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Transcript of Indian Media Market report
industry report
Indian media market
Indian media market
© Heernet ventures limited
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ABOUT THE AUTHOR
Heernet ventures limited Heernet ventures provides research, analysis and advisory services in the media sector. For more details please visit the website www.heernet.com.
Published by: Heernet ventures limited 147, Dalling Road London W6 0ET Tel: +44 (0) 208 180 7223 Fax: +44 (0) 870 762 3014
Third edition: March 2007
© Heernet ventures limited 2007. All Rights Reser ved.
TERMS & CONDITIONS OF USE
Every attempt has been made to ensure that the information in this report is correct at the time of publication. Heernet ventures limited and its directors do not accept any liability for any errors or omissions in the report’s content. This report does not in anyway constitute investment advice or investment recommendations. Heernet ventures limited does not provide investment advice or regulated investment advisory services and is not regulated by the Financial Services Authority (FSA) in the UK or any other financial services regulator in any other country.
The content of this report can not be reproduced without the permission of the authors. Unless specified, the views expressed in this report are purely those of the author.
Indian media market
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Table of contents
I) CURRENT TRENDS ............................................................................................................................................................. 13
II) INVESTMENT THESIS ........................................................................................................................................................ 18
A. INVESTMENT CASE ...................................................................................................................................................... 19
B. GROWTH FORECAST (2007 – 2012) ........................................................................................................................... 23
C. ANALYSIS OF INVESTMENT ACTIVITY ........................................................................................................................... 30
III) MEDIA MARKET OVERVIEW ........................ .................................................................................................................... 39
A. OVERVIEW ................................................................................................................................................................. 40
B. MARKET SIZE AND STRUCTURE ................................................................................................................................... 41
C. MEDIA PENETRATION AND USAGE ............................................................................................................................... 44
D. ADVERTISING SPEND .................................................................................................................................................. 46
E. MAJOR PLAYERS ........................................................................................................................................................ 50
F. REGULATORY ENVIRONMENT ...................................................................................................................................... 52
G. INTERNET PENETRATION AND USAGE .......................................................................................................................... 54
H. TELECOMS ENVIRONMENT .......................................................................................................................................... 56
IV) COUNTRY PROFILE .......................................................................................................................................................... 62
A. OVERVIEW ................................................................................................................................................................. 63
B. ECONOMIC PROFILE.................................................................................................................................................... 65
C. DEMOGRAPHIC PROFILE ............................................................................................................................................. 69
V) SECTOR PROFILES ........................................................................................................................................................... 73
A. TELEVISION ................................................................................................................................................................ 74
B. NEWSPAPERS............................................................................................................................................................. 83
C. RADIO ........................................................................................................................................................................ 88
D. CONSUMER MAGAZINES .............................................................................................................................................. 94
E. BUSINESS, SCIENTIFIC AND ACADEMIC MEDIA ............................................................................................................. 96
F. OUTDOOR ADVERTISING ............................................................................................................................................. 99
G. FILMED ENTERTAINMENT .......................................................................................................................................... 101
H. MUSIC ...................................................................................................................................................................... 104
I. CLASSIFIED DIRECTORIES ......................................................................................................................................... 105
J. ONLINE MEDIA .......................................................................................................................................................... 107
K. MARKETING SERVICES .............................................................................................................................................. 111
VI) COMPANY PROFILES .............................. ....................................................................................................................... 113
A. ADLABS FILMS .......................................................................................................................................................... 114
B. ANAND BAZAAR PATRIKA .......................................................................................................................................... 118
C. BALAJI TELEFILMS .................................................................................................................................................... 120
D. BUSINESS STANDARD ............................................................................................................................................... 124
E. CYBERMEDIA ........................................................................................................................................................... 126
F. DAINIK BHASKAR ...................................................................................................................................................... 131
G. DECCAN CHRONICLE ................................................................................................................................................ 132
H. DISH TV INDIA .......................................................................................................................................................... 136
I. EENADU GROUP ....................................................................................................................................................... 137
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J. ENTERTAINMENT NETWORK ..................................................................................................................................... 139
K. ETC NETWORKS ...................................................................................................................................................... 144
L. HATHWAY CABLE ...................................................................................................................................................... 147
M. HT MEDIA ................................................................................................................................................................ 150
N. INDIA TODAY GROUP................................................................................................................................................. 155
O. INDIACOM ................................................................................................................................................................. 158
P. INFOMEDIA INDIA ...................................................................................................................................................... 160
Q. INDIAN EXPRESS GROUP .......................................................................................................................................... 164
R. INNETWORK ENTERTAINMENT .................................................................................................................................. 168
S. INFO EDGE ............................................................................................................................................................... 170
T. INOX LEISURE ........................................................................................................................................................... 173
U. JAGRAN PRAKASHAN ................................................................................................................................................ 176
V. JASUBHAI GROUP ..................................................................................................................................................... 180
W. K SERA SERA PRODUCTIONS ................................................................................................................................... 182
X. MALAYALA MANORAMA ............................................................................................................................................. 186
Y. MID-DAY MULTIMEDIA ............................................................................................................................................... 188
Z. MUKTA ARTS ............................................................................................................................................................ 193
AA. NDTV ...................................................................................................................................................................... 196
BB. NIMBUS COMMUNICATIONS ....................................................................................................................................... 200
CC. PADMALAYA TELEFILMS ...................................................................................................................................... 202
DD. PRASAR BHARTI.................................................................................................................................................. 205
EE. PRITISH NANDY COMMUNICATIONS ........................................................................................................................... 208
FF. PVR LIMITED............................................................................................................................................................ 211
GG. SAHARA ONE MEDIA & ENTERTAINMENT ............................................................................................................. 216
HH. SANDESH ............................................................................................................................................................ 220
II. SAREGAMA ............................................................................................................................................................... 223
JJ. SHRINGAR CINEMAS ................................................................................................................................................. 227
KK. SONY ENTERTAINMENT TELEVISION ......................................................................................................................... 229
LL. STAR TV (NEWS CORPORATION) .............................................................................................................................. 231
MM. SUN TV .............................................................................................................................................................. 234
NN. TATA SKY ........................................................................................................................................................... 239
OO. TEJ BANDHU GROUP........................................................................................................................................... 240
PP. TV TODAY ................................................................................................................................................................ 241
QQ. TELEVISION EIGHTEEN ........................................................................................................................................ 244
RR. UTV SOFTWARE COMMUNICATIONS.................................................................................................................... 248
SS. WIRE AND WIRELESS INDIA ...................................................................................................................................... 253
TT. ZEE ENTERTAINMENT ............................................................................................................................................... 254
UU. ZEE NEWS .......................................................................................................................................................... 257
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Table of figures
Figure 1) Sector drivers for the Indian media market ........................................................................................................ 19 Figure 2) Performance of the Indian stock market ............................................................................................................ 20 Figure 3) Growth in international trade .............................................................................................................................. 21 Figure 4) Trend in Indian Rupee:US$ exchange rate ....................................................................................................... 21 Figure 5) Adspend analysis for key emerging economies ................................................................................................ 22 Figure 6) Indian media market, growth forecast (2007 – 2012) ........................................................................................ 23 Figure 7) Indian media market, chart (2007 – 2012) ......................................................................................................... 23 Figure 8) Indian adspend, growth forecast (2007 – 2012) ................................................................................................ 24 Figure 9) Indian television, growth forecast (2007 – 2012) ............................................................................................... 24 Figure 10) Indian newspapers, growth forecast (2007 – 2012)..................................................................................... 25 Figure 11) Indian consumer magazines, growth forecast (2007 – 2012) ..................................................................... 25 Figure 12) Indian online media, growth forecast (2007 – 2012).................................................................................... 25 Figure 13) Indian other media, growth forecast (2007 – 2012) ..................................................................................... 26 Figure 14) Indian business media, growth forecast (2007 – 2012) ............................................................................... 26 Figure 15) Indian film and music market, growth forecast (2007 – 2012)..................................................................... 27 Figure 16) Sector positives and risks matrix .................................................................................................................. 28 Figure 17) Adspend growth drivers ................................................................................................................................ 29 Figure 18) Recent private equity investments................................................................................................................ 30 Figure 19) Recent IPOs .................................................................................................................................................. 31 Figure 20) Major acquisitions and investments by media companies........................................................................... 32 Figure 21) Major acquisitions and investments by financial investors .......................................................................... 36 Figure 22) Development of the Indian media market .................................................................................................... 40 Figure 23) Indian media market, revenues .................................................................................................................... 41 Figure 24) Share of revenues by type ............................................................................................................................ 41 Figure 25) Reach of various media ................................................................................................................................ 44 Figure 26) Indian Adspend ............................................................................................................................................. 46 Figure 27) % Adspend by media type ............................................................................................................................ 46 Figure 28) % growth in adspend (1994 - 2008) ............................................................................................................. 47 Figure 29) Adspend, CAGR historic growth ................................................................................................................... 47 Figure 30) Adspend – leading categories of advertisers ............................................................................................... 48 Figure 31) Adspend – leading advertisers ..................................................................................................................... 48 Figure 32) Adspend growth prospects ........................................................................................................................... 49 Figure 33) Major players by sector ................................................................................................................................. 50 Figure 34) Foreign investment rules in media................................................................................................................ 53 Figure 35) Number of active Internet users ................................................................................................................... 54 Figure 36) Internet subscribers ....................................................................................................................................... 54 Figure 37) Internet subscription pricing .......................................................................................................................... 55 Figure 38) Key statistics, telecoms market .................................................................................................................... 57 Figure 39) Major fixed line telecoms operators .............................................................................................................. 57 Figure 40) Market shares of GSM operators ................................................................................................................. 58
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Figure 41) Growth in number of mobile subscribers ...................................................................................................... 58 Figure 42) Major mobile telecoms operators ................................................................................................................. 60 Figure 43) Major PCO operators .................................................................................................................................... 61 Figure 44) Key statistics on the BRIC economies ......................................................................................................... 63 Figure 45) Map of India, Major cities .............................................................................................................................. 64 Figure 46) Map of India, States by language ................................................................................................................. 64 Figure 47) Key macro-economic indicators ................................................................................................................... 65 Figure 48) Foreign direct investment by sector (1991-2004) ........................................................................................ 66 Figure 49) Population analysis ....................................................................................................................................... 67 Figure 50) Labour force statistics ................................................................................................................................... 67 Figure 51) Labour force by sector (2001)....................................................................................................................... 67 Figure 52) Regional GDP per capita and population analysis ...................................................................................... 68 Figure 53) Adult population by economic status ............................................................................................................ 69 Figure 54) Population by primary language ................................................................................................................... 70 Figure 55) Population and literacy levels for major states ............................................................................................. 70 Figure 56) Number of major cities by population (2001) ............................................................................................... 71 Figure 57) Major urban centres of population ................................................................................................................ 71 Figure 58) Forecast growth in key consumer categories .............................................................................................. 72 Figure 59) Television market statistics ........................................................................................................................... 74 Figure 60) Television market revenues .......................................................................................................................... 74 Figure 61) Major broadcasters ....................................................................................................................................... 75 Figure 62) Television market structure by channel type ................................................................................................ 75 Figure 63) GRPs of major commercial broadcasters .................................................................................................... 76 Figure 64) Audience shares for leading regional channels ........................................................................................... 77 Figure 65) Audience shares for news channels ............................................................................................................. 78 Figure 66) Structure of cable market .............................................................................................................................. 79 Figure 67) Major cable operators ................................................................................................................................... 80 Figure 68) DTH platforms ............................................................................................................................................... 81 Figure 69) Key foreign direct investment rules .............................................................................................................. 81 Figure 70) Key foreign investments in television ........................................................................................................... 82 Figure 71) Estimated newspaper adspend .................................................................................................................... 83 Figure 72) Newspaper adspend by type (2006) ............................................................................................................ 84 Figure 73) Weekly reach of newspapers ........................................................................................................................ 84 Figure 74) Circulation growth (1996 – 2005) ................................................................................................................. 86 Figure 75) Readership of leading newspapers .............................................................................................................. 86 Figure 76) Market shares by newspaper language ....................................................................................................... 87 Figure 77) Key foreign investments in newspapers ....................................................................................................... 87 Figure 78) Phase II licencees ......................................................................................................................................... 89 Figure 79) Twenty largest licence bids (Phase II) .......................................................................................................... 90 Figure 80) Radio reach, Mumbai (Wave 2, 2006) .......................................................................................................... 91 Figure 81) Radio reach, Delhi (Wave 2, 2006) .............................................................................................................. 92 Figure 82) Radio reach, Kolkata (Wave 2, 2006) .......................................................................................................... 92 Figure 83) Key investments in radio ............................................................................................................................... 93
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Figure 84) Readership of leading consumer magazines ............................................................................................... 94 Figure 85) Key foreign investments in consumer magazines ....................................................................................... 95 Figure 86) Recent foreign magazine launches .............................................................................................................. 95 Figure 87) Business magazines published by domestic publishers .............................................................................. 97 Figure 88) India strategies of leading business and professional publishers ............................................................... 98 Figure 89) Key foreign investments in business publishing .......................................................................................... 98 Figure 90) Key foreign investments in outdoor advertising ......................................................................................... 100 Figure 91) Key statistics on Indian filmed entertainment ............................................................................................. 101 Figure 92) Key statistics on Indian filmed entertainment ............................................................................................. 102 Figure 93) Investments by Holllywood studios............................................................................................................. 103 Figure 94) Online media advertising revenues ............................................................................................................ 107 Figure 95) Online media revenues by type (2006) ...................................................................................................... 108 Figure 96) Growth in Internet penetration .................................................................................................................... 108 Figure 97) Major domestic players ............................................................................................................................... 109 Figure 98) Foreign entrants .......................................................................................................................................... 109 Figure 99) Key foreign investments in the Internet sector ........................................................................................... 110 Figure 100) Leading Indian advertising agencies .......................................................................................................... 111 Figure 101) Recent foreign investments in marketing services .................................................................................... 112 Figure 102) Adlabs Films, summary financials .............................................................................................................. 114 Figure 103) Adlabs Films, key shareholdings ................................................................................................................ 116 Figure 104) Adlabs Films, key management and directors ........................................................................................... 116 Figure 105) Adlabs Films, financials .............................................................................................................................. 117 Figure 106) Adlabs Films, Segment analysis ................................................................................................................. 117 Figure 107) ABP, key publications ................................................................................................................................. 118 Figure 108) ABP, key management and directors ......................................................................................................... 119 Figure 109) Balaji Telefilms, summary financials .......................................................................................................... 120 Figure 110) Balaji Telefilms, key shareholdings ............................................................................................................ 121 Figure 111) Balaji Telefilms, key management .............................................................................................................. 122 Figure 112) Balaji Telefilms, financials ........................................................................................................................... 123 Figure 113) Business Standard, summary financials .................................................................................................... 124 Figure 114) Business Standard, key shareholders ....................................................................................................... 125 Figure 115) Business Standard, key management and directors ................................................................................. 125 Figure 116) Cybermedia, summary financials ............................................................................................................... 126 Figure 117) Cybermedia, key magazine titles ................................................................................................................ 127 Figure 118) Cybermedia, financials ................................................................................................................................ 129 Figure 119) Cybermedia, segment analysis .................................................................................................................. 129 Figure 120) Cybermedia, largest shareholders.............................................................................................................. 130 Figure 121) Cybermedia, key management ................................................................................................................... 130 Figure 122) Dainik Bhaskar, key management .............................................................................................................. 131 Figure 123) Deccan Chronicle, summary financials ...................................................................................................... 132 Figure 124) Deccan Chronicle, financials ...................................................................................................................... 134 Figure 125) Deccan Chronicle, Key acquisitions ........................................................................................................... 134 Figure 126) Deccan Chronicle, key management and directors ................................................................................... 135
