Media and Entertainment Sector in India Monthly Update June 2012
Top Story Digitization deadline extension gives a blow to DTH provider The Indian Government’s decision to extend the deadline of cable digitization from June 30 to that of October 31 is considered to be a massive blow to the DTH (direct‐to‐ home) providers. Though the Government is associating this deferment with consumers’ interest done after intensive and extensive consultations with all the stakeholders, yet DTH operators are apprehensive that it will put a strain on the financial health of the industry. The players stated that they will now have to bear the additional burden of inventory carrying costs and other investments in infrastructure creation. But they also harp on the lines of spelling strict punitive action against those who fail to meet the new deadline. Though the deadline is extended to a period of additional four months, it still remains of high concern about its efficacy as there was not much progress in the last six months.
News Update General
New DDB TV operating system launched in India The DDB Foundation, union of seven technology firms, has launched a new technology platform that looks at changing the TV viewing experience in India. The new technology is termed Digital Direct Broadcast (DDB) and primarily performs multiple functions on a single platform. The DDB‐enabled TV has the potential to receive digital signals without a set‐top box and also offers audio‐visual experience that has never been witnessed before. Further, the cloud computing abilities allow users to save files in addition to allowing them to browse through websites. The technology also has the ability to convert 2D channels into 3D quality thereby negating the need to use multiple devices. It boasts of features like dual core processor of 450 MHz, 14 bit video processor, Motion Enhancement and Motion Correction. In addition to 3D technology, it also supports Faroudja Video and Audio Optimized, Strata Certified Audio and 10‐band Graphic Equalizer and HDMI‐ CEC.
Media and Entertainment – Monthly Update
The Indian market is slated to witness a DDB‐enabled LED TV being launched within a few months and it is expected that by the end of 2015, around 50% of televisions would be operating on DDB technology. Digitization of 4,000 screens on the anvil for UFO Moviez Digital cinema chain UFO Moviez has announced that it is all set to digitize 4,000 screens, including over 1,000 in the overseas market. The activity is slated to be completed within the next couple of years. They have figured out that there are around 3,000 theaters that are not digitized and as such are targeting all of them in the next two years. In lines with the plan, they have drafted an investment of INR 2.5‐3 bn and are also focusing on the untapped Middle‐ East and Latin American countries through their subsidiary Scrabble Entertainment. Around 3,500 screens in India use digital cinema installations from UFO wherein it offers end‐to‐end digital cinema solutions for both single‐screen and multiplexes through a unique pay‐per‐view business model. Further, it has 800 screens in the overseas market which they plan to increase to up to 2,000 screens within a year. Contrary to the old analog system wherein a cinema theater owner has to shell out INR 60,000 to buy the print of a film, digital format entails a cost reduction to INR 18,000. Advantages befit digitized format which is further aided with the fact that presently most film producers are making films and even selling them in the digital format which leaves the theater owners with no option but to go digital. Bangalore to witness setting up of Institute of Creative Excellence After setting its footprint in Mumbai and Delhi, film producer Ekta Kapoor is looking at opening a branch of her media school, Institute of Creative Excellence, in Bangalore. This media school offers specializations in fields like acting, modeling, cinematography, direction, editing, production, scriptwriting, sound and visual effects. After figuring out that almost 15% of their total applications in Mumbai are getting sourced from South, they have zeroed in on Bangalore as it represents the hub of South India. Added to it is the fact that Bangalore has been a major producer of successful personalities in the Media and Entertainment domain. The media academy is looking at conducting Modeling, Dance and Young Filmmaker Program aimed at children to nurture young talents and groom them towards shaping their future in this domain. UTV to add a Bollywood Channel in its offering portfolio Within a year of its launch in India and the Middle East, UTV is all set to launch its Bollywood channel UTV Stars in the UK market.
