In yet another step forward in its media and entertainment ambition, Television Eighteen India Ltd announced a 50:50 joint venture with Viacom Inc, the US-based media conglomerate. Financial terms of the arrangement were not disclosed.
The new entity, called Viacom18, will launch a Hindi entertainment channel within a year and will also oversee Viacom’s Indian TV channels —MTV, VH1, and Nickelodeon India. The new company will also manage TV18’s motion pictures business, which includes production, acquisition, distribution and marketing of films, and also jointly own TV18 Group’s The Indian Film Co., which will soon be listed on London’s Alternative Investment Market.
Bill Roedy, vice-chairman, MTV Networks, said: “Viacom identified India as a market for a mainstream entertainment channel some years ago, but did not enter it due to the lack of an appropriate partner.”
The new venture comes at a time of unprecedented growth for India’s television industry. At present, more than 350 channels are available on cable and satellite, and by 2009 more than 30 new channels of various genres are expected to be on air. Ronnie Screwvala’s UTV Software Communications Ltd and New Delhi Television Ltd are among the other the broadcasters launching new channels.
“We have seen television in India grow from the first day,” said Raghav Bahl, managing director, TV18 Group. “That was its first phase. We are now launching the second wave.”
Bahl described the venture as a homecoming of sorts for TV18. He said that before the company focused its energies on news, it used to produce shows for MTV India in the early ’90s.
Viacom18’s focus will be solely on entertainment across multiple platforms. While Viacom’s Paramount Pictures and DreamWorks Studios are not part of the agreement, Philippe Dauman, president and CEO, Viacom, said the two studios would seek to collaborate with the new company.
A recent study by PricewaterhouseCoopers said India’s media and entertainment business was likely to more than double over the next five years, hitting $22.5 billion (Rs92,250 crore) in sales by 2011. Sales touched nearly $10.4 billion in 2006, up 20% from a year earlier.
Dauman said India’s huge youth market was a big attraction for Viacom. “India has the world’s largest youth population of 700 million below the age of 35. This is a natural evolution of our business,” said Roedy.
While a CEO has yet to be named for the new venture, Viacom18’s board of directors will have equal representation of Viacom and TV18 executives. TV18 executives also said that although the channel genre was known, their audience would become clear over time. The new company will gradually bring into India some of Viacom’s more niche channels, besides launching original channels. Viacom has a large array of popular channels, including Comedy Central and TV Land.
This new venture is TV18’s third significant partnership with a major media company. TV18 earlier entered an agreement with NBC Universal Inc to launch its business news channels CNBC and CNBC Awaaz. Last year, it launched CNN-IBN, a mainstream news channel, in partnership with Time Warner Inc.
TV18’s current motion pictures division, Studio18, recently tied up with Virgin Comics to publish graphic novels and co-produce movies. TV18 has a significant web presence as well.
When asked if Viacom was entering an overcrowded market, Roedy said, “The timing, I believe, is right now. Our growth in India has all along been double-digit and we expect this to continue.”
Shares of TV18 closed 1.9% or Rs15.90 higher at Rs866 a share.