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Figure 127) Deccan Chronicle, key shareholdings ........................................................................................................ 135 Figure 128) Dish TV, summary financials ...................................................................................................................... 136 Figure 129) Eenadu group, periodicals .......................................................................................................................... 137 Figure 130) Eenadu group, key management ............................................................................................................... 138 Figure 131) Entertainment Network, summary financials .............................................................................................. 139 Figure 132) Entertainment Network, radio stations ....................................................................................................... 140 Figure 133) Entertainment Network, Outdoor advertising space .................................................................................. 141 Figure 134) Entertainment Network, financials .............................................................................................................. 142 Figure 135) Entertainment Network, segment analysis ................................................................................................. 142 Figure 136) Entertainment Network, key transactions ................................................................................................... 142 Figure 137) Entertainment Network, key management and directors ........................................................................... 143 Figure 138) Entertainment Network, key shareholdings ................................................................................................ 143 Figure 139) ETC Networks, summary financials............................................................................................................ 144 Figure 140) ETC Networks, channels ............................................................................................................................ 145 Figure 141) ETC Networks, financials ............................................................................................................................ 145 Figure 142) ETC Networks, key management and directors ........................................................................................ 146 Figure 143) ETC Networks, key shareholdings ............................................................................................................. 146 Figure 144) Hathway cable, summary financials ........................................................................................................... 147 Figure 145) Hathway cable, channels ............................................................................................................................ 148 Figure 146) Hathway cable, key management and directors ........................................................................................ 149 Figure 147) Hathway cable, largest shareholders ......................................................................................................... 149 Figure 148) HT Media, summary financials ................................................................................................................... 150 Figure 149) HT Media, Newspaper readership .............................................................................................................. 152 Figure 150) HT Media, Periodicals ................................................................................................................................. 152 Figure 151) HT Media, financials .................................................................................................................................... 153 Figure 152) HT Media, segment analysis ...................................................................................................................... 153 Figure 153) HT Media, key management and directors ................................................................................................ 154 Figure 154) HT Media, key shareholdings ..................................................................................................................... 154 Figure 155) Living Media. summary financials ............................................................................................................... 155 Figure 156) India Today, key magazine titles ................................................................................................................ 156 Figure 157) India Today, financials ................................................................................................................................ 157 Figure 158) India Today, key transactions ..................................................................................................................... 157 Figure 159) India Today, key management ................................................................................................................... 157 Figure 160) Indiacom, key management and directors ................................................................................................. 159 Figure 161) Infomedia India, summary financials .......................................................................................................... 160 Figure 162) Infomedia India, key directory-related products ......................................................................................... 161 Figure 163) Infomedia India, business publications ....................................................................................................... 162 Figure 164) Infomedia India, special interest publications ............................................................................................ 162 Figure 165) Infomedia India, financials .......................................................................................................................... 163 Figure 166) Infomedia India, key management and directors ....................................................................................... 163 Figure 167) Infomedia India, key shareholdings ............................................................................................................ 163 Figure 168) Indian Express Group, summary financials................................................................................................ 164 Figure 169) Indian Express Group, newspapers ........................................................................................................... 165
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Figure 170) Indian Express Group, periodicals.............................................................................................................. 165 Figure 171) Indian Express Group, websites ................................................................................................................. 166 Figure 172) Indian Express Group, financials ................................................................................................................ 166 Figure 173) Indian Express Group, key management and directors ............................................................................ 167 Figure 174) InNetwork Entertainment, summary financials ........................................................................................... 168 Figure 175) InNetwork Entertainment, key management and directors ....................................................................... 169 Figure 176) InNetwork Entertainment, key shareholdings ............................................................................................ 169 Figure 177) Info Edge, summary financials.................................................................................................................... 170 Figure 178) Info Edge, websites ..................................................................................................................................... 171 Figure 179) Info Edge, financials .................................................................................................................................... 171 Figure 180) Info Edge, key management ....................................................................................................................... 172 Figure 181) Info Edge, key shareholdings ..................................................................................................................... 172 Figure 182) Inox Leisure, summary financials ............................................................................................................... 173 Figure 183) Inox Leisure, multplexes ............................................................................................................................. 174 Figure 184) Inox Leisure, key management .................................................................................................................. 174 Figure 185) Jagran Prakashan, summary financials ..................................................................................................... 176 Figure 186) Jagran Prakashan, Periodicals ................................................................................................................... 177 Figure 187) Jagran Prakashan, financials ...................................................................................................................... 178 Figure 188) Jagran Prakashan, segment analysis ........................................................................................................ 178 Figure 189) Jagran Prakashan, key management and directors .................................................................................. 179 Figure 190) Jagran Prakashan, key shareholdings ....................................................................................................... 179 Figure 191) Jasubhai Group, business magazines ....................................................................................................... 180 Figure 192) Jasubhai Group, key management and directors ...................................................................................... 181 Figure 193) K Sera Sera, summary financials ............................................................................................................... 182 Figure 194) K Sera Sera, financials ............................................................................................................................... 184 Figure 195) K Sera Sera, segment analysis .................................................................................................................. 184 Figure 196) K Sera Sera, key management .................................................................................................................. 185 Figure 197) K Sera Sera, key shareholdings ................................................................................................................. 185 Figure 198) Malayala Manorama, summary financials .................................................................................................. 186 Figure 199) Malayala Manorama, Key publications ....................................................................................................... 187 Figure 200) Malayala Manorama, key management and directors ............................................................................... 187 Figure 201) Mid-day Multimedia, summary financials ................................................................................................... 188 Figure 202) Mid-day Multimedia, titles ........................................................................................................................... 189 Figure 203) Mid-day Multimedia, financials.................................................................................................................... 190 Figure 204) Mid-day Multimedia, segment analysis ...................................................................................................... 190 Figure 205) Mid-day Multimedia , key transactions ....................................................................................................... 191 Figure 206) Mid-day Multimedia, key management and directors ................................................................................ 192 Figure 207) Mid-day Multimedia, largest shareholders ................................................................................................. 192 Figure 208) Mukta Arts, summary financials .................................................................................................................. 193 Figure 209) Mukta Arts, financials .................................................................................................................................. 194 Figure 210) Mukta Arts, key transactions ....................................................................................................................... 195 Figure 211) Mukta Arts, key management ..................................................................................................................... 195 Figure 212) NDTV, summary financials ......................................................................................................................... 196
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Figure 213) NDTV, channels .......................................................................................................................................... 197 Figure 214) NDTV, financials .......................................................................................................................................... 198 Figure 215) NDTV , key transactions ............................................................................................................................. 198 Figure 216) NDTV, key management and directors ...................................................................................................... 199 Figure 217) NDTV, key shareholdings ........................................................................................................................... 199 Figure 218) Nimbus Communications, key management ............................................................................................. 201 Figure 219) Padmalaya Telefilms. summary financials ................................................................................................. 202 Figure 220) Padmalaya Telefilms, key management and directors .............................................................................. 204 Figure 221) Padmalaya Telefilms, key shareholdings ................................................................................................... 204 Figure 222) Prasar Bharti, summary financials .............................................................................................................. 205 Figure 223) Doordarshan, main channels ...................................................................................................................... 206 Figure 224) All India Radio, channels ............................................................................................................................ 206 Figure 225) Prasar Bharti, financials .............................................................................................................................. 207 Figure 226) Prasar Bharti, key management and directors ........................................................................................... 207 Figure 227) Pritish Nandy Communications, summary financials ................................................................................. 208 Figure 228) Pritish Nandy Communications, financials ................................................................................................. 209 Figure 229) Pritish Nandy Communications, key management .................................................................................... 210 Figure 230) PVR Limited, summary financials ............................................................................................................... 211 Figure 231) PVR Limited, multiplexes ............................................................................................................................ 213 Figure 232) PVR Limited, financials ............................................................................................................................... 214 Figure 233) PVR Limited, segment analysis .................................................................................................................. 214 Figure 234) PVR Limited , key transactions ................................................................................................................... 215 Figure 235) PVR Limited, key management and directors ............................................................................................ 215 Figure 236) PVR Limited, key shareholdings ................................................................................................................. 215 Figure 237) Sahara One Media & Entertainment, summary financials ......................................................................... 216 Figure 238) Sahara One Media & Entertainment, channels.......................................................................................... 217 Figure 239) Sahara One Media & Entertainment, publications ..................................................................................... 218 Figure 240) Sahara One Media & Entertainment, financials ......................................................................................... 218 Figure 241) Sahara One Media & Entertainment, segment analysis ............................................................................ 219 Figure 242) Sahara One Media & Entertainment, key management ............................................................................ 219 Figure 243) Sahara One Media & Entertainment, key shareholdings........................................................................... 219 Figure 244) Sandesh, summary financials ..................................................................................................................... 220 Figure 245) Sandesh, periodicals ................................................................................................................................... 221 Figure 246) Sandesh, financials ..................................................................................................................................... 221 Figure 247) Sandesh, key management and directors .................................................................................................. 222 Figure 248) Saregama, summary financials .................................................................................................................. 223 Figure 249) Saregama, financials................................................................................................................................... 225 Figure 250) Saregama, segment analysis ..................................................................................................................... 225 Figure 251) Saregama , key transactions ...................................................................................................................... 225 Figure 252) Saregama, key management and directors ............................................................................................... 226 Figure 253) Saregama, key shareholdings .................................................................................................................... 226 Figure 254) Shringar Cinemas, summary financials ...................................................................................................... 227 Figure 255) Shringar Cinemas, Current multiplexes...................................................................................................... 228
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Figure 256) Shringar Cinemas, key management and directors ................................................................................... 228 Figure 257) Shringar Cinemas, key shareholdings ........................................................................................................ 228 Figure 258) Sony Entertainment Television, television channels.................................................................................. 229 Figure 259) Sony Entertainment Television, key management .................................................................................... 230 Figure 260) Sony Entertainment Television, key shareholdings ................................................................................... 230 Figure 261) Star TV, television channels ....................................................................................................................... 232 Figure 262) Sun TV, summary financials ....................................................................................................................... 234 Figure 263) Sun TV, television channels ....................................................................................................................... 235 Figure 264) Sun TV, radio stations ................................................................................................................................. 236 Figure 265) Sun TV, financials ....................................................................................................................................... 237 Figure 266) Sun TV, segment analysis .......................................................................................................................... 237 Figure 267) Sun TV, key management and directors .................................................................................................... 238 Figure 268) Sun TV, key shareholdings ......................................................................................................................... 238 Figure 269) Tata Sky, key management and directors .................................................................................................. 239 Figure 270) Tata Sky, Shareholders .............................................................................................................................. 239 Figure 271) Tej Bandhu Group, activities ....................................................................................................................... 240 Figure 272) Tej Bandhu Group, key management and directors .................................................................................. 240 Figure 273) TV Today, summary financials .................................................................................................................. 241 Figure 274) TV Today, channels .................................................................................................................................... 242 Figure 275) TV Today , financials................................................................................................................................... 243 Figure 276) TV Today, key management ....................................................................................................................... 243 Figure 277) TV Today, key shareholdings ..................................................................................................................... 243 Figure 278) Television Eighteen, summary financials ................................................................................................... 244 Figure 279) Television Eighteen, channels .................................................................................................................... 245 Figure 280) Television Eighteen, digital media .............................................................................................................. 246 Figure 281) Television Eighteen, financials ................................................................................................................... 246 Figure 282) Television Eighteen, key transactions ........................................................................................................ 247 Figure 283) Television Eighteen, key management ...................................................................................................... 247 Figure 284) UTV, summary financials ............................................................................................................................ 248 Figure 285) UTV, financials ............................................................................................................................................ 250 Figure 286) UTV, segment analysis ............................................................................................................................... 250 Figure 287) UTV , key transactions ................................................................................................................................ 251 Figure 288) UTV, key management ............................................................................................................................... 252 Figure 289) UTV, largest shareholders .......................................................................................................................... 252 Figure 290) Wire and Wireless India, summary financials ............................................................................................ 253 Figure 291) Zee Telefilms Group, structure ................................................................................................................... 254 Figure 292) Zee Entertainment, channels ...................................................................................................................... 255 Figure 293) Zee Entertainment, overseas reach ........................................................................................................... 256 Figure 294) Zee Entertainment, summary financials ..................................................................................................... 256 Figure 295) Zee Entertainment, key management and directors .................................................................................. 256 Figure 296) Zee News, channels .................................................................................................................................... 257 Figure 297) Zee News, summary financials ................................................................................................................... 258 Figure 298) Zee News, key management ...................................................................................................................... 258
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I) CURRENT TRENDS
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Five trends for 2007
���� Competition in the Pay TV market
Competition for subscribers between cable and DTH and also amongst DTH operators is increasing. 2007 may see the launch of two new DTH services (from Reliance and Sun TV), bringing the total to four. The battle is largely being fought on the basis of price and not on content.
Major listed companies: Dish TV
Hathway cable
Sun TV
Wire & Wireless India
���� Rollout of new multiplexes
The boom in new multiplex construction is being slowed down by delays in the construction of new shopping malls and other regulatory issues. However, the planned build of almost 600 new screens across 44 cities (over the next 3 years) may lead to overcapacity in some areas – occupancy rates have already fallen from 50% to approximately 35%.
Major listed companies: Adlabs
PVR
Inox Leisure
Shringar
���� Newspaper market – new launches
The year began with the launch of HT Media’s new business daily, Mint. This title has entered an already crowded business newspaper market. Across the sector, double digit growth in adspend is encouraging publishers to launch new titles and expand geographically. This is leading to very significant price competition in major cities (especially among English language titles). Local language titles continue to have the best growth prospects.
Major listed companies: HT Media
Jagran Prakashan
Deccan Chronicle
���� Expansion in radio
The successful licencing of over 240 new radio stations in 2006 has led to an enormous increase in the number of stations coming on air. In 2007, the sector is likely to see increased competition for audiences, but will also capture a greater share of advertising budgets. There is also likely to be some consolidation in the sector and more foreign investment.
Major listed companies: Adlabs
Entertainment Network
Sun TV
����Internet growth
The online media sector should continue to experience strong growth in both reach and revenues. Broadband’s share of the market will grow from its current 20%.
Major listed companies: Info Edge
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Sector-specific factors
Sector Sector positives Sector risks
Free to air television
� Increase in TV penetration driving growth in adspend
� Channels may lose audiences to premium content Pay TV channels
Pay TV � DTH and rollout of conditional access in cable leading to substantial growth in subscription revenues
� Significant price competition could lead to heavy losses for industry, especially the weaker players
Broadcast content � Increased demand for quality content from channel operators
� Few risks due to strong demand for content from all broadcasters
Filmed entertainment
� Growth in multiplexes (higher ticket prices and greater transparency) and overseas revenues
� Increased revenues from Pay TV operators for film rights
� Cinemas: There is the possibility of a shakeout due to ‘over capacity’
Music � Non-film music will exhibit strong growth
� Digital music presents many new revenue streams
� Piracy a significant issue with both analogue and digital music
Internet � Strong growth in reach, usage and revenues
� Growth in Broadband roll-out is quite slow and may hold back development of the sector.
Radio � Second phase of FM licencing was successful
� Will capture increased share of advertising
� Intense competition for audiences and advertising. Weaker players will suffer in the long term
Newspapers � Very competitive in major cities, but increasing literacy and strong growth in adspend should benefit the sector
� Highest growth is in local language titles
� Long term structural impact of Internet will be negative for newspapers
Classified directories
� Growth in SME sector and private consumption drives adspend growth
� Regulatory clarity for telephone directories could also aid growth
� Long term structural impact of Internet will be negative for print directories
Consumer magazines
� Circulation growth is strong, but readership appears to be declining; rapidly growing number of foreign titles should help grow the market (revenue and circulation)
� Longer term impact of Internet on readership and display advertising
Business publishing
� Increased demand for business information from emerging industry sectors
� Longer term impact of Internet on readership of print titles
Marketing services � Benefit from increased adspend and marketing budgets
� Low profitability due to heavy price competition
Outdoor advertising � Enhanced transport infrastructure (metro, roads and airports) offers new opportunities.
� Prices are currently very high and may see a significant decrease as new capacity comes onstream
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Sector background – growth and reach
���� Growth in Indian adspend (98 – 2008)
���� Media reach (2005, 2006)
-
1,000
2,000
3,000
4,000
5,000
6,000
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Tot
al a
dspe
nd (
US
$ m
n)
-30%
-20%
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0%
10%
20%
30%
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75
7.2
23
51
76
222230
68
9.4
25
39
119
0
50
100
150
200
250
Dailynew spapers
Cab & SatTelevision
(Wkly reach)
Magazines(Wkly reach)
Internet (Mthlyreach)
Cinema - urban Cinema - total FM Radio
No.
of u
sers
(m
illio
ns)
2005 2006
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Forecast for 2007 - 2012
���� 2006 Revenues
Rs millions (2006) Revenues
Television 152,238 Newspapers 87,503 Magazines 10,553 Radio 4,280 Outdoor 10,316 Online 1,598 Cinema advertising 1,595 Directories 2,500 Business media 4,500 Filmed entertainment 58,500 Music 10,000 Total 343,581
���� Indian media market – Revenues (2006 - 2012)
���� Indian media market – Adspend (2006 - 2012)
343,581
415,382480,972
553,991
693,873
766,128
621,776
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2006 2007 2008 2009 2010 2011 2012
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159,640178,800
200,357223,108
272,577
299,266
247,303
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2006 2007 2008 2009 2010 2011 2012
Ads
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7%
8%
9%
10%
11%
12%
13%
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Total adspend % change
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II) INVESTMENT THESIS
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A.Investment case
The fundamental growth prospects for the Indian economy are extremely strong. The country is achieving GDP growth in the region of 9% p.a. (eighteen months to December 2006) and the government is continuing with a programme of economic liberalisation. However, there is also strong evidence that the economic reform programme may not be sufficiently radical to remove the three major bottle necks which hold back development, i.e. poor infrastructure, power shortages and bureaucracy.
