to undergo several changes. Rainbow FM Kochi will start broadcast Malayalam programmes from morning 5 am and continue till midnight. The channel is also set to bring new programme content and presentation styles. A differentiator in this aspect is the factor of providing news updates every hour by the channel. Chat shows and special presentations by film personalities like Mohanlal, P Jayachandran, Ranjith, Lal, Jagadeesh, Kalpana and other popular figures will be broadcast from Nov 12. ITIR to create 1.5 mn job opportunities The IT Investment Region (ITIR) proposed to be developed in Hyderabad in two phases over a period of 25 years will be creating an employment potential of 1.5 mn. The ITIR is planned with a capital outlay of INR 23 bn and will have an external infrastructure with over 50,000 acre of IT and ITes area. In an economy where Media and Entertainment – Monthly Update
corporate entities are looking at cutting their costs, Hyderabad is offering arbitrage benefits and is posing as an advantageous factor for them. Andhra Pradesh is home to 1206 IT companies and employs about 300,000 IT professionals directly and accounts for about 11% f the total employment in the Software Technology Parks of India (STPI) and the special economic zones (SEZs) in the country. Hyderabad to boast of world class media city A world class Media City is slated to come up in Hyderabad in order to promote animation and gaming. The state government has allocated an area of 30 acres for the project which is expected to be providing an entertainment technology‐based ecosystem. This was announced at an event by the Andhra Pradesh’s Minister for Information Technology Ponnala Lakshmaiah. The proposed Media City at Raidurg near Hitec City would be on the lines of international media cities in Manchester, Montreal, and Dubai. To have first‐hand knowledge of media cities, state delegates have also visited Dubai, Manchester and London from Nov 5th to 11th. They have even had talks with the managements of the media cities and discussed various aspects of the projects. AMD launches graphic solutions Computer chip manufacturer AMD has launched its powerful workstation graphics solutions line, AMD FirePro. These will come in a price ranging between INR 45,000‐ INR 3,00,000. This new line of workstation graphics will help deliver exceptional graphics experience to the workstation market. The workstation market verticals include computer‐aided design and engineering, media and entertainment, medical imaging and financial services. Among the graphics card launched, AMD FirePro W9000 GPU is the most powerful workstation graphics card ever created which features incredible compute, increased memory bandwidth and greater multi‐display support performance than the competing solution. Other workstation graphics cards launched included W8000, W7000, W5000. Moreover the concern has also added AMD FirePro Accelerated Processing Unit (APU) in its offering list that provides a powerful integrated visual computing platform for CAD (computer‐aided design) and media and entertainment workflows. India is the first market in Asia‐Pacific where AMD has launched FirePro graphics solutions while plans are there to launch them in China and Japan as well. Aircel launches pocket internet games Aircel has launched a new retail recharge card ‘Aircel Pocket Internet Games’. Pocket Internet Games is hailed as the first ever initiative taken that will allow Aircel subscribers to download and play unlimited games as well as have unlimited internet access at affordable prices. It has collaborated with Disney UTV and Electronic Arts Media and Entertainment – Monthly Update
(EA) for providing world‐class gaming content in order to bring alive pocket internet games. These would offer more than 1500 titles from EA & Disney’s gaming library for the enthusiasts. Games included would be ome of the most popular and sought after games like Need for Speed, EA Cricket, FIFA, Medal of Honor and Pirates of Caribbean amongst others. The Pocket Internet Games are available at Rs. 43 and Rs. 69 respectively. While the INR 43 plan offers unlimited 2G Data for 7 day validity, the INR 69 plan will provide unlimited 2G data for 14 days validity. Additionally, no Talk Time or SMS will be given in these offers and free gaming link has to be pushed during the validity period. Two animation films from India are up for Oscar race Two Indian animation films, namely ‘Delhi Safari’ and ‘Hey Krishna’ have been sent for Oscar nomination. The two films will be competing with rest of the 19 films for a final nomination for the Oscar night. ‘Delhi Safari’ is a3D animated movie directed by Nikhil Advani and revolves around a plot of a bunch of animals moving to Delhi for protecting their habitat. This film also features sounds of popular actors like Govinda, Boman Irani and Akshaye Khanna. The second film ‘Hey Krishna’ is also a 3D movie directed by Vikram Veturi. Discovery Kids launched in Andhra Pradesh Discovery Communications has formally launched its kids channel ‘Discovery Kids’ in Andhra Pradesh that is targeted at children below 14 years of age. This channel is set to be Discovery Communications’ eighth channel in India and has been rolled out in three languages namely English, Hindi and Tamil. Considered amongst the top 10 most‐viewed channels in India, Discovery has 140 million viewers clicking on to it annually. It has designed its content as a combination of entertainment and learning wherein animation has a share of 70%. The channel will include series in the likes of ‘Kim’, adapted from Rudyard Kipling’s novel, ‘Sally Bollywood’, that features adventures of an intelligent girl detective and ‘Howzzatt’, that is based on ‘galli cricket’.