Media and Entertainment – Monthly Update
The channel will be named as UMP Stars in the UK and will look towards strengthening the Bollywood quotient and increase its foothold in the domain. Slated to start on 11th June this year, UMP Stars will be available as a free‐to‐air channel on Sky EPG 853. The ad sales of the channel will be handled by Sky Media while the distribution will be catered to by TVMedia3.com which also distributes Disney UTV Channels in the UK and Europe. UTV Stars’ content primarily caters to film music, features and non‐fiction programming and news segment. Close to the heels of its launch and success of UMP Movies in December last year in the UK, the next logical step is to launch UMP Stars whose launch is actually pre‐ poned to capture the growing interest for this segment in the UK market. Dish TV introduces revenue sharing model for LCOs In a bid to speed up the process of digitization, Dish TV has come up with an attractive initiative for the Local Cable Operators (LCO). The new scheme now looks at offering revenue for each set‐top‐box (STB) sold by the LCO as an incentive to boost consumers to migrate from cable TV networks to that of direct to home (DTH) domain. Dish TV is considered to be having the largest DTH base and is eyeing to add more subscribers with this initiative on board. It will work in the lines of pure referral system basis. When a subscriber will approach the LCO for installation of set‐top‐box, if the LCO suggests switching over to Dish TV, he will earn an amount of INR 400 for each basic Dish TV set‐top‐box and INR 600 for each high definition (HD) box with an additional INR 200 installation charge. The monthly recharge will also reward LCOs with INR 100 per consumer on Super Platinum and INR 125 for HD STB. Further, he will also earn INR 150 for every visit to the consumer’s home for repairs or problem solving. This scheme of revenue sharing model will act as a profitable venture for both the LCOs and Dish TV, thereby, speeding up the process of digitization. PS3 games come at cheaper price at PSN Store Since console games are priced higher that its PC counterparts, retail pricing of these games emerges as a warring topic of discussion. While there are several factors contributing to the price disparity, key factors working would be India’s import duty structure. Though publishers and distributors are working towards reducing the price of console games, the falling rupee is not helping much in this aspect, which gets reflected in the prices of Xbox 360 and PS3 games rising to INR 2,799 from INR 2,499. A growing collection of PS3 games in the PlayStation Store has surfaced as a respite wherein games are available digitally and they are of far lesser price. The digital versions are termed to be cheaper by 43% on an average. However, a note of caution is this aspect remains in the games being of massive size weighing more that 10 GB thus requiring a high speed internet connection with plenty of bandwidth and a Media and Entertainment – Monthly Update
generous FUP to make the activity of digital purchase a regular habit. Where prices are on an upward trend, games being available at cheaper prices at a virtual store come as a respite though it works for digital versions. Internet Radio portal ‘RadioWhiskey.in’ to see light of the day in midJuly Reliance Broadcast Network Limited’s (RBNL) former head Madhukar Pandey is set to launch an Internet Radio portal ‘RadioWhiskey.in’ by mid‐July this year. The radio portal will be a 24*7 radio station with a mix of both Indian and international music but the core focus will be on Indian music. An interesting feature will be that of its availability of its streaming service globally. The radio portal is also considered to feature audio pop‐up ads and commercial ad slots. However, it will have small inventory initially with 6 slots of 30 seconds each per hour. This comes in the wake of shutting down of 104 online music streaming/download sites in March 2012 and beginning of offering Internet licenses to websites to stream music. Reliance Animation and Lovely University join hands BIG Animation Infotainment and Media School (AIMS), a Reliance Animation Training Academy has announced about its tie‐up with Lovely Professional University (LPU). Together they would offer courses in visual effects (VFX) and animation film‐making. The collaboration is being hailed as a strategic move to address the growing need for skilled animation professionals. The memorandum of understanding stated that the institutes will be offering Bachelor of Science program in digital animation film‐ making and digital VFX film‐making. Additionally, BIG AIMS will also offer short‐term diploma and certificate courses in affiliation with LPU. The first academic year will witness an enrollment of 600 students supported by a fee