From the perspective of potential investors in the media sector, there is compelling evidence to conclude that the sector presents many exciting growth opportunities in the medium to long term. Some basic analysis of key sector measures (media reach, adspend, Internet penetration, cinema screens), illustrates that virtually all segments of the Indian media sector are likely to achieve strong growth.
Figure 1) Sector drivers for the Indian media marke t
Here we will assess the investment case for the media sector through an analysis of the wider economic and demographic evidence, sector-specific factors and then an analysis of growth prospects for each segment of the media industry.
Sector driversSector drivers
DemographicDemographic
EconomicEconomic
CorporateCorporate
TechnologyTechnology
� Growing literacy
� Urbanisation (easier access to media in cities)
� Growing individual prosperity (equity and real estate boom) means private consumption and media spend grow
� Growth in size of middle class
� Growth in size of private sector
� Greater investment in product development
� Increase in marketing spend because of new product launches and increased competition
� New technology ‘eliminating’ traditional bottlenecks (e.g. mobile telecoms, DTH)
� Technology is lowering cost to consumers (helping media expand into rural areas) and advertisers
Sector driversSector drivers
DemographicDemographic
EconomicEconomic
CorporateCorporate
TechnologyTechnology
� Growing literacy
� Urbanisation (easier access to media in cities)
� Growing individual prosperity (equity and real estate boom) means private consumption and media spend grow
� Growth in size of middle class
� Growth in size of private sector
� Greater investment in product development
� Increase in marketing spend because of new product launches and increased competition
� New technology ‘eliminating’ traditional bottlenecks (e.g. mobile telecoms, DTH)
� Technology is lowering cost to consumers (helping media expand into rural areas) and advertisers
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Economic and demographic factors
Since the launch of India’s economic reform programme in the early 1990s, the Indian economy has made great progress in accelerating economic growth and opening up to global markets. This growth has helped create a new sense of economic prosperity among India’s large middle class.
Strong sustained, economic growth
GDP growth has been amongst the highest of the major world economies at nearly 6% p.a. (growth in the manufacturing sector was nearer 10%). In the year to March 2007, the economy is expected to grow by 9.2% with the services sector achieving 11.2% and the manufactruing sector, 11.3%; agriculture will grow at 2.7%. The government has set a long term target of 10% annual GDP growth.
Growth in property and equity prices
Both property and equities have increased strongly in the last five years. This has enormously benefited the middle classes. The growth has been driven by increased disposal income and easier access to residential mortgages.
Figure 2) Performance of the Indian stock market
BSE Sensex Dow Jones IA FTSE 100
Increasing globalisation
The economy has become increasing integrated into the global economy with the growth of India’s export-driven IT services industry at the forefront. India’s services exports grew at a CAGR of 17.3% in the 1990s (compared to China’s growth of 15.8% and a world average of 5.6%).1 This has also led to significant growth in foreign direct investment (though the absolute value is still low when compared to countries such as China).
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Figure 3) Growth in international trade
% growth 2005 2006 2007 2008 2009 2010
Exports of goods & services 22.3 18.4 14.6 13.3 12.1 12.2
Imports of goods & services 19 13.3 11.8 12.2 12.7 12.7
Robust financial infrastructure
India’s financial markets and institutions are well developed and efficient and there is a strong corporate governance and legal infrastructure (historically based on the English system). With respect to media companies, there are approximately 60 media companies listed on the major national stock exchanges.
Stable currency
The Indian currency has maintained a good level of stability (broadly in the Rs 45 – Rs 50 per US$ range over the last five years).
Figure 4) Trend in Indian Rupee:US$ exchange rate
Reform-driven political agenda
All of India’s major political parties have committed themselves to a focus on maintaining rapid economic growth and attracting foreign investment.
Indian diaspora is an important network
The Indian diaspora of 20 million (largely in UK, USA, Canada and South Africa) plays an important role in encouraging economic development and further liberalisation and channeling foreign investment.
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Sector-specific factors
We believe that the Indian media sector will grow at a high rate driven primarily by strong economic growth, increasing personal consumption and leisure spend and to some extent market deregulation. The ‘growth opportunity’ compared to similar-sized economies is significant; on an adspend per capita basis, Indian adspend is considerably lower than China.
Figure 5) Adspend analysis for key emerging economi es2
Growth in the media sector will also be driven by other demographic and technology-related factors.
Improving literacy
India’s literacy rate of 71% is growing rapidly but is still well below developed economies. This should benefit the publishing sector where reach of media such as newspapers and magazines is still well below the levels in countries such as China.
Increasing number of content “access points”
Indian consumers can access media content through an increasing number of places; these include a growing number of cinema multiplexes (which are increasing the number of family visits), increased penetration of broadband Internet and mobile services and the launch of DTH services with over a 100 channels. This growth will increase demand for media content in a range of different formats.
Substantial improvements in communications infrastr ucture
India’s digital infrastructure is also improving with strong growth in penetration and quality of Internet and mobile services.
India
China
BrazilRussia
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Ads
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B. Growth forecast (2007 – 2012)
This is Heernet ventures’ 5 year revenue forecast for the Indian media market. The forecast is based on our analysis of a wide range of quantitative economic and sector drivers and various qualitative factors which may also impact growth over the forecast period.
Figure 6) Indian media market, growth forecast (200 7 – 2012)
Rs millions 2007 2008 2009 2010 2011 2012 CAGR
Media market revenues 415,382 480,972 553,991 621,776 693,873 766,128 13.0%
US$ millions 9,231 10,688 12,311 13,817 15,419 17,025
% Change 20.9% 15.8% 15.2% 12.2% 11.6% 10.4%
Figure 7) Indian media market, chart (2007 – 2012)
343,581
415,382
480,972
553,991
693,873
766,128
621,776
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100,000
200,000
300,000
400,000
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2006 2007 2008 2009 2010 2011 2012
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Figure 8) Indian adspend, growth forecast (2007 – 2 012)
Figure 9) Indian television, growth forecast (2007 – 2012)
Rs millions 2007 2008 2009 2010 2011 2012 CAGR
No. of TV HHs 121 132 144 155 168 179 8.2% No. of Cable TV HHs 63.0 66.2 69.5 72.9 76.6 80.4 5.0% No. of DTH HHs - FTA 4.73 6.10 7.74 9.68 11.32 12.45 21.4% No. of DTH HHs - Pay 2.74 3.58 4.52 5.42 6.37 7.00 20.7% No. of DTH HHs - Total 7.46 9.68 12.26 15.10 17.69 19.46 21.1% % growth: No. of TV HHs 10.0% 9.0% 9.0% 8.0% 8.0% 7.0% No. of Cable TV HHs 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% No. of DTH HHs - FTA 35.0% 29.0% 27.0% 25.0% 17.0% 10.0% No. of DTH HHs - Pay 44.0% 31.0% 26.0% 20.0% 17.5% 10.0% Subscription revenues Cable TV HHs 123,420 150,355 181,138 204,944 231,401 258,364 15.9% DTH HHs - Pay 8,044 11,613 16,258 20,810 24,987 27,737 28.1% Total 131,464 161,967 197,395 225,754 256,387 286,101 16.8% % growth: Advertising 9.5% 9.5% 8.5% 9.2% 9.0% 8.5% Subscription 46% 23% 22% 14% 14% 12% Advertising 68,151 74,625 80,968 88,417 96,375 104,566 8.9% Subscription 131,464 161,967 197,395 225,754 256,387 286,101 16.8% Total Television Revenues 199,614 236,592 278,364 314,171 352,762 39 0,668 14.4% % Change 31.1% 18.5% 17.7% 12.9% 12.3% 10.7%
159,640178,800
200,357223,108
272,577
299,266
247,303
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100,000
150,000
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250,000
300,000
350,000
2006 2007 2008 2009 2010 2011 2012
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Figure 10) Indian newspapers, growth forecast (2007 – 2012)
Rs millions 2007 2008 2009 2010 2011 2012 CAGR
% growth Display 13.3% 13.1% 12.6% 11.5% 10.9% 10.4% Classified 15.2% 15.6% 14.5% 12.6% 10.5% 10.5% Cover price 6.5% 6.5% 6.5% 7.0% 7.5% 7.0% Display 63,218 71,499 80,508 89,767 99,551 109,905 11.7% Classified 11,343 13,113 15,014 16,906 18,681 20,642 12.7% Total Advertising 74,561 84,612 95,522 106,673 118,232 130,547 11.9% Cover price 23,280 24,793 26,405 28,253 30,372 32,498 6.9% Total Newspaper Revenues 97,841 109,405 121,927 134,926 148,605 163,045 10.8% % Change 11.8% 11.8% 11.4% 10.7% 10.1% 9.7%
Figure 11) Indian consumer magazines, growth foreca st (2007 – 2012)
Rs millions 2007 2008 2009 2010 2011 2012 CAGR
% growth Advertising 10% 10% 11% 9% 8% 7% Cover price 5% 6% 6% 6% 6% 6% Advertising 9,673 10,641 11,811 12,874 13,904 14,877 9.0% Cover price 1,847 1,958 2,075 2,199 2,331 2,471 6.0% Total Consumer Magazines Revenues 11,520 12,598 13,886 15,074 16,236 17,349 8.5% % Change 9.2% 9.4% 10.2% 8.6% 7.7% 6.9%
Figure 12) Indian online media, growth forecast (20 07 – 2012)
Rs millions 2007 2008 2009 2010 2011 2012 CAGR
% growth Advertising 35% 35% 30% 30% 27% 25% Subscription 20% 20% 15% 15% 15% 15% Advertising 2,126 2,870 3,732 4,851 6,161 7,701 29.4% Subscription 27 32 37 43 49 57 16.0% Total Online Revenues 2,153 2,903 3,769 4,894 6,210 7,758 29.2% % Change 34.8% 34.8% 29.8% 29.9% 26.9% 24.9%
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Figure 13) Indian other media, growth forecast (200 7 – 2012)
Rs millions 2007 2008 2009 2010 2011 2012 CAGR
RADIO % growth 30% 25% 20% 16% 15% 15% Total Radio Revenues 5,563 6,954 8,345 9,680 11,132 12,802 18.1% % Change 30.0% 25.0% 20.0% 16.0% 15.0% 15.0% OUTDOOR % growth 5% 6% 6% 6% 6% 6% Total Outdoor Revenues 10,831 11,481 12,170 12,900 13,674 14,495 6.0% % Change 5.0% 6.0% 6.0% 6.0% 6.0% 6.0% CINEMA ADVERTISING % growth 20% 20% 17% 15% 10% 9% Total Cinema Advertising Revenues 1,914 2,297 2,687 3,090 3,399 3,705 14.1% % Change 20.0% 20.0% 17.0% 15.0% 10.0% 9.0% DIRECTORIES % growth 15% 15% 15% 12% 10% 9% Total Directories Revenues 2,875 3,306 3,802 4,258 4,684 5,106 12.2% % Change 15.0% 15.0% 15.0% 12.0% 10.0% 9.0%
Figure 14) Indian business media, growth forecast ( 2007 – 2012)
Rs millions 2007 2008 2009 2010 2011 2012 CAGR
% growth Advertising 15% 15% 14% 12% 10% 9% Cover price 16% 15% 15% 13% 12% 10% Exhibitions 10% 9% 9% 8% 7% 6% Advertising 3,105 3,571 4,071 4,559 5,015 5,466 12.0% Cover price 1,566 1,801 2,071 2,340 2,621 2,883 13.0% Exhibitions 495 540 588 635 680 720 7.8% Total business media revenues 5,166 5,911 6,730 7,535 8,316 9,070 11.9%
14.8
% 14.4% 13.8% 12.0% 10.4% 9.1%
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Figure 15) Indian film and music market, growth for ecast (2007 – 2012)
Rs millions 2007 2008 2009 2010 2011 2012 CAGR
FILM
% growth 17.0% 17.5% 16.5% 14.5% 13.5% 11.5% Total Film Revenues 68,445 80,423 93,693 107,278 121,761 135,763 14.7% % Change 17.0% 17.5% 16.5% 14.5% 13.5% 11.5% MUSIC
% growth Analogue -6% -5% -7% -10% -15% -17% Digital 110% 105% 65% 50% 45% 45% Analogue 9353 8,885 8,263 7,437 6,321 5,247 -10.9% Digital 105 215 355 533 772 1,120 60.6% Total Music Revenues 9,458 9,101 8,619 7,970 7,094 6,367 -7.6% % Change -5.4% -3.8% -5.3% -7.5% -11.0% -10.2%
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Sector analysis
Figure 16) Sector positives and risks matrix
Sector Key sector positives Key sector risks
Free to air television
� Increase in TV penetration driving growth in adspend
� Channels may lose audiences to premium content Pay TV channels
Pay TV � DTH and rollout of conditional access in cable leading to substantial growth in subscription revenues
� Significant price competition could lead to heavy losses for industry, especially the weaker players
Broadcast content
� Increased demand for quality content from channel operators
� Few risks due to strong demand for content from all broadcasters
Filmed entertainment
� Growth in multiplexes (higher ticket prices and greater transparency) and overseas revenues
� Increased revenues from Pay TV operators for film rights
� Cinemas: There is the possibility of a shakeout due to ‘over capacity’
Music � Non-film music will exhibit strong growth
� Digital music presents many new revenue streams
� Piracy a significant issue with both analogue and digital music
Internet � Strong growth in reach, usage and revenues
� Growth in Broadband roll-out is quite slow and may hold back development of the sector.
Radio � Second phase of FM licencing was successful
� Will capture increased share of advertising
� Intense competition for audiences and advertising. Weaker players will suffer in the long term
Newspapers � Very competitive in major cities, but increasing literacy and strong growth in adspend should benefit the sector
� Highest growth is in local language titles
� Long term structural impact of Internet will be negative for newspapers
Classified directories
� Growth in SME sector and private consumption drives adspend growth
� Regulatory clarity for telephone directories could also aid growth
� Long term structural impact of Internet will be negative for print directories
Consumer magazines
� Circulation growth is strong, but readership appears to be declining; rapidly growing number of foreign titles should help grow the market (revenue and circulation)
� Longer term impact of Internet on readership and display advertising
Business publishing
� Increased demand for business information from emerging industry sectors
� Longer term impact of Internet on readership of print titles
Marketing services
� Benefit from increased adspend and marketing budgets
� Low profitability due to heavy price competition
Outdoor advertising
� Enhanced transport infrastructure (metro, roads and airports) offers new opportunities.
� Prices are currently very high and may see a significant decrease as new capacity comes onstream
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Figure 17) Adspend growth drivers
Sector Primary growth drivers
Newspapers � Ongoing growth in readership (6.6% in 2005)
� New classified advertising sectors (e.g. property, automotive)
Consumer magazines � Increasing affluent reader base (attractive to many advertisers)
� New title launches (many foreign titles)
Radio � Growing from a very small base
� Significant number of new station launches
� Increasing number of advertisers allocating adspend budget to radio (especially to national networks)
Television � Ongoing penetration of households (10% p.a. growth)
� But increasing audience fragmentation with growth of DTH and cable TV
Online media � Growing from a very small base
� Strong growth as Internet penetration and usage grows
Business, scientific and academic media
� Growing from a small base
� Economic growth will fuel launches in new sectors (e.g. retail, energy)
Outdoor advertising � Well established medium
� Growth will come from higher rates for premium sites and new contracts for transport networks
Directories � Growing from a small base
� Yellow pages directories are being launched in an increasing number of small cities
Cinema advertising � Driven by growth in affluent audiences visiting multiplexes
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C.Analysis of investment activity
Both media companies and financial investors have been activiely investing in the Indian media market since the mid 1990s. Early investments were limited to the commercial television market, but since 2002, the range and size of deals has broadened significantly. This is due to regulatory liberalisation and the development of new sectors such as radio and online media.
The biggest trend in 2006 has been the huge growth in private equity investment; virtually all of the investment activity in online media has involved private equity and more traditonal media companies see it as an alternative to doing an IPO.
Private equity investment
Investment by domestic private equity funds had been relatively limited with much of their focus on infrastructure-related projects. However, this is changing and funds such as Relaince Capital, IDBI and Matrix Partners have made significant media investments.