News Update Expansion Plans
PVR opens eightscreen multiplex at Kurla PVR has launched its eight‐screen multiplex at Kurla in Mumbai. This is in accordance with the plan of reaching a mark of 200 screens and celebrating its 15 years of operations. Media and Entertainment – Monthly Update
PVR ECX (Kurla) is being hailed as the big brand‐promise that Mumbaikars would experience with the launch of Enhanced Cinema Experience (ECX) & first‐ever gold class. Moreover, currently PVR stands at 205 screens in 45 cinemas in 12 states, one union territory & 27 cities across India. PVR (ECX) is slated to introduce the next level of cinema experience which will include complete navigation programming, advanced technology and latest, elaborate food and beverages formats by a team of Chefs at Café ‘in non‐ticketed area, specialised kiosks, candy and the first‐ever gold‐class auditorium. Imax to open 15 theaters in India Imax Corp, the Canadian entertainment technology concern, will be opening at least 15 theaters in India by the end of 2013. The concern specializes in 2D and 3D projection, cameras and digital; sound systems, and already has two Imax theaters in the country, one each in Hyderabad and Mumbai. The company has recently opened one theater in Bangalore in October 2012. Its strategy includes coaxing Indian film production houses to either shoot with Imax cameras or to allow the company to convert their films to suit Imax theatre formats. The company is expecting more Indian film studios to agree to make films for Imax audiences and has also devised business model for such content tie‐ups. It bears the conversion cost of a film for 2.5% of the box office at Imax theatres.
News Update Financials PVR Cinemas likely to buy Cinemax PVR Cinemas is all set to buy promoter’s stake in Cinemax India. Kanakia Group is the promoter and holds 69.27% currently in the company. It is said that the 69% stake could be bought for around INR 5 bn and is likely to trigger an open offer. Rival theater operators Inox Leisure and Cinepolis India were also vying for this deal. If this deal gets cracked, PVR Cinemas will emerge as the largest multiplex operator and bring under its belt the 141 screens of Cinemax. Mavi Investment Fund (1.20%) and ICICI Prudential (6.70%) are the other two significant stakeholders in the company. Moreover, Reliance Media and Entertainment Fund recently bought over 1.5 lakh shares of Cinemax at INR 77.8 per share for a total amount of INR 12.2 mn.
Media and Entertainment – Monthly Update
Industry Expert Speak Aircel launches pocket internet games – Anil Gupta, Circle Business Head, Delhi, Aircel, “The potential in the Indian mobile gaming industry is still untapped. Mobile gaming expected to grow at a CAGR of almost 25% continues to be the largest contributor to the Indian Gaming industry. Since gaming is all that the youth wants to do, Aircel’s Pocket Internet Games offering an exciting bouquet of games, unlimited internet and flexible pricing makes this first ever retail gaming card a very disruptive product.”