structure varying between INR 7,000‐10,000 per month. Educational institutes look at collaborating with the industry majors since they are the ones who provide jobs to the students. CSG International extending support to India’s cable industry CSG Systems International, a global provider of software and services based support solutions has indicated that it is set to offer new ways to further the evolution of Indian cable operators into the digitization era. In order to cater to the cable industry’s demand at the time when digitization has become a critical issue, CSG is looking at bringing its comprehensive portfolio, expertise and a variety of delivery models including licensed and a new managed service offerings for CSG single view, its real time, convergent customer management, charging and billing solution to the Indian market. To transform from analog to digital television offering and services, the cable operators need to create a whole new set of tiered bandwidth, high speed data and content offerings to accommodate a wide variance across customer usage patterns and preferences. Such activities need the support of Business Support systems (BSS) as key back‐office functionality. Herein Media and Entertainment – Monthly Update
CSG Singleview will help rendering a high degree of flexibility to the cable business model and work towards accelerating the process of digitization in the Indian space. A global leader in the domain of services and solutions can support the cable industry in India riding on its accumulation of knowledge, experience and credibility built over the period of 25 years functioning in the same domain in the United States. TV18 and Viacom18 to consolidate their media distribution TV 18 Group and Viacom Inc have announced about its merger in the media domain by forming a new distribution joint venture (JV) called IndiaCast. The JV is being formed between TV18 and Viacom 18 Media wherein the distribution system IndiaCast will have the mandate to drive both domestic and international channel distribution, placement services and content syndication for TV18, Viacom 18, A+E Networks and the Eenadu Group across all platforms including Cable, DTH, IPTV, HITS and MMDS. This move attempts to consolidate all the content assets of the two media houses for monetization across all media platforms in India and abroad. The Indian distribution market is throwing up enough of opportunities which the media houses set to capitalize on. In lines with being one of the high‐growth areas in this industry, distribution in a digitized environment is expected to post a healthy growth rate. News Corp to split business into two arms Rupert Murdoch‐owned News Corporation is weighing the option of splitting its business into two verticals thus separating film and television from its publishing business. This move comes in the wake of a phone hacking scandal at the company’s UK publishing business which resulted in the closure of News of the World tabloid. This also led to James Murdoch stepping down from the News International board. News Corp’s film and entertainment business includes Fox News Channel and Fox Business Network, Star Television, Fox Broadcasting Company, BSkyB and 20th Century Fox. While the group’s publishing business include The Wall Street Journal, the Times of London and the Australian newspaper. HarperCollins also lists in their asset portfolio which is primarily a book publishing company with joint venture with India Group for the Indian market. Though the final decision has not been taken, it is anticipated that James Murdoch is seriously considering the option of splitting which he had resisted in the past.
Media and Entertainment – Monthly Update
News Update Expansion Plans
Cinepolis inaugurates a new multiplex in City of Lakes Cinepolis, the 4th largest cinema chain globally and India’s 1st international exhibitor launched a 7 screen multiplex at Aashima Mall in Bhopal. This multiplex with a capacity of over 1,400 seats is the largest in the state of Madhya Pradesh. The multiplex is slated to showcase 35 shows every day and is expected to render a state of the art movie going experience. In addition to world class service, a great ambience and most advanced audio and video technologies, Cinepolis is also known for its RealD 3D, hailed as the world’s best 3D technology. Other features include Dolby 7.1 digital surround sound and 100% DCI complaint 2K digital projectors. Further, digital technology used enables it to showcase alternate content in the likes of music concerts, cricket and other sporting events. In order to enhance the experience, in house coffee shop also lists in the service offering portfolio. ‘Club Cinepolis’ is another add‐on that entails people to register and avail of reward points for every purchase made at the Cinepolis Box Office, which can be