Foreign private equity funds have been allowed to operate in India since 1995. Funds which have made substantial investments in India include 3i, Sequoia Capital, Blackstone and KPCB.
Figure 18) Recent private equity investments
Investor Investee Country of investor
Notes
NorthWest Ventures Capital, Reliance Capital and Television Eighteen
Yatra.com India, USA Consideration: Rs 230.7 million
Westbridge Capital Partners, Sequoia Capital
Indiatimes.com USA Acquired 15% stake in the Indiatimes portal (owned by Bennett, Coleman & Co. Ltd)
KPCB, Sherpalo Ventures Cleartrip.com USA Consideration: Rs 138 million
The portal offers hotel and flight bookings in India
KPCB, Sherpalo Ventures InfoEdge USA Consideration: Rs 211 million
InfoEdge operates 99acres.com, jeevansathi.com and naukri.com portals.
3i Nimbus Communications
UK Acquired 33% stake for Rs 2 billion.
Nimbus is a television sports and entertainment production company.
Yahoo, Canaan Partners Bharat Matrimony Group
USA Consideration: Rs 395 million
One of the leading online matrimonial portal.
Blackstone Group Ushodaya Enterprises
USA Consideration: Rs 12.3 billion for 26% stake
The Eenadu Group (active in newspapers, television and film)
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Initial Public Offerings
There have been 13 IPOs by media companies since 2004 and the demand from investors has been very strong (though this has been the case for most Indian IPOs). Many of these companies have a relatively small free float (as most of the equity is still held by the founding entrepreneurs).
Figure 19) Recent IPOs
Company Sector IPO date
2007
Global Broadcast News Ltd News broadcasting Jan-07
2006
Pyramid Saimira Theatre Limited Cinemas Dec-06
Info Edge (India) Ltd. Online media Nov-06
Sun TV Ltd Diversified media Apr-06
K Sera Sera productions ltd Film and television content
Feb-06
Inox Leisure Ltd Cinemas Feb-06
Entertainment Network (India) Limited Radio Jan-06
Jagran Prakashan Limited Newspapers Jan-06
Prior to 2006
PVR Limited Cinemas Dec-05
UTV Software Communications limited Film and television content
Feb-05
HT Media Ltd Newspapers Aug-05
Deccan Chronicle Holdings Limited Newspapers Dec-04
New Delhi Television Limited (NDTV) Broadcasting Apr-04
TV Today Network limited Broadcasting Dec-03
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Figure 20) Major acquisitions and investments by me dia companies
Date Country of investor
Investor Investee Notes
Business media
Jun-04 Switzerland Ringier Infomedia Limited Joint venture to launch new titles in India. New specialist magazine titles to be launched in 2005.
Mar-06 UK United Business Media MediWorld Publications Acquired for Rs 90 million. Medical directory publisher.
Consumer magazines
Oct-03 UK BBC Worldwide Times of India Joint venture called Worldwide Media in which each party has a 50% stake. August 2005: Launch of the BBC title, Top Gear in India.
Nov-03 UK Haymarket publishing Sorabjee Automotive Publishing Acquired 50% stake. SAP is the publisher of Autocar India.
Filmed entertainment and music
Mar-06 India Ideas.com India Private Limited Pritish Nandy Communications Acquired 2.2% stake.
Apr-06 India Zee Telefilms Venus Films & Venus Records Acquired 60% stake.
Internet
May-04 USA Monster Jobsahead Consideration: Rs 400 million.
Jun-04 USA E-bay Baazee.com Consideration: Rs 2.3 billion.
One of the leading online portals offering hotel, airline and car rentals.
Oct-04 India Television Eighteen CommoditiesControl.com Consideration: Rs 13 million.
Commodities information and trading portal
Nov-04 China TOM Online Indiagames.com Consideration: Rs 810 million for 80%. Online and mobile game developer and publisher in India
Jul-05 India Gujarat NRE Coke Steel RX Corporation Delhi based Steel & Metal based portal (www.steelrx.com)
Aug-05 India Television Eighteen CricketNext.com Consideration: Rs 110 million. Portal offers cricket based information and updates.
Nov-05 India Satyam Computer Services Sify.com Consideration: Rs 2,873 million for 31%. Sify India is one of the leading online portal in general genre.
Jan-06 India Sirf Technology Bluetooth Solutions Consideration: Rs 688 million.
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Date Country of investor
Investor Investee Notes
Apr-06 USA IndusLogic Lambent Technologies Consideration: Rs 577 million.
Lambent Technologies is based in Nagpur.
May-06 India VSNL 7 Star Consideration: Rs 70 million. Acquisition of 7 Star's online business.
Jun-06 India ezeego1.com etoursonline.com Online travel
Jun-06 USA Sify Limited Global Travels Consideration: Rs 184 million. Global travels is one of leading player in airlines e-ticketing between India-USA.
Jun-06 India Television Eighteen Jobstreet.com (India) Consideration: Rs 92 million for 50%. Jobstreet.com is listed on MESDAQ stock exchange.
Jul-06 USA Position2 Webshastra Search engine marketing company
Learning
Aug-05 USA TechBooks Maximise Learning Pune based e-learning company.
Marketing services
Jan-05 UK Aegis Percept Group Acquired 51% stake in Percept group offers outdoor advertising services.
Feb-05 USA Omnicom Kidstuff Promotions Acquired by Omnicom’s Indian subsidiary, Mudra Communications
Aug-05 UK WPP (Bates Asia) Enterprise Nexus Consideration: Rs 400 million for 74%.
Nov-05 France Publicis Solutions Integrated Acquired 60% stake
Marketing services
Jan-06 UK WPP (Bates Asia) Sercon Acquired amajority stake Indian marketing services group
Jun-06 UK IMS Group Candid Consideration: Rs 2,300 million for 66%. Indian BTL line
Jun-06 UK M & C Saatchi Dhar & Hoon Marketing services
Jun-06 USA Parexel International Synchron Research Services Indian market research group
Aug-06 Germany Gfk Mode Group Acquired 51% stake Market research services
Dec-06 UK WPP Ray + Kesavan Design agency
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Date Country of investor
Investor Investee Notes
Newspapers
Sep-03 UK Financial Times Business Standard Consideration: Rs 141 million for 13.85%.
Business Standard is a leading English language business newspaper. 14% stake acquired by Pearson (FT’s parent)
Jan-04 USA Dow Jones & Co. Times of India DJ acquired a 26% stake in a joint ventures with Times of India to publish an Indian version of the Wall Street Journal. Deal expired.
Dec-04 UK Independent News and Media (INM)
Jagran Prakashan Publisher of the Hindi language paper, Dainik Jagran. 26% stake acquired by INM
Outdoor advertising
Jul-04 USA Clear Channel Mid-day Outdoors Merger of outdoor advertising operations.
Publishing
Feb-06 India CyberMedia Sx2 Media Labs LLC Consideration: Rs 45 million for 20%. IT periodicals publisher.
Jun-06 India Bennett Coleman & Co Vijayanand Printers Limited Publisher of Vijaya Times in Karnataka State.
Feb-07 India CyberMedia Publication Services of Ill inois Publishing services company
Radio
Jan-06 U.K BBC Worldwide Radio Midday West (India) Consideration: Rs 319 million. Wholly owned subsidiary of Mid Day Multimedia radio operations
Jan-06 India, Malaysia Value Labs, NDTV and Astro Consortium
Today Broadcasting Limited- Living Media
Consideration: Rs 1 billion for 100%.
FM radio operations acquired by consortium lead by Value Labs, Astro (Malaysia) and NDTV.
Television
Sep-00 USA News Corporation (Star TV) Hathway Cable Acquired 26% stake.
Dec-01 USA Time Warner Zee Telefilms Acquired 26% stake in a new channels’ venture with Zee.
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Date Country of investor
Investor Investee Notes
May-02 USA Discovery Communications Sony Entertainment Television Discovery acquired a 26% stake in a new channels’ venture with Sony.
Jan-05 USA News Corporation (Star TV) Balaji Telefilms Acquired 26% stake
Apr-05 UK Reuters Times of India Global Broadcasting Acquired 26% stake.
New English language news channel
Jun-05 USA CNBC Asia Television Eighteen CNBC had 51% stake in news channel joint venture with TV-18 (reduced stake to 10% in 2004)
Jun-05 USA News Corporation (Star TV) UTV Group Acquired 37% stake (exited in 2004)
Feb-06 India Television Eighteen Channel 7 Consideration: Rs 600 million for 50%. Jagran Prakashan diluted stake in television channel.
Feb-06 India Bennett Coleman & Co Sahara One Media & Entertainment Consideration: Rs 378 million for 6%.
Sahara One Media & Entertainment (SOME) has the largest city and regional based Hindi news television channel network; with coverage in 36 areas.
Mar-06 India Nimbus Communications BCCI Cricket rights Consideration: Rs 612 million for 100%. Broadcasting rights acquisition
Mar-06 USA EchoStar Doordarshan Consideration: Rs 284 million for 100%. Broadcasting rights of 4 Doordarshan channels in United States.
Apr-06 India C Sivasankaran Sahara One Media & Entertainment Consideration: Rs 940 million for 15%. Investor is founder of AirCel Telecommunication Company.
Apr-06 India VSNL Thomson Investment: Rs 2.3 billion for 50% stake. Joint venture operations will focus in online entertainment genre.
Sep-06 USA Walt Disney Hungama TV (UTV) Consideration: Rs 1.4 billion for 100%. UTV divested kid channel.
Sep-06 India Adlabs Limited Synergy Communication Private Limited
Acquired 51%. Television content production house.
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Figure 21) Major acquisitions and investments by fi nancial investors
Date Segment Country of investor
Investor Investee Notes
Apr-00 Television USA Intel Capital IndusInd Media & Communications
Acquired 3.5% stake in the Hinduja Group’s Cable TV operations
Mar-02 Television Singapore CDP Capital Sony Entertainment TV
Acquired 10% stake for Rs 4.5 billion
Apr-02 Television Singapore CDP Capital UTV Group Acquired 31% stake (exited in 2004)
Sep-02 Television USA GE Capital TV Today Acquired 6.2% stake
Sep-03 Newspapers Australia Henderson Capital HT Media Acquired 15.4% stake for Rs 1 billion
Sep-04 Internet UK 3i, BV Capital Indiagames.com Consideration: Rs 367 million
Oct-04 Newspapers USA Citicorp HT Media Acquired 8.3% stake for Rs 690 million.
May-05 Internet India Soft Bank Asia Infrastructure Fund MakemyTrip.com Consideration: Rs 461 million for a 51% stake
The company was launched in 2000.
Sep-05 Filmed entertainment and music
USA DFJ Seventymm Consideration: Rs 92 million
Nov-05 Internet USA Infinity Capital Sify.com Consideration: Rs 1,707 million for a 40% stake
Sify India is one of the leading online portals
Dec-05 Internet India Sequoia Capital Times Internet Consideration: Rs 322 million
Times of India online portal.
Feb-06 Internet USA KPCB, Sherpalo Ventures Naukri.com Consideration: Rs 460 million
One of the leading online jobs portal.
Feb-06 Internet India Sequoia Capital Travelguru.com Consideration: Rs 460 million
One of the leading online portals offering hotel, airline and car rentals.
Mar-06 Filmed entertainment and music
India Sonata Investments Limited Pritish Nandy Communications
9.3% stake
Mar-06 Internet India Sequoia Capital Nazara Technologies Consideration: Rs 69 million
Online and mobile games developer in India.
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Date Segment Country of investor
Investor Investee Notes
Mar-06 Internet India Sequoia Capital Shaadi.com Consideration: Rs 368 million
The leading online matrimony portal in India
Jun-05 Internet India, USA NorthWest Ventures Capital, Reliance Capital and Television Eighteen
Yatra.com Consideration: Rs 230.7 million
NorthWest Ventures Capital is plan to invest US$ 650 million in mobile and consumer Internet enterprises in India
Jun-05 Television Asia Standard Chartered Private Equity NDTV SCPE acquired a 9.49% stake in the news channel broadcaster
Jun-05 Television USA Warburg Pincus UTV Group Acquired 26% stake (exited in 2002)
Aug-05 Internet USA Westbridge Capital Partners, Sequoia Capital
Indiatimes.com Acquired 15% stake in the Indiatimes portal (owned by Bennett, Coleman & Co. Ltd)
Jun-06 Filmed entertainment and music
India Reliance Capital Pritish Nandy Communications
9% stake
Jun-06 Internet Not identified Not identified Burrp, Inc Mumbai based blog provider in India.
Jun-06 Internet USA KPCB, Sherpalo Ventures Cleartrip.com Consideration: Rs 138 million
The portal offers hotel and air ticket bookings in India
Jun-06 Internet USA KPCB, Sherpalo Ventures InfoEdge Consideration: Rs 211 million
InfoEdge hosts 99acres.com, jeevansathi.com and naukri.com portals.
Aug-05 Television UK 3i Nimbus Communications
Acquired 33% stake for Rs 2 billion.
Nimbus is a television sports and entertainment production company.
Aug-06 Internet USA Yahoo, Canaan Partners Bharat Matrimony Group
Consideration: Rs 395 million
One of the leading online matrimonial portal.
Sep-06 Internet India Matrix Partners Seventymm Consideration: Rs 320.7 million
Portal has 7,500 customers and film library of 10,000 titles.
Jan-07 Internet India Matrix Partners Digital Music India Invested in vJive offering
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Date Segment Country of investor
Investor Investee Notes
Jan-07 Radio India IDBI BAG Films Limited Acquired 10% stake
BAG owns 10 radio licences
Jan-07 Radio India Sameer Gehlaut BAG Films Limited Consideration: Rs 263.25 million for 25% stake
BAG owns 10 radio licences
Feb-07 Diversified media USA Blackstone Group Ushodaya Enterprises Consideration: Rs 12.3 billion for 26% stake
The Eenadu Group (active in newspapers, television and film)
Feb-07 Radio USA Balfour Capital Noble Broadcasting Corporation
Consideration: Rs 17 million for 20% Radio broadcasting arm of Tamil publisher, Kumudham Publications
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III) MEDIA MARKET OVERVIEW
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A. Overview
The Indian media market is in the midst of a period of unprecedented growth. The sector as it is recognisable today emerged in the early 1990s with the launch of commercial television. In addition to the emergence of domestic broadcasters such as Zee TV and Sun TV, a number of foreign broadcasters (Star TV, Sony) entered the Indian market. In the late 1990s, the birth of the Internet, licencing of commercial radio and double digit growth in print adspend fuelled further strong growth. Since then a process of regulatory liberalisation and strong economic growth have continued to generate double digit growth in revenues.
Figure 22) Development of the Indian media market
In the last two years, key growth drivers have included the rollout of multiplexes, DTH and the implementation of conditional access technology on India’s cable TV networks. In addition to this, a large number of new radio stations are coming on air across the country and Internet usage is growing strongly.
The media market has evolved at such a rapid rate, that the Indian government has been reactive when developing media regulation rather than proactively setting the ‘regulatory agenda.’ The effect of this has been to create some ‘anti-competitive’ issues; for example, there are no cross-media ownership rules and in some geographic regions, local media companies have established leadership in both print and broadcast media.
20021990 1995
Emergence of commercial TV
Entry of major broadcasters (News Corporation, Disney)
2005/06
Liberalisation of foreign investment rules in print media
Launch of commercial radio
Surge in investment in Indian Internet companies
Socio -economic growth drivers
Investment activity
2008
1991Population: 835 million
Literacy: 52%
Urban population: 25%
GDP per capita: Rs 6,720
Launch of DTH
Emergence of first Internet companies
Domestic broadcasters (Zee, Sun TV) emerge
Increased activity by foreign magazine publishers
2005
Population: 1.2 billion
Literacy: 70%
Urban population: 30%
GDP per capita: Rs 31,600
20021990 1995
Emergence of commercial TV
Entry of major broadcasters (News Corporation, Disney)
2005/06
Liberalisation of foreign investment rules in print media
Launch of commercial radio
Surge in investment in Indian Internet companies
Socio -economic growth drivers
Investment activity
2008
1991Population: 835 million
Literacy: 52%
Urban population: 25%
GDP per capita: Rs 6,720
Launch of DTH
Emergence of first Internet companies
Domestic broadcasters (Zee, Sun TV) emerge
Increased activity by foreign magazine publishers
2005
Population: 1.2 billion
Literacy: 70%
Urban population: 30%
GDP per capita: Rs 31,600
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B. Market size and structure The India media market generated revenues of approximately Rs 340 billion (US$7.5 billion) in 2006. Film and music revenues accounted for a fifth of the market.