Transactions (Sep 2012 – Nov 2012)
Date
Buyer
Target
Deal Size (INR mn)
% stake
Deal Status
Type of Transaction
30th Oct 2012
Reliance Media Fund
Cinemax India
12.2
N.A.
Completed
M&A
11th Oct 2012
Standard Chartered
Prime Focus
~1900
N.A.
Expected
M&A
3rd Oct 2012
Intel Capital
Hungama.co m
N.A.
N.A.
Expected
M&A
26th Sep 2012
Gradiente Infotainment
Hindi Entertainme nt Channels
500
N.A.
Expected
M&A
Annual Financial Results – Revenue (INR mn) Companies
FY ‘09
FY ‘10
FY ‘11
FY ‘12
3M India Ltd.
8,257./8
9,109.5*
11,893.2
14,103.7
114.1
71.0
136.3
206.5
1,600.1
1,341.7
1,309.3
2,691.2
7Seas Entertainment Ltd. Aksh Optifibre Ltd.
Media and Entertainment – Monthly Update
Bharat Sanchar Nigam Ltd.
301,964.2
279,134.4
270,447.1
NA
Bharti Airtel Ltd.
369,615.5
418,472.0
594,672.0
714,508.0
1,446.1
1,704.5
1,917.0
2,768.9
571.4
635.5
418.4
NA
DEN Networks Ltd.
7,121.9
9,103.4
10,221.1
11,284.9
Dish TV India Ltd.
7,381.1
10,850.0
14,366.6
NA
DQ Entertainment International Ltd.
1,500.9
1,754.7
2,078.5
2,327.5
Eros International Media Ltd.
6,265.3
6,408.8
7,109.5
9,438.8
Fame India Ltd.
1,355.6
1,697.0
1,669.0
NA
Hathway Cable & Datacom Ltd.
6,630.2
7,331.8
8,826.1
NA
Inox Leisure Ltd.
2,259.0
2,536.5
3,703.2
NA
Mahanagar Telephone Nigam Ltd.
41,837.0
35,513.0
36,778.0
NA
Padmalaya Telefilms Ltd.
18.1
18.3
22.6
NA
Pentamedia Graphics Ltd.
131.6
540.3
259.7
NA
Prime Focus Ltd.
3,543.7
4,532.5
5,143.4
NA
PVR Ltd.
3,521.1
3,341.3
4,572.9
5,087.0
225,245.4
214,963.8
224,303.5
187,160.0
Reliance Mediaworks Ltd.
6,624.0
7,272.0
7,920.7
7,987.8
Tata Communications Ltd.
100,718.9
110,255.6
119,319.9
141,960.5
6,065.5
6,640.5
9,295.1
NA
104,855.5
118,830.7*
NA
NA
Cinemax India Ltd. Crest Animation Studios Ltd.
Reliance Communications Ltd.
UTV Software Communications Ltd. Videocon Industries Ltd.
Media and Entertainment – Monthly Update
Wire and Wireless India Ltd.
3,096.3
2,726.5
3,059.5
3,323.6 *Change in financial year
Annual Financial Results – Income (INR mn) Companies
FY ‘09
FY ‘10
FY ‘11
FY ‘12
3M India Ltd.
649.5
801.6*
988.1
647.7
7Seas Entertainment Ltd.
11.6
6.3
12.7
24.8
Aksh Optifibre Ltd.
‐320.8
‐131.4
‐489.8
196.1
Bharat Sanchar Nigam Ltd.
5,748.5
‐18,226.5
‐63,842.6
NA
Bharti Airtel Ltd.
84,699.1
89,768.0
60,467.0
42,594.0
Cinemax India Ltd.
110.5
169.7
54.5
35.1
Crest Animation Studios Ltd.
‐134.2
2.58
‐1,713.1
NA
DEN Networks Ltd.
‐151.1
301.1
375.3
145.7
Dish TV India Ltd.
‐4,807.0
‐2,622.0
‐1,919.8
NA
DQ Entertainment International Ltd.
161.2
266.7
278.6
413.2
Eros International Media Ltd.
