TV18's IndiaCast in distribution pact with DisneyUTV arm

Moneycontrol Bureau

IndiaCast, the global distribution arm of TV18 and Viacom18, has formed a joint venture with DisneyUTV company UGBL for aggregation and wholesale distribution business of TV channels in India. IndiaCast is a 50:50 joint venture between TV18 and Viacom18. In its release, TV18 said the new distribution tie-up is a step-down joint venture and is envisaged as a 74:26 venture between IndiaCast and DisneyUTV. The deal is subject to regulatory approvals, the company said. IndiaCast will move its domestic distribution business into this new venture, while continuing to manage its international distribution operation as well as new media distribution for TV18, Viacom 18, A+E Networks | TV18 and Eenadu channels. DisneyUTV will also move its domestic distribution activities for its entire bouquet of 9 channels to the new entity.The new step down entity will hence provide 35 channels from the TV18, Viacom18, Disney UTV, Eenadu Group and A+E Networks | TV18 to Cable, DTH and HITS platforms in India. The current IndiaCast management headed by Anuj Gandhi (CEO, IndiaCast), will manage the joint venture. TV18 will continue to hold majority economic interest in both IndiaCast and the new step-down joint venture through a combination of its direct holding through TV18 and the indirect holding through Viacom18. TV18's effective economic interest in IndiaCast is 75 percent and  around 56 percent in the new venture. Announcing the transaction, Raghav Bahl, Managing Director, Network18 said the venture will help in shaping the future course of the domestic distribution landscape. "At TV18, we have always believed that as industry leaders we should not only forge and nurture successful partnerships but also spearhead initiatives that accrue benefits to all stakeholders," he said in the press statement. Sai Kumar, Group CEO, said the deal would add to IndiaCast's bargaining power. "We are confident that the coming together of some of the largest and most premier broadcasting properties in the country will significantly add to IndiaCast’s bargaining power and its strength as one of India’s foremost television distribution ventures," he said. Disclaimer: moneycontrol.com and TV18 are both part of Network18 Media and Investments. _PAGEBREAK_ Below is the edited transcript of Anuj Gandhi (Group CEO, IndiaCast) and MK Anand, (MD of Media Networks at Disney UTV) to CNBC-TV18 Q: What extent would Disney channel strengthen with this tie-up to the IndiaCast bouquet? Is it true that on the domestic front the new entity will begin by providing 35 channels to cable and DTH platforms? Gandhi: We are focusing on a few segments of few genres. So, with Disney and Nickelodeon we will have four out of the top five kids’ channels. We will strengthen our youth portfolio with MTV and Bindaas. These are the leaders in the category. Also, we  will supplement our main general entertainment channel (GEC); Colors. It is part of the bouquet and a driver channel, with UTV Movies. It is a very strong Hindi movie channel in the market. I think, with coming together of IndiaCast channels and UTV Disney channels, we have a very formidable combination. This will drive our distribution revenues going forward. Q: Why do you choose IndiaCast platform and what essentially are the synergies of this pact according to you? Anand: We needed somebody who is like-minded in terms of aspirations and ambitions to challenge the Indian market. TV18 group has all those and the age of the network is also quite similar to the way we are. These are the considerations that went into partnering with TV18 and IndiaCast. From a synergy point of view, as Anuj Gandhi pointed out, this is an extremely complimentary set of channels. We are basically filling in the gaps. The gap was a driver channel, like Colors. An extremely good running mate for our movie channels business between UTV Action and UTV Movies. Of course in the youth and kids space, the bouquet is going to offer most of what consumers want. So, both the bouquets are coming together and becoming one complete bouquet. That is what excited us. Q: Do you see this leading to significant market share gain? Would IndiaCast gain more bargaining power because of this move? Gandhi: Any aggregation in the business at the content level adds more negotiation power, especially at distribution once which is largely analog. That is when one goes and meets with the multiple system operators (MSOs) or other platforms. However, during digitisation, it is critical that the aggregation content, when we go and meet a client adds to not only negotiation but also what space one need to fill in the television screen. Just like MK Anand just said that we have formidable channels in each of the categories in youth, kids and GEC. So, we are an essential network to be carried by each platform. I think that helps when one carries a bouquet of 35 channels and goes and speaks to a client. It helps both in terms of carriage as well as in terms of revenues. Q: Coming together of two large broadcasting properties in a country, is such a venture essentially the future of domestic distribution landscape going ahead in India? Anand: There is always merit in numbers. It is always better to be united and consolidated from that point of view. The industry over the last 20 years has so many players and varied activities happening. This decade will see consolidation in not just distribution but in various other areas, of course digitisation being one of the drivers.
 
It is only going to be good for the consumer. It is going to be bringing in better, more comprehensive and stronger entertainment products to them. At a business level, it helps to be part of numbers and it helps as Anuj Gandhi said in negotiating with other elements within the overall landscape. Q: TV18 has been focusing a lot on distribution because post digitisation distribution has become the key. Will this move go long way in bolstering distribution revenues and by how much? Gandhi: It is obvious, the way we have grown in last three quarters as far as IndiaCast distribution revenues are concerned. It is clear that we are on a growth trajectory. How much revenue will go up, I would say that we will get a fair share. We have been in the business for a long time as a network, I do not think we have got a fair share of distribution revenues. Going forward, with this JV, which we proposed and on what we have done on our digitization deals on last quarter, I think we will see a significant improvement in our revenue numbers. We are hoping that we will finally get a fair share of distribution revenues in this country.