Figure 23) Indian media market, revenues 3
(Rs millions) 2006 Advertising Subscription Other Total
Television 62,238 90,000 152,238
Newspapers 65,643 21,859 87,503
Magazines 8,794 1,759 10,553
Radio 4,280 - 4,280
Outdoor 10,316 - 10,316
Online 1,575 23 1,598
Cinema advertising 1,595 - 1,595
Directories 2,500 2,500
Business media 2,700 1,350 450 4,500
Filmed entertainment 58,500 58,500
Music 10,000 10,000
Total 159,640 114,991 68,950 343,581
Figure 24) Share of revenues by type 4
The media market has been achieving annualised growwth of between 10%-15% over the last five years, with sectors such as online media and radio achieving the highest growth rates.
Two factors which impact the reliability of market size forecasts are the under-declaration of revenues for Pay TV subscriptions and cinema receipts.
Fim and music20%
Advertising46%
Subscription34%
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Market characteristics
High degree of competition
Competition for audiences and advertisers is quite severe in most segments of the Indian media market. Typically, competition is focused on price rather than on quality of content or reach. This has meant that in sectors such as newspapers, editorial quality has declined and circulation revenues have remained flat. With the current strength of the media market, media companies have absorbed the impact of price competition – however, in the event of an economic downturn, companies with weaker products will suffer.
High level of private ownership
Many major media companies are still controlled by the founding entrepreneurs/families. In recent years, there has been a trend to bring in minority investors through the IPO route or foreign direct investment, but often such investment has been limited to subsidiaries and has not been into the group holding company.
Significant cross media ownership
Leading companies often have activities in both the print and broadcast sectors of the media industry, with many publishing companies investing in television and radio over the last five years. This reflects the relatively young nature of the Indian media industry and we are likely to see increasing specialisation as competition intensifies and the industry matures. The government is planning to intorduce cross-media ownership restrictions as part of the Broadcast Services Regualtion Bill (currently being debated in Parliament).
A sophisticated marketing services industry
Advertising and marketing services in India compare well with those in Europe and North America (all major European and North American marketing services groups are active in India through their own operations and joint ventures).
A transparent regulatory environment
The media sector is regulated by a number of bodies (Ministry of Information and Broadcasting, Telecoms Regulatory Authority of India) which have adopted a regulatory approach based on industry consultation. Regulatory decisions can and are regularly challenged in the Indian courts. The Indian media enjoys editorial freedoms on a par with any other leading democracy; this tradition evolved under British rule and has continued to this day.
Increasing foreign investment
Foreign media companies have entered the Indian media sector through joint ventures, partnerships and direct investment. Whilst the rules on foreign direct investment in media can appear to be quite restrictive, many trade and financial investors have made investments.
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Significant regional linguistic and cultural divers ity
India’s regional complexity is very evident in the media industry, especially in segments such as television and newspapers. The market can be divided into three broad segments: English language media; Hindi media; and regional language media. In recent years, regional language media have achieved greater growth than both English language and Hindi media. For example, the southern states of Tamil Nadu, Karnataka and Kerala are typically serviced by local media produced by local companies (e.g. Sun TV, Malaya Manorama).
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C.Media penetration and usage
The key observation on media penetration and usage in India is that both are low compared to developed markets, but are growing strongly. The growth is driven improved literacy, better penetration into rural markets and increasing prosperity. Penetration and usage vary by media, gender and the urban/rural split. Newspapers, television and radio are the three most important and widepsread media in both rural and urban areas. The lower level of literacy among women means that they consume less print media than men. In addition to this, cinema going is only now becoming a family activity (with the growth of multiplexes); traditionally, men were more likely to go to the cinema alone. Internet reach has been held back by the relatively slow roll-out of access into small cities and rural areas. Radio reach is growing strongly as new local FM radio stations are launched (245 new licences issued in 2006).
Figure 25) Reach of various media 5
In both print and broadcast media, much of the growth in recent years has primarily been in local language content (English language offferings have had flat or declining market share). This may be due to increased media penetration of rural areas and smalll towns where local languages are moe important. The above analysis suggests that magazine reach is declining; however, this survey doesn’t accurately reflect the recent growth in circulation of foreign magazines (not covered by the NRS study).
The growth prospects for media consumption via Internet and mobile platforms are extremely strong. In 2006, 44% of urban mobile users had used added features (e.g. SMS) or downloaded some mobile content on their phone.
206 207
75
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222230
68
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25
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200
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Cab & SatTelevision
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Cinema - urban Cinema - total FM Radio
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D.Advertising spend
Overview
India’s 2006 adspend is approximately US$3.4 billion. The two leading market sources (Adex and ZenithOprimedia) estimate 2005 adspend in the region of US$2.9 – US$3.7 billion; we believe that the true figure was close to US$3 billion.
Figure 26) Indian Adspend 6
Rs millions (2005 data) Adex ZenithOptimedia
Television 54,120 55,035
Newspapers 55,630 87,480
Magazines 7,581 11,925
Radio 3,170 3,330
Outdoor 8,970 7,470
Online 1,050 450
Cinema 1,450 1,080
Total 131,971 168,727
Note: ZenithOptimedia is converted from US$ at a rate of Rs 45
The two largest segments of adspend are newspapers and television. Sectors such as radio have only emerged as serious commercial sectors in the last five years and they are likely to capture an increasing share of adspend.
Figure 27) % Adspend by media type 7
Television41%
New spapers42%
Magazines6%
Radio2%
Online1% Cinema
1%
Outdoor7%
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Indian advertising has consistently achieved double digit growth since the early 1990s, with the exception of one decline in 1998 (when the Indian economy was impacted by a currency crisis).
Figure 28) % growth in adspend (1994 - 2008) 8
Emerging sectors such as online, radio and cinema advertising have achieved the highest growth rates.
Figure 29) Adspend, CAGR historic growth 9
-
1,000
2,000
3,000
4,000
5,000
6,000
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Tot
al a
dspe
nd (
US
$ m
n)
-30%
-20%
-10%
0%
10%
20%
30%
% c
hang
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Total adspend % change
10.9%
16.1%
9.2%
31.2%
5.2%
28.0%
99.4%
13.0%
0% 20% 40% 60% 80% 100% 120%
Television
Newspapers
Magazines
Radio
Outdoor
Online
Cinema
Total
% CAGR (2001-05)
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Adspend analysis
Analysis of the leading advertisers reflects the importance of the FMCG, automotive and telecoms sectors. Advertising spend from sectors such as financial services and retailing is underdeveloped compared to more mature economies. In terms of spend by media type, FMCG advertising allocates virtually all of its spend to television (the key medium for reaching a mass market audience).
Figure 30) Adspend – leading categories of advertis ers10
2005 data
Top 20 advertising categories
Total adspend (Rs mns)
% Press % TV % - Radio
Food and beverages 13,180 4.7% 94.7% 0.6% Personal car and hygiene 10,559 3.2% 96.4% 0.3% Automotive 7,745 40.7% 59.0% 0.3% Banking, finance and investment 6,696 45.8% 53.2% 1.0% Hair care 6,072 3.5% 96.1% 0.5% Services 5,873 63.6% 35.5% 0.9% Durables 4,859 33.6% 66.1% 0.3% Telecom/Internet services 4,848 32.3% 66.7% 1.0% Media 4,519 82.2% 14.8% 3.1% Personal healthcare 4,373 13.2% 86.4% 0.3% Education 4,241 34.0% 65.4% 0.6% Textiles and clothing 3,809 89.0% 10.8% 0.3% Laundry 3,034 34.5% 65.1% 0.3% Household products 2,971 5.3% 94.5% 0.2% Corporate and brand identity 2,856 9.0% 90.8% 0.3% Building and industrial 2,599 52.8% 46.8% 0.4% Computers 2,558 15.0% 84.6% 0.3% Retail 2,461 58.8% 40.3% 0.9% Telecom products 2,196 70.3% 28.3% 1.5% Insurance 2,010 18.7% 81.1% 0.3%
Figure 31) Adspend – leading advertisers 11
2005 data
Advertiser
Total adspend (Rs mns)
% Press % TV % Radio
Hindustan lever 6,434 2.1% 97.3% 0.6% Paras Pharmaceuticals 2,933 99.8% 0.1% Procter & Gamble 2,042 0.1% 99.9% Reckitt Benkiser 2,015 0.6% 99.3% 0.1% Dabur 1,717 3.7% 95.9% 0.5% Nokia 1,637 12.8% 87.0% 0.2% Johnson & Johnson 1,459 0.7% 99.3% Pepsi Co 1,416 1.8% 97.9% 0.3% L'Oreal 1,380 6.1% 93.9% Colgate Palmolive 1,364 1.2% 98.7% 0.2% Tata Teleservices 1,262 15.5% 84.0% 0.5% Maruti Udyog 1,231 27.7% 72.1% 0.2% Emami 1,226 8.0% 91.7% 0.3% Bennett Coleman & Co 1,204 92.3% 5.5% 2.2% Bharti Airtel 1,197 19.8% 79.3% 0.9% Tata Motors 1,143 28.9% 71.0% 0.2% Bajaj Auto 1,004 37.0% 62.9% 0.1% TVS Motor company 935 26.4% 73.6% ITC 822 16.6% 83.1% 0.3% LG Electronics 822 45.4% 54.4% 0.3%
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Growth prospects
The medium term prospects for advertising are extremely good, even for the more mature, well established sectors such as outdoor advertising and television.
Figure 32) Adspend growth prospects 12
Sector Primary growth drivers
Newspapers
� Ongoing growth in readership (6.6% in 2005)
� New classified advertising sectors (e.g. property, automotive)
Consumer magazines
� Readership of domestic titles appears to be declining, but circulation growth is strong
� New title launches (many foreign titles)
Radio
� Growing from a very small base
� Significant number of new station launches
� Increasing number of advertisers allocating adspend budget to radio (especially to national networks)
Television
� Ongoing penetration of households (10% p.a. growth)
� But increasing audience fragmentation with growth of DTH and cable TV
Online media
� Growing from a very small base
� Strong growth as Internet penetration and usage grows
Business, scientific and academic media
� Growing from a small base
� Economic growth will fuel launches in new sectors (e.g. retail, energy)
Outdoor advertising
� Well established medium
� Growth will come from higher rates for premium sites and new contracts for transport networks
Directories
� Growing from a small base
� Yellow pages directories are being launched in an increasing number of small cities
Cinema advertising � Driven by growth in multiplexes (and audiences)
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E. Major players
Major players in the Indian media market tend to fall into one of three categories: long established media companies, often controlled by a founding family and with activities in a wide range of media; companies established since the 1990s by entrepreneurs and typically focused on one media segment; and thirdly, foreign players who entered the market in the 1990s.
Figure 33) Major players by sector
Sector Domestic players Leading foreign players
Filmed entertainment and music
Adlabs Films
Balaji Telefilms K Sera Sera
Mukta Arts UTV Software communications
Music: Saregama
Cinemas: Inox Leisure PVR Cinemas Pyramid Saimira Theatres
Shringar Cinemas
Star TV (News Corporation) – stake in Balaji Telefilms Eros International
Television and radio
Global Broadcast News
NDTV Nimbus Sports Prasar Bharti
Sun TV
Television Eighteen TV Today Network
Zee Entertainment
Radio: Mid-day Multimedia ENIL
Adlabs Films
DTH: Dish TV Tata Sky Cable TV: InDigital Hathway cable
Wire & Wireless India
Star TV (News Corporation)
Sony Disney Discovery Networks
Time Warner
BBC Worldwide
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Sector Domestic players Foreign players
Publishing Deccan Chronicle
Delhi Press
Eenadu group HT Media
Jagran Prakashan
Living Media
Kasturi & Sons (The Hindu group) Mid-day Multimedia
Macmillan
Sandesh
Times of India group
Business media: Cybermedia Infomedia India
Jasubhai Group
Directories: Indiacom Tej Bandhu group
Conde Nast
Financial Times (stake in Business standard)
Haymarket publishing Independent News and Media (stake in Jagran Prakashan) BBC Worldwide
United Business Media
Alternative media Selvel Vantage Posterscope
Clear Channel JCDecaux
Marketing services
Mudra Communications IB & W
Havas Publicis
Omnicom
Interpublic WPP
Online media Infoedge Bharatmatrimony
Shaadi.com
Google MSN
Monster.com
Yahoo
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F. Regulatory environment
The media regulatory environment has developed along similar lines to those in Europe and North America, with a number of independent regulators implementing policy on behalf of the government. Regulatory development has largely been reactive and their have been problems in sectors such as Radio, where the first phase of commercial radio licencing was poorly handled.
The key department is the Ministry of Information and Broadcasting which plays a lead role in policy formulation (e.g. radio licencing), oversight of public service broadcasting and foreign investment. The telecoms regulator, Telecoms Regulatory Authority of India (TRAI) has responsibility for regulating the Internet services provision, cable television and DTH services. In the print media, newspapers and periodicals have to be registered with the Registrar of Newspapers for India (RNI) and editorial issues are dealt with by the Press Council of India (a body which is independent from the government but has statutory powers).
Broadcast Services Regulation Bill
The biggest change in media regulation is likely with the Broadcast Services Regulation Bill. It is currently being debated in the Indian Parliament, but may get passed in early 2007. Its key elements are:
� Launch of a broadcast regulator (Broadcast Regulatory Authority of India) to regulate the broadcast market.
� Implement cross-media ownership rules. Rules to prevent cross-sector (print/television/radio) and geographic concentration.
� Set minimum levels for domestically-originated content on television. Currently, it is proposed that 15% of content must be produced in India.
� Set minimum obligations on ‘public service content’ on advertising and programming on all channels. Currently, it is proposed that 10% of air time must be set aside for public service broadcasts (as specified by the government).
� Certain national and international sporting events will have to be made available to the public service television and radio broadcasters.
Foreign investment rules
Responsibility for administering foreign investment policies falls to three government bodies: Reserve Bank of India (India’s central bank); Foreign Investment Promotion Board (FIPB); and Securities and Exchange Board of India (SEBI), which regulates India’s capital markets.
For many sectors, foreign direct investment (FDI) is allowed without prior governmental approval; this route is known as the “automatic route.” Investment in both print and broadcast media does not qualify for this route and requires prior approval from the FIPB. The FIPB grants approvals on a case by case basis, usually within a 6-8 week period. However, it is common with most media, to apply to the Ministry of Information and Broadcasting (MIB) for approval; once this is obtained, FIPB approval is a relative formality.
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Figure 34) Foreign investment rules in media
Sector Ownership cap Notes
Scientific and technical journals 100% Application must be made to the MIB. Once they have reviewed and accepted the proposal,
further approval from the FIPB and RBI is automatically given.
News and current affairs (newspapers and periodicals)
26% For newspapers and periodicals with news and current affairs content, MIB approval is required.
The MIB sets a number of safeguards; these include verifying the credentials of the investor; ensuring that editorial and operational control remains with resident Indians (including 75% of all key executive and editorial roles); requiring 51% of the (active) equity to be held by an Indian.
In addition to this, there are rules regarding how the investment is made (for example, 50% of it must be through new equity).
Television content production, media rights and marketing services
100% No restrictions. Regulation of content may change with the establishment of a Broadcast Content Regulatory Authority (currently it is self-regulated).
Cable TV 49% 51% of equity (paid up share capital) must be held by Indians.
News and current affairs (television) 26% Similar process to news and current affairs (print media).
Changes to key management personnel or the foreign shareholding require government approval.
DTH 49% (26% for direct FDI)
The 49% cap includes FII investment too. Editorial and management control must be with resident Indians. Some cross-media ownership restrictions.
Foreign owned channels can be included in a DTH service.
Radio 20% Editorial and operational control remains with resident Indians.
51% of the equity to be held by a resident Indian .
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G. Internet penetration and usage
In India today, there are approximately 25 million active Internet users and 8.1 million Internet subscribers. Home, work and Internet cafes are the three most common methods of Internet access.