733.3
821.1
1,172.3
1,478.4
Fame India Ltd.
34.4
‐63.3
9.0
NA
Hathway Cable & Datacom Ltd.
‐916.1
‐801.0
‐312.7
NA
Inox Leisure Ltd.
243.4
260.6
50.0
NA
‐1,430.0
‐25,553.0
‐32,895.0
NA
‐20.4
‐4.9
‐23.1
NA
Mahanagar Telephone Nigam Ltd. Padmalaya Telefilms Ltd.
Media and Entertainment – Monthly Update
Pentamedia Graphics Ltd.
31.2
157.0
55.7
NA
Prime Focus Ltd.
145.8
334.2
760.9
NA
PVR Ltd.
87.1
13.5
81.8
254.2
60,449.3
46,550.0
13,456.5
9,280.0
Reliance Mediaworks Ltd.
‐513.8
‐1,432.1
‐3,288.6
‐5,180.2
Tata Communications Ltd.
3,158.0
‐5,977.4
‐7,769.0
‐7,946.5
356.3
533.3
1,354.8
NA
Videocon Industries Ltd.
5,151.3
‐2,749.5*
NA
NA
Wire and Wireless India Ltd.
‐962.3
‐1,757.9
‐624.3
‐913.4
Reliance Communications Ltd.
UTV Software Communications Ltd.
*Change in financial year
Quarterly Financial Results – Revenue (INR mn) Companies
OctDec 2011
JanMar 2012
AprJun 2012
JulSep 2012
3M India Ltd.
3,118.5
4,185.1
4,078.8
NA
NA
NA
69.1
34.3
633.8
756.8
618.6
643.9
184,767.0
187,294.0
193,501.0
202,732.0
2,780.6
3,176.3
1,943.5
2,027.4
637.4
725.1
309.3
643.4
Eros International Media Ltd.
4,084.2
2,068.4
2,570.3
2,292.7
Prime Focus Ltd.
2,127.5
1,891.3
1,882.1
1,963.8
7Seas Entertainment Ltd. Aksh Optifibre Ltd. Bharti Airtel Ltd. DEN Networks Ltd. DQ Entertainment International Ltd.
Media and Entertainment – Monthly Update
PVR Ltd.
1,364.6
1,180.1
1,760.7
1,890.0
Reliance Communications Ltd.
50,521.0
52,796.0
53,192.0
46,340.0
Tata Communications Ltd.
36,041.0
39,612.8
41,073.9
42,709.9
871.7
865.2
1,096.6
933.1
Wire and Wireless India Ltd.
Quarterly Financial Results – Income (INR mn) Companies
OctDec 2011
JanMar 2012
AprJun 2012
JulSep 2012
3M India Ltd.
22.9
217.7
167.1
NA
7Seas Entertainment Ltd.
NA
NA
11.8
1.9
Aksh Optifibre Ltd.
65.2
80.2
105.2
62.9
10,113.0
10,059.0
7,622.0
7,212.0
DEN Networks Ltd.
35.3
44.7
122.3
155.8
DQ Entertainment International Ltd.
169.8
78.6
‐90.9
141.8
Eros International Media Ltd.
690.9
297.3
314.1
260.8
Prime Focus Ltd.
262.9
209.2
209.8
95.4
PVR Ltd.
90.0
‐132.6
75.6
160.9
Reliance Communications Ltd.
1,862.0
3,323.0
1,624.0
1,020.0
Tata Communications Ltd.
‐1,530.6
‐2,609.4
‐1,428.6
‐2,742.4
‐140.2
‐243.4
‐10.6
‐84.5
Bharti Airtel Ltd.
Wire and Wireless India Ltd.
Events Calendar Media and Entertainment – Monthly Update
FICCI – Media Entertainment & Business Conclave Date: 4th December, 2012 City: Kolkata Organizer: FICCI Website: http://www.ficci‐frames.com/events.htm
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Media and Entertainment – Monthly Update