later redeemed for free tickets. Moreover, tickets can be purchased from company website, box office counter, or even mobile ticketing application. In lines with expanding in the tier II and III towns, Cinepolis is looking at providing superior entertainment to the people of Bhopal. RBNL establishes foothold in Canadian market Reliance Broadcast Network (RBNL), which boasts of a bouquet of seven TV channels, has expanded its reach to international markets with its latest foray being in Canada. It has launched Big Magic International in Canada as a part of building on the brand lineage of its recently launched Big Magic channel in India. The channel is positioned to offer Indian entertainment and daily business news from Bloomberg UTV to audiences. It has collaborated with Ethnic Channels Group which happens to be a Canada‐based television broadcasting, distribution and communications company. Its set of programs will include a mix of daily sitcoms as also shows on varied genres and will further draw from RBNL’s intellectual property vertical’s televised award shows. A primary USP of the channel will be a 30‐minutes update each day loaded with the latest news form the Indian capital markets. This foray is slated to bridge the gap in the infotainment genre for South Asian audiences in Canada. This channel will serve to provide not only relevant fresh programs for entertainment but also look at presenting business updates from India. Media and Entertainment – Monthly Update
News Update Financials News Corporation is all set to buy ESPN’s equity stake News Corporation and ESPN have announced its strategic partnership which entails an unit of News Corporation to buy ESPN’s 50 percent equity interest in ESPN Star Sports (ESS). This transaction will empower News Corporation to own and operate all of the ESS businesses. This transaction is subject to customary regulatory approvals and has bestowed both the concerns to jointly manage ESS. Through this, News Corporation continues to simplify their operating model, consolidate their affiliate ownership structures as also facilitates their commitment to deliver sports programming in emerging markets. Along with ESPN, News Corporation has also announced that Manu Sawhney, the Managing Director of ESS will process a smooth transition of his role of MD to Peter Hutton who in turn will report to the ESS Board. This collaboration will primarily look into serving Asian sports fan through ESPN‐branded digital businesses such as ESPNCricinfo, ESPNFC and ESPN Mobile. Industry Expert Speak CSG International extending support to India’s cable industry – Ian Watterson, Vice President and Managing Director, Asia Pacific,CSG International, "Digitisation of the cable networks is building momentum across India, driven by rapid changes in consumers’ digital consumption behaviour. Cable service providers will need to rise to the challenge and transform the way in which they offer new services and support customers. CSG is a global leader in the provision of solutions and services that can support the cable industry in India, with the knowledge, experience and credibility built from over 25 years of leading this same evolution for cable and satellite operators in the United States.” Media and Entertainment – Monthly Update
Transactions (Apr 2012 – Jun 2012)
Date
Buyer
Target
Deal Size (INR mn)
% stake
Deal Status
Type of Transaction
26th Jun 2012
Sony Pictures Television
Multi Screen Media Pvt. Ltd.
INR 15120
32%
In process
Buy
27th Apr 2012
CA Media
Endemol India
Undisclosed
49%
Completed
Buy
13th Apr 2012
Future Ventures India Ltd.
Amar Chitra Katha Pvt. Ltd.
Undisclosed
65.84%
Completed
Investment
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
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
7Seas Entertainment Ltd. Aksh Optifibre Ltd.
Cinemax India Ltd. Crest Animation Studios Ltd.
Media and Entertainment – Monthly Update
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
Reliance Communications Ltd.
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
3,096.3
2,726.5
3,059.5
3,323.6
UTV Software Communications Ltd. Videocon Industries Ltd. Wire and Wireless India Ltd.
*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
‐320.8
‐131.4
‐489.8
196.1
Aksh Optifibre Ltd.
Media and Entertainment – Monthly Update
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
Padmalaya Telefilms Ltd.
‐20.4
‐4.9
‐23.1
NA
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
Reliance Communications Ltd.
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
Mahanagar Telephone Nigam Ltd.
UTV Software Communications Ltd.
Media and Entertainment – Monthly Update
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 *Change in financial year
Quarterly Financial Results – Revenue (INR mn) Companies
AprJun 2011
JulSep 2011
OctDec 2011
JanMar 2012
3M India Ltd.