Figure 35) Number of active Internet users 13
The state-owned telecoms operator Videsh Sanchar Nigam Limited (VSNL) launched Internet services provision in India in 1995 and remained the monopoly ISP for the next 4 years. In late 1998, the government liberalised the ISP market issuing licences to private operators. In September 2006, India had approximately 8.1 million Internet subscribers, with the incumbent telecoms operators, BSNL and MTNL accounting for 50% of the market.14
Figure 36) Internet subscribers 15
Dec-04 Mar-05 Jun- 05 Sep-05 Dec-05 Mar- 06 Jun-06 Sep-06
BSNL 1,679 1,839 2,017 2,262 2,597 2,929 3,320 3,550
MTNL 949 1,012 1,111 1,207 1,314 984 1,485 1,536
Sify 772 812 846 856 877 898 912 868
VSNL 935 703 641 509 467 556 472 451
Bharti Infotel - 129 155 193 313 392 442 524
Reliance - 247 284 310 340 360 397 440
Data Infosys 248 222 231 246 245 246 101 104
YOU Telecom - 86 96 104 111 117 123 128
Hathway Cable - 41 41 50 57 62 69 95
Total 4,583 5,554 5,892 6,125 6,703 6,935 7,709 8,080
% Change 21.2% 6.1% 4.0% 9.4% 3.5% 11.2% 4.8%
% yr – yr growth 46.3% 24.9% 30.8% 31.9%
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Broadband growth
Broadband subscribers (typically a download speed of up to 250 kbps), account for approximately 19% of all subscribers (1.557 million subscribers); the Broadband share has grown from 2% in 2003. Broadband access is typically 3 times as expensive as dial-up and is only more cost effective for high usage customers.
Figure 37) Internet subscription pricing
Service Cost (2006)
Access at an Internet cafe Rs 5 – 15 per hour Dial-up subcription (assume 3 hours per month peak time usage) Rs 72 / mth (in Mumbai and Delhi) Rs 47 (Rest of India)
Broadband subscription
Rs 199 / mth (in Mumbai and Delhi) Rs 250 (Rest of India) Plus hourly charge of Rs 4 - 6
Growth of Internet access in small towns
Internet usage is growing more rapidly in towns and small cities than in India’s metros. Small towns now account for a third of Internet users compared to one fifth in 2001. Cable services
As Cable TV operators invest in their networks and in Conditional Access technology, they are likely to offer an alternative to Broadband access via DSL. At present, cable only accounts for 5% of subscribers (with DSL accounting for 90%).
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H.Telecoms environment
Introduction
The Indian telecommunications market has undergone a major transformation in the past twenty years. The key changes have been the transition from a state-owned sector to one with a large number of private sector players and the emergence of mobile telephony. Prior to market liberalisation, the fixed line telecoms sector was unreliable and consumers had to wait for very long periods to get a connection. The emergence of mobile telephony allowed very rapid growth in telecoms penetration in a short space of time.
The telecoms sector (including telephone directories) is regulated by the Department of Telecoms (DOT) and the Telecoms Regulatory Authority of India (TRAI).
2007 January. TRAI cuts mobile roaming charges by 56%.
DOT is reviewing TRAI recommendations on 3G networks
2006 September: TRAI issues consultation paper on introduction of 3G services in India recommends licence auction process.
1999 onwards
The third phase of reforms began with the announcement of the New Telecom Policy (NTP) in 1999. This policy was aimed to bring in full competition through unrestricted entry of private players in all service sectors.
The opening up of International Long Distance (ILD) and National Long Distance (NLD) services to the private sector.
1991 onwards
Government liberalised the manufacture of telecom equipment.
In 1994, basic telephony services were liberalised with operating licenses granted to six companies.
The introduction of the National Telecom Policy in 1994 was also part of the second phase.
Mid 1990s saw the launch of mobile phone services.
In 1997, Telecoms Regulatory Authority of India established.
In 1998, Internet service provision was liberalised.
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Market structure
The Indian market has three common forms of telecoms usage: mobile, fixed and PCOs (kiosks where users can make calls). By fare the greatest market growth has been in the mobile telecoms segment.
Figure 38) Key statistics, telecoms market
Number of subscribers September 2006 (millions)
Mobile 129.54
Fixed line 40.477
Public call offices 5.142
Fixed line
Domestic fixed line telephony in India has traditionally been run and maintained by the state-owned operators, BSNL and MTNL. In 2001, fixed-line telephone business was opened to an unlimited number of operators in each of the 21 telecom regions. Prior to this, only one private company had been allowed to compete with an existing state-run player in each region. Also VSNL lost its monopoly for international telephony services in April 2002.
India continues to have one of the lowest telephone penetration ratios in the world. At present, fixed line services are provided by 5 licensed private operators in addition to the incumbent operators BSNL and MTNL. The incumbents continue to have over 85% market share. The latest market data (from December 2006) suggests that the number of fixed line subcribers is declining.
Figure 39) Major fixed line telecoms operators 16
Service Provider Key geographic focus Number of subscribe (Rs millions) (Sept 2006)
BSNL All India except Delhi & Mumbai 33.97
MTNL Delhi & Mumbai 3.72
Tata/Hughes Maharashtra, Mumbai, Andhra Pradesh, Tamil Nadu, Chennai, Karnataka, Gujarat, Delhi, Bihar, Orissa, Rajasthan
0.87
Bharti Madhya Pradesh, Delhi, Haryana, Tamil Nadu, Chennai, Karnataka,
1.63
Reliance Andhra Pradesh, Bihar, Delhi, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Mumbai, Orissa, Punjab, Rajasthan, Tamil Nadu, Chennai, Uttar Pradesh, West Bengal, Kolkata
0.39
HFCL Punjab 0.17
Shyam Rajasthan 0.15
Total 40.48
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Mobile services
Mobile services started in the four major cities of Delhi, Mumbai, Kolkata and Chennai in 1995 and in other areas in late 1996. After a relatively slow start, the number of mobile subscribers has been growing rapidly in recent years with increasingly low tariffs and better quality service. The mobile market has increased from 1.2 million subscribers as of March 1999 to 129 million subscribers in September 2006. Net growth in December 2006 was approximately 6 million subscribers per month.
Unlike many other countries, Indian mobile services operate on all three underlying technologies (GSM, CDMA and WLL). The GSM services account for 70% of subscribers and CDMA for 24% of subscribers.
Figure 40) Market shares of GSM operators
Most mobile customers are pre-pay customers using charge cards to recharge their accounts. In the last eighteen months, operators have reduced the amount of pre-paid charge that subscribers have to purchase; this has further reduced the barriers to entry for mobile customers.
Figure 41) Growth in number of mobile subscribers 17
The mobile operators provide a range of directory services to their own customers; for individual listings, they only provide their own customers’ numbers as there is no unified database.
Bharti30%
BSNL23%
Hutch22%
Idea11%
Others14%
1.90 3.58 6.54
129.54
33.69
13.00
75.94
0
20
40
60
80
100
120
140
2000 2001 2002 2003 2004 2005 2006
No
. of s
ub
scrib
ers
(mill
ion
s)
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Figure 42) Major mobile telecoms operators 18
Service provider
Key geographic focus Number of subscribe (Rs millions) (Sept 2006)
Bharti Delhi, Mumbai, Chennai, Kolkata, Maharashtra, Gujarat,
Andhra Pradesh, Karnataka, Tamil Nadu, Kerala, Punjab, Haryana, Uttar Pradesh, Rajasthan, Madhya Pradesh, West Bengal, Himachal Pradesh, Orissa, Jammu & Kashmir
27.06
Reliance Delhi, Mumbai, Chennai, Kolkata, Maharashtra, Gujarat, Andhra Pradesh, Karnataka, Tamil Nadu, Kerala, Punjab, Haryana, Uttar Pradesh, Rajasthan, Madhya Pradesh, West Bengal, Himachal Pradesh, Bihar, Orissa, Assam, North East
25.98
BSNL Chennai, Kolkata, Maharashtra, Gujarat, Andhra Pradesh, Karnataka, Tamil Nadu, Kerala, Punjab, Haryana, Uttar Pradesh, Rajasthan, Madhya Pradesh, West Bengal, Himachal Pradesh, Bihar, Orissa, Assam, North East, Jammu & Kashmir
23.70
Hutch Delhi, Mumbai, Chennai, Kolkata, Gujarat, Andhra Pradesh, Karnataka, Punjab, Haryana, Uttar Pradesh, Rajasthan, West Bengal
20.36
Idea Delhi, Maharashtra, Gujarat, Andhra Pradesh, Kerala, Haryana, Uttar Pradesh, Madhya Pradesh
10.36
BPL Mumbai, Maharashtra, Tamil Nadu, Kerala 1.05
Spice Karnataka, Punjab, 2.20
Tata/Hughes (TTSL)
Delhi, Mumbai, Chennai, Maharashtra, Gujarat, Andhra Pradesh, Karnataka, Tamil Nadu, Rajasthan, Bihar, Orissa
12.38
MTNL Delhi, Mumbai 2.43
HFCL Punjab 0.15
Shyam Rajasthan 0.08
Aircel 3.80
Others -
Total 129.54
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Public Call Offices (PCOs)
PCOs are a common site in India, providing people with basic telephone services. They typically consist of a number of booths where individuals can make calls which are charged on a time usage basis. In the 1980s, private companies were given the opportunity to operate PCO franchises. Today, there are 5.15 million PCOs in India with the majority operated as franchises of the incumbent telecoms operator, BSNL; most will have a print copy of the local telephone directory.
Figure 43) Major PCO operators 19
Service Provider
Key geographic focus Number of PCOs (Sept 2006)
BSNL All India 2,102,666
MTNL Delhi & Mumbai 263,461
Bharti Madhya Pradesh, Delhi, Haryana, Tamil Nadu including Chennai, Karnataka
264,713
HFCL Punjab 44,249
Tata Maharashtra, Mumbai, Andhra Pradesh, Tamil Nadu, Chennai, Gujarat, Karnataka, Delhi
1,097,804
Reliance Andhra Pradesh, Bihar, Delhi, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Mumbai, Orissa, Punjab, Rajasthan, Tamil Nadu, Chennai, Uttar Pradesh, West Bengal, Kolkata
1,335,119
Shyam Rajasthan 41,698
Total 5,149,710
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IV) COUNTRY PROFILE
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A.Overview
India is a democratic republic with a population of 1.1 billion. Historically, India was a collection of kingdoms and empires, with modern India taking shape under British rule which started in the 18th Century and ended in 1947. Another consequence of British rule is the fact that a substantial portion of India’s political and legal institutions are modeled on British law. The table below gives a comparison of India against other key emerging economies.
Figure 44) Key statistics on the BRIC economies 20
India Brazil China Russia
Local currency Rupees Real Rembini Roubles
Population (millions) 1,095 186 1,315 142
GDP at market prices (Local curr bn) 39,771.8 2,062.1 21,330.0 26,934.0
GDP (US$ bn) 876 947 2,676 986
Real GDP growth 8.7% 2.9% 10.5% 6.6%
GDP per capita (US$, 2005) 799.9 5,077.8 2,034.9 6,929.0
GDP per head (Local curr, 2005) 28,895 4,320 14,279 151,059
% growth 7% 0.8% 9.2% 6.8%
GDP (by origin)
Agriculture 19.0% 8.0% 18.5% 5.6%
Industry 27.4% 37.9% 81.5%* 3.8%
Manufacturing 15.9% 54.1%
Services 53.6% 56.4%
Other 0.0%
* For all of industry, services and manufacturing
India is a union of 28 states and 7 union territories. The power of individual states has been increasing throughout the 1990s, with states now managing up to 90% of spending in key areas such as health, education and irrigation.
Indian media market
Figure 45)
Figure 46)
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Map of India, Major cities
Map of India, States by language 21
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B.Economic profile
The 1990s started a transition in India which has led to greater openness, transparency and competition both politically and economically. Economic growth surged to an unprecedented 7% during the mid 1990s and has held at around 6%-8% per annum. The economy has also become much more integrated with the world economy with both imports and exports increasing significantly. Key drivers of economic growth in the 1990s were:
� Reductions in import/export tariffs.
� Streamlining of procedures for foreign direct investment.
� Deregulation of the financial sector.
� Growth of the export-orientated IT and business outsourcing sectors.
� Increasing literacy and urbanisation (and a growing middle class).
� Relatively stable government.
Figure 47) Key macro-economic indicators 22
% growth 2005 2006 2007 2008 2009 2010
GDP 8.5% 7.6% 7.4% 7.2% 6.9% 6.9%
Private consumption 6.6% 6.9% 6.3% 6.1% 6.1% 6%
Government consumption 8% 8% 7% 6.5% 6% 6%
Gross domestic investment 10% 9.5% 9% 9.5% 10% 10%
Exports of goods & services 22.3% 18.4% 14.6% 13.3% 12.1% 12.2%
Imports of goods & services 19% 13.3% 11.8% 12.2% 12.7% 12.7%
Natural resources and power generation
India is not rich in natural resouces such as oil and gas (coal is the most abundant resource). India’s other main mineral resources are iron ore and bauxite (for aluminium production).
The country is planning significant investment in nuclear power and in building distribution capability (ports, pipelines and storage facilities) to import more oil and gas.
Transport infrastructure
India’s transport infrastructure has suffered from a lack of investment, but there is now a strong political impetus to remedy the problem. There are significant road building, airport construction and port investment programmes underway. The domestic airline industry is the fastest growing in the world. A key step in this process has been the removal of restrictions on foreign direct investment in a number of these areas (e.g. ports, roads).
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Foreign investment
Growth in foreign direct investment (FDI) has been significant through the 1990s but is still well below that of other comparable countries as a percentage of GDP. In 2001, 1,590 FDIs were approved for a total value of Rs 230.6 billion (€4.3 billion) compared to 289 approvals in 1991 for Rs 5.340 billion (€97 million). However, FDI still accounts for less than 1% of India’s GDP compared to over 4.3% in China.
In terms of sector focus, the key areas for foreign direct investment are power, transportation and telecoms. These are the sectors where the government sees the greatest need for long term infrastructure investment. However, in the coming years, retail and distribution and logistics will grow in importance as targets of FDI.
Figure 48) Foreign direct investment by sector (199 1-2004)23
Sector % of total FDI inflow
Electrical equipment 14.83
Transportation industry 11.56
Telecommunications 11.08
Power (including oil) 9.97
Services sector 8.37
Chemicals (other than fertilizers) 5.74
Food processing industries 4.43
Metallurgical industries 1.76
Paper & Pulp 1.27
Hotel & Tourism 0.97
Other 30.02
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Labour market
A key objective of government policy has been to provide increased employment opportunities for India’s growing population.
Figure 49) Population analysis 24
Measure Male Female Total
Population 531 496 1027 - Rural 381 361 742 - Urban 150 135 285 Aged 6 or below 82 76 158 Literacy 340 227 567
India has a labour force of 406 million of which 397 million are in employment. Of these only 28 million are in organised sector employment – mostly in the public sector.
Figure 50) Labour force statistics 25
% Annual growth rates
Sector 1999-00 1983-94 1994-00
Total population 1,004.1 2.12 1.93 Labour force 406.05 2.05 1.03 Employed 397 2.04 .98 Organised sector employment 28.11 1.20 .53
Public sector 19.41 1.52 -.03 Private sector 8.7 0.45 1.87
Analysing the Indian labour market by sector illustrates the increasing urbanisation and industrialisation that occurred during the 1990s. Agriculture experienced a decline in employment, whilst sectors such as finance, trade and transport grew strongly.
Figure 51) Labour force by sector (2001) 26
Millions % Annual growth rates
Sector 1999-00 1983-94 1994-00
Agriculture 237.56 1.51 -.34 Mining & quarrying 2.27 4.16 -2.85 Manufacturing 48.01 2.14 2.05 Utilities 1.28 4.5 -.88 Construction 17.62 5.32 7.09 Trade 37.32 3.57 5.04 Transport, storage and Comms. 14.69 3.24 6.04 Financial services 5.05 7.18 6.2 Community services 33.20 2.9 .55
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Regional differences
India is an extremely diverse country in terms of language, culture and economic strength. From an economic perspective, India’s southern states have been the engine of the services sector over the last decade; this has partly been due to a greater government emphasis on improving education and literacy rates.
Figure 52) Regional GDP per capita and population a nalysis
State Population (000s) Rs per capita Chandigarh 901 65,865
Goa 1,348 62,478
Delhi 13,851 55,728
Pondicherry 974 53,462
Haryana 21,145 30,887
Andaman Islands 356 30,886
Maharashtra 96,879 30,347
Punjab 24,359 29,674
Gujarat 50,671 28,134
Kerala 31,841 28,093
Tamil Nadu 62,406 26,790
Himachal Pradesh 6,078 26,379
Mizoram 889 25,884
Sikkim 541 25,423
Andhra Pradesh 76,210 24,029
Nagaland 1,990 23,618
West Bengal 80,176 22,451
Karnataka 52,851 22,389
Tripura 3,199 21,880
Uttaranchal 8,489 18,847
Meghalaya 2,319 18,755
Arunachal Pradesh 1,098 17,951
Manipur 2,167 16,481
Jammu & Kashmir 10,144 16,362
Rajasthan 56,507 16,341
Madhya Pradesh 60,348 15,751
Chattisgarh 20,834 15,552
Assam 26,656 14,490
Jharkand 26,946 13,791
Uttar Pradesh 166,198 12,350
Bihar 82,999 6,760
Orissa 36,805 6,687
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C. Demographic profile
Socio-economic profile
The last 15 years have seen a significant increase in prosperity in India, but approximately a third of Indians still live under the poverty line. The middle class is estimated at approximately 135 million adults (falling into demographic categories A, B, C, R1 and R2); this group is growing by 30–40 million individuals per annum.
