Viacom 18 sells movie rights to Star

Viacom 18 sells movie rights to Star

Mumbai: Viacom 18 Media Pvt. Ltd, which runs entertainment channel Colors, has sold the rights to a large number of Hindi movie titles to rival Star India Pvt. Ltd for an estimated 400-450 crore.

Viacom 18 has put on hold the launch of its movie channel, a Network18 group executive said on condition of anonymity. Viacom 18 is an equal joint venture between the US’ Viacom Inc. and the Network18 Group.

Raj Nayak, chief executive of Colors, said Viacom 18 has “offloaded part of our film library. We still have a large library and have also kept enough runs to take care of our main channel needs".

The sale will add muscle to the Star India network, already a big player in the Hindi movie space with more than 700 titles in its library. It runs the Star Gold movie channel.

Nayak said the sale was a win-win for both Star and Viacom 18. “We had acquired a large number of films over the years and this syndication deal has helped us monetize a part of it."

Star India chief executive Uday Shankar said his company has acquired the rights to more than 400 Hindi movie titles from Viacom 18.

“We have rights to air most of the films up to seven years, but subject to the deals struck by them (Viacom 18) with individual producers," he said.

Industry experts are not surprised by Viacom 18’s decision to sell the rights, considering launching a movie channel in the current market would be difficult.

“Naturally, if they are not intent in launching a separate movie channel, it makes sense for them to sell the rights of these films to a rival broadcaster for the best possible price," said Jehil Thakkar, executive director at KPMG Advisory Services Pvt. Ltd. “It’s a fairly tense market and prices of acquiring tent-pole films and replenishing a library on a consistent basis comes at a huge price."

Rivals such as Zee Cinema are already well-grounded in this space. “Competition will force them to acquire new titles and it would be tough to sustain operational costs. It is a good move to not launch the movie channel at this point in time," Thakkar said.

According to his estimate, rights for a star-studded Hindi film would be priced at a minimum 20-30 crore, and for an English film at less than 10 crore.

Star Gold, Multi Screen Media Pvt. Ltd’s Sony and Zee Entertainment Enterprises Ltd’s Zee channels have been investing aggressively to acquire premium movie titles, said Ankit Kedia, research analyst at Centrum Broking.

“The market is extremely competitive and it doesn’t make sense for them (Viacom 18) to launch a movie channel in the immediate future," Kedia said.