3,470.0
3,277.5
3,118.5
NA
7Seas Entertainment Ltd.
51.6
56.3
NA
NA
Aksh Optifibre Ltd.
653.2
647.4
633.8
756.8
169,7490
172,698.0
184,767.0
187,294.0
601.7
806.4
765.7
NA
NA
NA
60.9
NA
DEN Networks Ltd.
2,786.3
2,552.0
2,780.6
3,166.0
DQ Entertainment International Ltd.
279.6
629.8
637.4
NA
1,538.1
1,748.0
4,084.2
2,068.4
NA
NA
NA
NA
8,430.2
NA
8,521.0
NA
Padmalaya Telefilms Ltd.
8.5
8.8
6.1
NA
Pentamedia Graphics Ltd.
50.2
49.2
NA
NA
Prime Focus Ltd.
1,674.8
2,025.5
2,127.5
NA
PVR Ltd.
1,164.6
1,375.7
1,364.6
1,172.0
Bharti Airtel Ltd. Cinemax India Ltd. Crest Animation Studios Ltd.
Eros International Media Ltd. Inox Leisure Ltd. Mahanagar Telephone Nigam Ltd.
Media and Entertainment – Monthly Update
Reliance Communications Ltd.
49,401.0
50,402.0
50,521.0
53,100.0
Reliance Mediaworks Ltd.
1,890.9
2,307.9
2,073.5
1,715.5
Tata Communications Ltd.
32,570.6
33,736.1
36,041.0
39,612.8
UTV Software Communications Ltd.
2,050.4
2,309.2
1,584.3
NA
NA
NA
30,733,900.0
NA
798.3
893.0
871.7
852.5
Videocon Industries Ltd. Wire and Wireless India Ltd.
Quarterly Financial Results – Income (INR mn) Companies
AprJun 2011
JulSep 2011
OctDec 2011
JanMar 2012
3M India Ltd.
288.3
118.8
22.9
NA
7Seas Entertainment Ltd.
7.2
8.2
NA
NA
Aksh Optifibre Ltd.
1.2
49.5
65.2
80.2
12,152.0
10,270.0
10,113.0
10,059.0
Cinemax India Ltd.
11.1
60.7
‐10.8
NA
Crest Animation Studios Ltd.
NA
NA
13.8
NA
DEN Networks Ltd.
18.3
44.3
35.3
47.6
DQ Entertainment International Ltd.
‐135.4
217.3
169.8
NA
Eros International Media Ltd.
216.8
273.5
690.9
297.1
NA
NA
NA
NA
‐8,500.4
NA
‐9,297.7
NA
0.4
0.6
‐5.0
NA
Bharti Airtel Ltd.
Inox Leisure Ltd. Mahanagar Telephone Nigam Ltd. Padmalaya Telefilms Ltd.
Media and Entertainment – Monthly Update
Pentamedia Graphics Ltd.
5.5
2.6
NA
NA
Prime Focus Ltd.
256.1
264.3
262.9
NA
PVR Ltd.
154.9
142.0
90.0
‐132.4
Reliance Communications Ltd.
1,574.0
2,521.0
1,862.0
3,316.0
Reliance Mediaworks Ltd.
‐1,201.4
‐1,205.1
‐1,511.2
‐1,262.5
Tata Communications Ltd.
‐2,182.3
‐1,652.0
‐1,530.6
‐2,609.4
‐30.6
‐288.6
‐962.0
NA
NA
NA
864,200.0
NA
‐406.2
‐145.5
‐140.2
‐243.5
UTV Software Communications Ltd. Videocon Industries Ltd. Wire and Wireless India Ltd. Events Calendar
12th Cinema India Expo 2012 Date: 23rd – 24th Jul 2012 Venue: Renaissance Hotel, Convention Centre City: Mumbai Organizer: Scrabble Entertainment Ltd. and Cinema India Website: http: http://www.cinemaindiaexpo.com/
Media and Entertainment – Monthly Update
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Media and Entertainment – Monthly Update