Figure 53) Adult population by economic status 27
Status Definition Millions (2001)
Urban
A High/Intermediate managers/well educated/businessmen with large organisations
17.7
B Intermediate managers/good education /businessmen /self employed with small organisations
32.7
C Petty traders /shop owners/ clerks/salesman /supervisors with some education
40.4
D Poorly educated petty traders/ shop owners/clerks/ salesman 42.7
E Skilled/ unskilled workers 54.9
Rural
R1 Well educated, living in good houses 11
R2 Good education, living in not very good houses 32.7
R3 Some education, living in huts and temporary shelters 158.6
R4 Uneducated, living in temporary shelters 294.8
TOTAL 685.5
Education
Literacy rates have risen rapidly over the last fifty years (for men, from 27% in 1952 to 75.6% in 2001 and for women, from 9% in 1951 to 54% in 2001). However regional variations are still quite high at a state level (Kerala has a rate of 91% and Bihar has a rate of 49%). At the tertiary level, India has a large network of both public and private universities with intense competition for the best colleges.
Healthcare
Healthcare in India is largely a private-based system with access based on ability to pay. Only 1 in 10 Indians have health insurance and many of these policies do not provide sufficient cover.
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Language and literacy
Across India, 16 major languages and dozens of dialects are spoken with over 40% of the population speaking Hindi. English is widely spoken among the middle classes (especially in the major cities) and is the main language for business.
Figure 54) Population by primary language 28
Language Primary region % of population (2001)
Hindi North India 40.2 Bengali West Bengal 8.3 Telugu Andhra Pradesh 7.9 Marathi Maharashtra 7.5 Tamil Tamil Nadu 6.3 Urdu Jammu and Kashmir 5.2 Gujarati Gujarat 4.9 Kannada Karnataka 3.9 Malayalam Kerala 3.6 Oriya Orissa 3.4 Punjabi North west India 2.8 Assamese Assam 1.6 Sindhi North west India 0.3 Nepali North India (Nepalese borders) 0.3 Konkani Goa 0.2 Manipuri Manipur (North east India) 0.2 Other Languages 3.7
In urban areas, literacy rates tend to be higher at 80%-90% (compared to 59% in rural areas). Literacy rates have been rising rapidly with an average increase of 10-12% each decade since 1951.
Figure 55) Population and literacy levels for major states 29
State (2001 data) Population (Millions) % literacy rate
Kerala 31.8 91.0 Goa 1.3 82.3 Maharashtra 96.7 77.3 Tamil Nadu 62.1 73.5 Gujarat 50.6 70.0 Punjab 24.2 70.0 West Bengal 80.2 69.2 Haryana 21.1 68.6 Karnataka 52.7 67.0 Madhya Pradesh 60.3 64.1 Orissa 36.7 63.6 Andhra Pradesh 75.7 61.1 Rajasthan 56.4 61.0 Uttar Pradesh 166.1 57.4 Bihar 82.9 47.5
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Urbanisation
About 72% of India’s population live in rural areas, but the proportion living in urban areas has been growing rapidly. There are now 35 cities with a population greater than 1 million, with Mumbai (16.4 million), Kolkata (13.2 million) and Delhi (12.8 million) the three highest.
Figure 56) Number of major cities by population (20 01)30
Class Population size Number of urban areas/towns
Class I 100,000 plus 393 Class II 50,000 - 99,999 401 Class III 20,000 - 49,999 1,151 Class IV 10,000 - 19,999 1,344 Class V 5,000 - 9,999 888 Class VI Less than 5,000 191 Unclassified 10
Figure 57) Major urban centres of population 31
Urban area / city State Population (millions)
Greater Mumbai Maharashtra 16.37 Kolkata West Bengal 13.22 Delhi Delhi 12.79 Chennai Tamil Nadu 6.42 Bangalore Karnataka 5.69 Hyderabad Andhra Pradesh 5.53 Ahmedabad Gujarat 4.52 Pune Maharashtra 3.75 Surat Gujarat 2.81 Kanpur Uttar Pradesh 2.69 Jaipur Rajasthan 2.32 Lucknow Uttar Pradesh 2.27 Nagpur Maharashtra 2.12 Patna Bihar 1.71 Indore Madhya Pradesh 1.64 Vadodara Gujarat 1.49 Bhopal Madhya Pradesh 1.45 Coimbatore Tamil Nadu 1.45 Ludhiana Punjab 1.40 Kochi Kerala 1.35 Visakhapatnam Kerala 1.33 Agra Uttar Pradesh 1.32 Varanasi Uttar Pradesh 1.21 Madurai Tamil Nadu 1.19 Meerut Uttar Pradesh 1.17 Nashik Maharashtra 1.15 Jabalpur Madhya Pradesh 1.12 Jamshedpur Bihar 1.10 Asansol West Bengal 1.09 Dhanbad Bihar 1.06 Faridabad Haryana 1.05 Allahabad Uttar Pradesh 1.05 Amritsar Punjab 1.01 Vijaywada Andhra Pradesh 1.01 Rajkot Gujarat 1.00
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Consumer culture
Strong economic growth has led to the emergence of a large consumer class in India. They are able to spend an increasing proportion of their income on non-essential items; their growing expenditure on media will have a significant impact on growth in the media sector, particularly in areas such as spend on cinema visits, Pay TV, entertainment rentals and books and music.
Figure 58) Forecast growth in key consumer categori es32
2004a 2005a 2006e 2007e 2008e 2009e
Retail sales (US$ bn) 324 373 422 471 508 547
% growth 15.0% 13.0% 11.7% 7.9% 7.6%
Clothing (US$ bn) 50.17 60.05 69.23 80.03 88.10 97.09
% growth 19.7% 15.3% 15.6% 10.1% 10.2%
Cosmetics (US$ mn) 343 392 439 484 513 542
% growth 14.3% 12.0% 10.3% 6.0% 5.7%
New passenger car registrations (000s)
1,064 1,171 1,328 1,482 1,657 1,853
% growth 10.1% 13.4% 11.6% 11.8% 11.8%
Healthcare spending (US$ bn) 34.9 40.4 45.7 52.1 56 60.9
% growth 15.8% 13.1% 14.0% 7.5% 8.7%
Pharmaceutical sales (US$ bn) 4.662 5.334 6.107 6.945 7.658 8.354
% growth 14.4% 14.5% 13.7% 10.3% 9.1%
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V) SECTOR PROFILES
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A.Television
Key developments and trends
� Terrestrial television is well established though penetration is still low (approx. 55%) – even, when compared to developing markets such as China
� In recent years, the number of channels has grown significantly, especially in segments such as news. The quality of content can be poor and there is likely to be a shakeout in the near future (if there is a downturn in advertising)
� Key areas of regulatory impact include: the need for foreign satellite channels to be licenced; implementation of conditional access systems in Cable TV; and eventual launch of a broadcast regulator.
� Pay TV presents most exciting growth prospects with the launch of DTH services. But there is significant price competition between major operators.
� Cost of premium content (Hindi movies, cricket) continues to rise rapidly.
Prior to the first Gulf War in 1991, the terrestrial public service broadcaster, Doordarshan was the sole television broadcaster. Commercial television emerged during the early 1990s with a number of local entrepreneurs launching television channels broadcast by satellite and disributed at the household level by new local cable operators. Foreign broadcasters were attracted to the market in the mid 1990s. Early entrants included Star TV and Sony.
Figure 59) Television market statistics
Measure
Number of households: Television 110 million (growing at 10% p.a.) Cable 50-60 million (2006) DTH 2.7 million (mid 2006) Advertising revenues (2006) Rs 62.2 billion (US$1.4 billion)
Subscription revenues (2006) Rs 90 billion (US$2 billion)
Figure 60) Television market revenues
TV market revenues – by type (2006) TV adspend – by platform (2005e)
Advertising41%
Subscription59%
Terrestrial39%
Cable and satellite
61%
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Today, India’s 110 million television households (of which 50%-55% are cable and satellite households) have access to over 300 television channels (many of which are satellite broadcast); a typical cable and satellite household has access to between 40 and 100 channels.
Figure 61) Major broadcasters
Broadcaster Key channel activities
National and regional presence
Zee Entertainment and Zee News
16 national and 6 regional channels including Zee TV, Zee News, Zee Cinema, Zee Music, Zee Punjabi (similar regional language channels in Marathi, Bengali and Gujurati)
Star TV 15 channels including Star Plus, Star Gold, Star One, Channel [V], Star Utsav, Vijay, Star World, Star Movies, Star Ananda, Star News, ESPN, Star Sports, The History Channel, National Geographic Channel, A1
Doordarshan Public sector broadcaster operating 19 channels including 2 national terrestrial networks and 11 regional channels
Sony Entertainment TV Range of channels including one of the leading national general entertainment channels
Regional only
Sun TV Commercial broadcaster with focus on South India (Tamil Nadu, Karnataka and Kerala)
Eenadu TV Focus on Telugu speaking region
Business and news channels
NDTV Three news channels (NDTV India, NDTV 24X7, NDTV Profit)
TV18 Broadcasts TV18 channel
Global Broadcast News Broadcasts CNN-IBN channel
Times of India Broadcasts Times Now; it is a news channel in which Reuters has a 26% stake.
Figure 62) Television market structure by channel t ype
TV market – share of viewing (2005) TV market – share of adspend (2005)
General34%
Regional languages36%
News7%
Hindi films8%
English1%
Sports8%
Infotainment / kids4%
M usic, comedy, lifestyle, fashion
2%
General39%
Regional languages24%
News12%
Hindi films6%
English4%
Sports9%
Infotainment / kids3%
M usic, comedy, lifestyle, fashion
3%
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In addition to the public service broadcaster, there are three major broadcasters with national coverage, Zee Entertainment, Sony Entertainment and Star TV (subsidiary of News Corporation). Star TV’s channels have a cumulative audience share of approximately 40% (its leading channel Star Plus captures audience share of 18%)33; the leading Zee and Sony channels each capture approximately 10% audience share.
Figure 63) GRPs of major commercial broadcasters
492
129
232
- 100 200 300 400 500 600
Star Plus
SonyEntertainment TV
Zee TV
GRPs (2006)
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Regional channels
In recent years, there has been strong growth in regional language channels. These channels capture a smaller share of adspend as they typically attract an audience with a lower socio-economic profile (compared to English language channels).
Figure 64) Audience shares for leading regional cha nnels
Marathi channels (2006) Bengali channels (2006)
Punjabi channels (Q1 2006) Gujarati channels (Q1 2006)
Telugu channels (Q1 2006) Kannada channels (Q1 2006)
Zee Marathi47%
DD10 Sahyadri
10%
ETV Marathi43%
ETV Bangla53%
Aakaash13%
Zee Bangla28%
DD76%
Bangla Akhon
0%
ETC Punjabi51%
MH122%
Zee Punjabi13%
DD Punjabi6%
Balle balle8%
ETV Gujarati63%
Zee Gujarati21%
DD11 Gujarati16%
Gemini TV31%
Teja TV18%Eenadu TV
15%
Maa8%
Zee Telugu4%
Others12%
Vissa1%
Teja New s1%
TV93%
DD1%
ETV New s3%
Adithya3% ETV Kannada,
24%
Udaya TV, 37%
Zee Kannada, 4%
Ushe, 17%
DD, 4%
Udaya New s, 1%
U2, 6%
Others, 7%
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News channels
The current affairs and business news channels segment is very competitive with a large number of Hindi and English language channels.
Figure 65) Audience shares for news channels
News channels (2006) Business channels (2006)
Star New s17%
Zee New s12%
Aaj Tak17%
NDTV 24*712%
Janmat2%
CNN-IBN7%
India TV8%
TEZ4%
DD New s3%
NDTV India12%
Sahara Samay6%
Aw aaz32%
CNBC TV1829%
NDTV Profit27%
Zee Business
12%
Indian media market
Pay television
Pay TV emerged in the mid 1990s with the growth of cable television networks in the large cities. These networks were relatively primitive with no encryption or addressability and a typical cable TV household paying a monthly subscription of Rs 200-300.
Figure 66)
Implementation of conditional access systems (CAS) in Cable TV
To date, there has been a lack of an effective regulatory or licencing regime for cable operators and this has led to the emergence of a highly fragmented, unorganised industry. The industry has developed with a three tier structure: multisystem operators (MSOs) who have significant coverage in major cities; local cable operators (LCOs) who take a content feed from MSOs and may distribute to an area ranging (ICOs) who typically take a feed directly from channel operators. Generally subscribers have had a relatively poor service, with little choice of service provider and frequent price increase
The lack of addressability of households and the highly fragmented nature of the local cable market means that information on subscriber numbers tends to be inaccurate and there is significant underthe choices ofand the level of carriage fees the channel operator is willing to pay.
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Pay television
Pay TV emerged in the mid 1990s with the growth of cable television networks in the large cities. These networks were relatively primitive with no encryption or addressability and a typical cable TV household paying a monthly subscription of
Structure of cable market
Implementation of conditional access systems (CAS) in Cable TV
To date, there has been a lack of an effective regulatory or licencing regime for cable operators and this has led to the emergence of a highly fragmented, unorganised industry. The industry has developed with a three tier structure: multisystem operators (MSOs) who have significant coverage in major cities; local cable operators (LCOs) who take a content feed from MSOs and may distribute to an
from a single street to a town; and independent cable operators (ICOs) who typically take a feed directly from channel operators. Generally subscribers have had a relatively poor service, with little choice of service provider and frequent price increases.
The lack of addressability of households and the highly fragmented nature of the local cable market means that information on subscriber numbers tends to be inaccurate and there is significant under-reporting of revenues by LCOs and ICOs; the choices of which channels to carry is often based on back room negotiations and the level of carriage fees the channel operator is willing to pay.
Pay TV emerged in the mid 1990s with the growth of cable television networks in the large cities. These networks were relatively primitive with no encryption or addressability and a typical cable TV household paying a monthly subscription of
Implementation of conditional access systems (CAS) in Cable TV
To date, there has been a lack of an effective regulatory or licencing regime for cable operators and this has led to the emergence of a highly fragmented, unorganised industry. The industry has developed with a three tier structure: multi-system operators (MSOs) who have significant coverage in major cities; local cable operators (LCOs) who take a content feed from MSOs and may distribute to an
from a single street to a town; and independent cable operators (ICOs) who typically take a feed directly from channel operators. Generally subscribers have had a relatively poor service, with little choice of service provider
The lack of addressability of households and the highly fragmented nature of the local cable market means that information on subscriber numbers tends to be
reporting of revenues by LCOs and ICOs; which channels to carry is often based on back room negotiations
and the level of carriage fees the channel operator is willing to pay.
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Figure 67) Major cable operators
Cable operator Owned by No. of subscribers Key markets
Wire & Wireless India Limited (Siticable)
Zee Telefilms 6.7 million Delhi, Mumbai, Kolkata, Bangalore, Andhra Pradesh, Madhya Pradesh and North India
Hathaway Cable Raheja group
(Star TV has a 26% stake in HC)
5 million Mumbai, Delhi, Chennai, Pune and Kerala
InDigital Hinduja Group 3 million Mumbai, Delhi and Bangalore
Sumangali Cable Vision
Sun TV 1.5 million Tamil Nadu
Ortel Ortel Communications
500,000 Orissa
The Indian regulator, TRAI formulated a policy in 2003 to introduce Conditional Access Systems (CAS) in order to enhance consumer choice and reduce under-declaration of revenues (this impacts the government as it charges an entertainment tax on cable revenues). The CAS policy required cable operators to invest in infrastructure and develop set top boxes with addressability and channel operators were required to encrypt their pay channels.
The implementation of the policy had been held up by a series of legal challenges and disagreements between broadcasters and cable operators. However, with the launch of competing DTH services, the climate has changed and in May 2006, the Indian High Court ordered the government to implement the CAS policy following a legal petition from a leading cable operator, Hathway Cable. All cable operators are now marketing CAS-enabled set top boxes.
The Indian regulator, TRAI has mandated a revenue sharing agreement between MSOs, LCOs and channel operators. LCOs keep 100% of the basic subscription fee of Rs 77 per month and for encryoted channels, the revenue is shared among broadcasters, MSOs and cable operators in the ratio of 45%, 30% and 25%, respectively.
Launch of DTH
The first launch of DTH services was by the media entreprenuer, Subash Chandra in late 2003 and by end 2006, its service, Dish TV had 1.7 million subscribers. Star TV launched its DTH service, Tata Sky in a joint venture with India’s Tata group. The other major players expected to launch a DTH offering are the Indian group Reliance Infocomm (it is one of India’s leading telecoms operators) and the south Indian television broadcaster Sun TV. There is strong evidence that, in the short term, operators will primarily compete on price.
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Figure 68) DTH platforms
DTH platform Owned by Launch No. of subscribers
Notes
Dish TV Zee Telefilms October 2003
1.7 million 150 channels
65% of subscribers are in rural areas
DD Direct Doordarshan September 2004
3.5 million Free to air service (charge of Rs 2,100 to purchase set top box)
Tata Sky Tata Group, Star TV
August 2006 ~ 500,000 60 channels.
Blue Sky Magic Reliance - ADAG
2007 n.a.
Sun Direct TV Sun TV 2007 n.a. Focused on southern states with local language content
The Indian regulator has confirmed that all channel operators must make their channels available on a non-discriminatory basis to all DTH platforms. This has eliminated the opportunity for DTH platform operators to compete on the basis of exclusive content and will increase the importance of price as a key market differentiator.
Foreign investment
The rules regarding governing foreign investment in television have gone through a number of revisions and reinterpretation in the last five years.
Figure 69) Key foreign direct investment rules
Sector FDI Cap Notes
Satellite broadcasting
49% For television channels uplinking from India provided that they meet the regulator’s programme and advertising code.
Cable networks 49% 51% must be held by Indian citizens
News channels 26%
DTH services 20% Foreign investment of up to 49% is allowed (when financial investment and non-resident Indian investment is included)
Terrestrial television
- No private operators allowed
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The mid 1990s saw the first major foreign investment in television when the private equity group Warburg Pincus made an investment in the Indian television production company, UTV.
Figure 70) Key foreign investments in television
Date Country of investor
Investor Investee Notes
Sep-06 USA Walt Disney Hungama TV (UTV) UTV divested kids channel.
Aug-05 UK 3i Nimbus Communications Television sports and entertainment production company. Acquired 33% stake for Rs 2 billion
Jun-05 USA CNBC Asia Television Eighteen CNBC had 51% stake in news channel joint venture with TV-18 (has reduced stake to 10% in 2004)
Jan-05 USA Star TV Balaji Telefilms Acquired 26% stake
Apr-05 UK Reuters Times of India Reuters acquired a 26% stake in a the Times Now English news channel
Sep-02 USA GE Capital TV Today Network Acquired 6.2% stake
Jul-02 Singapore CDP Asia Sony Entertainment TV Acquired 10% stake for US$100 million
May-02 USA Discovery Communications
Sony Entertainment Television
Discovery acquired a 26% stake in a new channels’ venture with Sony.
Apr-02 Singapore CDP Asia UTV Group Acquired 31% stake (exited in 2004)
Dec-01 USA Time Warner Zee Telefilms Time Warner acquired a 26% stake in a new channels’ venture with Zee.
Sep-00 USA Star TV Hathway Cable Acquired 26% stake.
Apr-00 USA Intel Capital IndusInd Media & Communications
Acquired 3.5% stake in the Hinduja Group’s Cable TV operations
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B.Newspapers
Key developments and trends
� Circulation is growing (especially for local language newspapers). Adspend is acheiving double digit growth
� Suffered from lack of investment during the television boom years of the 1990s.
� Significant ‘price-based’ competition in major cities (recent launch of Hindustan Times in Mumbai), especially among English language and business titles.
� Some foreign investment in last two years (Wall Street Journal, Independent News & Media)
The Indian newspaper sector has a long and vibrant history with many newspapers well into their second century of publication; many of India’s leading media companies have their origins in the newspaper business. In recent years, the sector has experienced strong competition from television and has suffered from a lack of editorial investment and fierce cover price competition.
Approximately 1,900 daily newspapers are published of which half are in regional languages and of the remainder 42% are in Hindi and 8% in English. Revenue figures vary by source (Adex, ZenithOptimedia, PWC); our estimate for advertising revenues in 2006 is Rs 65 billion (US$1.45 billion) with circulation revenues at Rs 22 billion (US$490 million).
Figure 71) Estimated newspaper adspend
Note: based on average of three sources (Adex, PWC, ZenithOptimedia)
29,069 29,178 30,432
47,073
54,120
81,643
90,478
65,370
104,105
-
20,000
40,000
60,000
80,000
100,000
120,000
2000 2001 2002 2003 2004 2005 2006 2007 2008
Rs
milli
ons
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Classified advertising accounts for approximately 15% of newspaper adspend.
Figure 72) Newspaper adspend by type (2006)
Circulation and readership
Newspaper readership in India is still much lower than in many other countries; this is primarily due to a relatively low literacy rate of 71% and poor distribution in rural areas. The sector can expect strong volume (readership, circulation) growth in the long term.
Figure 73) Weekly reach of newspapers 34
In 2006, the daily reach of newspapers grew by 6.6% to 203 million people. Intense competition between newspapers has held down cover prices to a minimal level (Rs 1 – Rs 5). This will also have helped to increase circulation and reach.
Display advertising
50%
Government20%
Classifieds15%
Other15%
1.0%
21.3%
35.9%
11.2%
63.9%
70.7%
5.4%
64.8%
76.2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
National dailies Regional dailies Any daily newspaper
% R
each
of a
dult
popu
latio
n (2
005)
India China Germany
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Figure 74) Circulation growth (1996 – 2005)
Figure 75) Readership of leading newspapers
Readership ('000's) Language 2005 2006 % Change
Dainik Jagran Hindi 21,244 21,165 -0.4%
Dainik Bhaskar Hindi 17,379 20,958 20.6%
Eenadu Telugu 11,350 13,805 21.6%
Lokmat Marathi 8,820 10,856 23.1%
Amar Ujala Hindi 10,469 10,847 3.6%
Hindustan Hindi 10,557 10,437 -1.1%
Daily Thanthi Tamil 9,445 10,389 10.0%
Dinakaran Tamil 1,485 9,639 549.1%
Rajasthan Patrika Hindi 8,651 9,391 8.6% Malayala Manorama Malayalam 7,985 8,409 5.3%
Times of India English 8,092 7,502 -7.3%
Mathrubhumi Malayalam 6,412 7,415 15.6% Ananda Bazar Patrika Bengali 7,215 7,295 1.1%
Gujarat Samachar Gujarati 6,780 6,416 -5.4%
Punjab Kesari Punjabi 4,427 6,302 42.4%
Dinamalar Tamil 4,877 5,977 22.6%
Divya Bhaskar Gujarati 5,162 5,490 6.4%
Sakal Marathi 4,191 5,066 20.9%
Newspaper publishers can be divided into those with a strong national reach and those with a regional focus. National players tend to focus on Hindi and English language publications and business newspapers. Leading groups include the Times of India group, Business Standard, The Hindu group and Hindustan Times Media. Regional groups tend to publish in vernacular languages and have a strong local franchise; leading regional players include the Deccan Chronicle group and the Malaya Manorama group.
English language newspapers capture half of all newspaper adspend compared to only 14% of readership. This is due to their audience profile which is typically wealthier than that of Hindi and local language newspapers.
-
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
1995 1996 1997 1998 1999 2000 2001 2002/03 2003/04 2004/05
Dai
ly c
ircul
atio
n
-5%
0%
5%
10%
15%
20%
25%
30%
% c
hang
e
Circulation % change
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Figure 76) Market shares by newspaper language
Readership Adspend
Foreign investment
The rules governing foreign direct investment in print media were relaxed in 2002; foreign direct investment of up to 26% is now allowed in newspaper businesses. Since then there have been a number of substantial investments by both trade and financial investors.
Figure 77) Key foreign investments in newspapers
Date Investor Investee Notes
2007 Dow Jones HT Media Joint launch of Mint Newspaper.
20% of content sourced from Wall Street Journal (no equity investment)
2004 Independent News and Media (INM)
Dainik Jagran Publisher of the Hindi language paper, Dainik Jagran
26% stake acquired by INM
2004 Dow Jones & Co. Times of India DJ acquired a 26% stake in a joint ventures with Times of India to publish an Indian version of the Wall Street Journal.
2004 Citicorp HT Media Acquired 8.3% stake for Rs 690 million.
2003 Henderson Capital HT Media Acquired 15.4% stake for Rs 1 billion.
2003 Financial Times Business Standard Business Standard is a leading English language business newspaper.
14% stake acquired by Pearson (FT’s parent)
In June 2005, the Indian government also lifted the ban on the printing of foreign newspapers in India. The ban was an anomaly as foreign newspapers could be sold in India but not printed. It was challenged by the International Herald and Tribune (part of the New York Times group) which began printing in Hyderabad. In January 2007, HT Media launched a business newspaper in partnership with the Wall Street Journal.
English14%
Others43%
Hindi43%
Hindi25%
English49%
Others26%
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C.Radio
Key developments and trends
� Immature market with strong long term growth potential. Licencing rules in the first wave of licencing created major problems with many licence winners unable to pay fees.
� Phase 2 of commercial FM licencing was successfully handled and the sector looks in a healthy state.
� Significant competition exists in major cities (but overall market growth is also substantial).
� Foreign investment is limited to 20%
The three major segments of the Indian radio market are: the public service broadcaster, All India Radio; the commercial players who broadcast on FM; and the satellite radio broadcaster, Worldspace.
The commercial radio market emerged in the late 1990s and by 2006 was worth approximately Rs 4.2 billion (US$95 million). The last twelve months have seen the launch of many new local FM radio stations in both the major metros and small cities across India. Growth prospects for the sector are extremely good as the industry is still immature in terms of content, reach and share of adspend.
The rapid growth in the number of new stations has meant that competition for both audiences and advertisers is extremely intense. Many of the new entrants to the radio sector have extensive media assets in areas such as television, film and publishing; this has meant that they have been able to utilise their existing media to promote their new stations.
Radio licencing and regulation
Whilst public sector broadcasting began in the 1920s, commercial radio was only liberalised during the late 1990s with the licencing of FM radio. The first phase of FM licencing (Phase 1) occurred in 1998/99 with a second phase (Phase 2) in late 2005; a third phase due in late 2006 has been delayed.
The Phase 1 licencing regime was based on a licencee paying an upfront fee and an ongoing fixed annual fee with the highest bidder winning the licence. This approach led to bidders making unrealistic bids and as a result, many stations were never launched. Oof the 108 licences available, 40 were awarded and 21 actually started broadcasting.
A review of the licencing approach led to a change in methodology for Phase 2. Bidders submitted bids on the basis of a one time entry fee (OTEF) and a “percentage” share of actual revenues (approximately 4% of annual revenues). For Phase 2, 245 licences were allocated to 38 broadcasters across 87 cities. The licencing process generated Rs 8,955 million in fees for the Indian government.
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Figure 78) Phase II licencees
Company One Time Entry Fee (Rs millions) No. of licences
Adlabs Films 1,603 45
Entertainment Network (India) 1,301 25
South Asia FM 757 22
Kal Radio 991 18
Synergy Media Entertainment 512 17
Music Broadcast 495 15
BAG Infotainment 50 10
Century Communication 40 9
Pan India Network Infravest 113 8
Shri Puran Multimedia 79 8
Malar Publication 243 7
Radio Today Broadcasting 286 7
Radio Mid-Day West (India) 729 6
HT Music and Entertainment Company 752 4
Positive Radio 8 4
Rajasthan Patrika 75 4
The Mathrubhumi Printing & Publishing Co 167 4
The Malayala Manorama Co 156 4
Asianet Communications 35 2
Chinar Circuits 8 2
Eastern Media 10 2
Indigo Mass Communication 105 2
Kushal Global 19 2
Neutral Publishing House 14 2
PCM Cement Concrete 9 2
Pudhari Publication 11 2
Ananda Offset 50 1
Clear Media India 133 1
Gwalior Farms 9 1
ITM Software and Entertainments 5 1
Muthoot Finance 80 1
Nagpur Music Broadcast 15 1
Nasik South Asia FM 26 1
Noble Broadcasting Corporation 50 1
Purvy Broadcasts 3 1
Raneka Fincom 10 1
Singla Property Dealers 5 1
Syntech Infomatics 4 1
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Figure 79) Twenty largest licence bids (Phase II)
City State Company Bid Amount (Rs mn)
Mumbai Maharashtra HT Music and Entertainment 352.00
Delhi Delhi Radio Mid-Day West (India) 314.20
Delhi Delhi Adlabs Films 281.16
Mumbai Maharashtra Adlabs Films 281.16
Delhi Delhi HT Music and Entertainment 280.00
Bangalore Karnataka Entertainment Network (India) 216.00
Bangalore Karnataka Kal Radio 200.00
Hyderabad Andhra Pradesh Entertainment Network (India) 180.00
Chandigarh Chandigarh Adlabs Films 156.10
Bangalore Karnataka Radio Mid-Day West (India) 154.20
Hyderabad Andhra Pradesh Kal Radio 150.00
Pune Maharashtra South Asia FM 140.06
Lucknow Uttar Pradesh South Asia FM 140.06
Delhi Delhi Clear Media India 133.30
Bangalore Karnataka Adlabs Films 129.60
Chennai Tamil Nadu Radio Mid-Day West (India) 122.70
Ahmedabad Gujarat South Asia FM 120.06
Ahmedabad Gujarat Synergy Media Entertainment 115.00
Chandigarh Chandigarh Synergy Media Entertainment 105.11
Delhi Delhi Radio Today Broadcasting 102.60
Phase 3 of the licencing process was due to be initiated in late 2006, but the government has decided to take a more cautious approach and has delayed the licencing of any new stations until Phase 2 stations are up and running and in a financially stable situation.
Restrictions on broadcasters
The Ministry of Information and Broadcasting (MIB) has refused to allow commercial radio stations to carry news and current affairs programming. This may be an indirect response to protect the public service broadcaster’s lead role in this type of programming.
In addition to this, radio broadcasters are limited to owning one licence per city and can not own more than 15% of all the licences available.
The broadcasters
Until recently, radio in India was dominated by the public service broadcaster, All India Radio (AIR). AIR’s domestic service broadcasts in 24 languages from 223 transmitters across India on SW, MW and FM frequencies. Its primary channels are a national channel and two FM services (FM rainbow and FM Gold).
Leading players in the commercial radio market include Adlabs Radio, Mid-day media group, Times of India group, Sun TV and the India Today group.
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Satellite radio
The subscription-based satellite radio broadcaster, Worldspace broadcasts 40 channels of western and Indian popular and classical music. Its service is priced at Rs 1000/6 mths or Rs 1,800 p.a. and the company has approximately 140,000 subscribers.
Worldspace is attempting to strengthen its market position through focusing its marketing efforts on a small number of major cities, acquiring exclusive access to key sports rights and opening retail outlets in shopping malls to market direct to customers.
Competitive environment
Audience measurement is a relatively new phenomenon in Indian radio. The most reliable survey is the Indian Listenership Track produced by the media research company, ORG-MARG. It conducts two waves of research each year.
Its latest data suggests that the commercial players have rapidly captured share from the public service broadcaster. We believe that the market is still too immature to develop a reliable view on the audience and financial performance of the various commercial players.
Figure 80) Radio reach, Mumbai (Wave 2, 2006)
3.4
7.6
13.3
18.3
31.1
35.5
49.3
0 10 20 30 40 50 60
AIR Primary
AIR FM1 107.1
AIR FM2 100.7
Radio One 94.3
RED FM 93.5
Radio City 91.1
Radio Mirchi 98.3
% Daily reach
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Figure 81) Radio reach, Delhi (Wave 2, 2006)
Figure 82) Radio reach, Kolkata (Wave 2, 2006)
0.4
7.2
20.1
33.7
34.4
69.1
0 20 40 60 80
AIR Primary
AIR FM1 107.1
AIR FM2 100.7
RED FM 93.5
Radio City 91.1
Radio Mirchi 98.3
% Daily reach
1.3
6.1
7.6
12.5
14.5
19
68
0 20 40 60 80
AIR Primary
AIR FM2 100.7
POWER FM 107.8
AIR FM1 107.1
AAMAR FM 106.2
RED FM 93.5
Radio Mirchi 98.3
% Daily reach
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Investment activity
The current rules on foreign investment are designed to allow investment (up to 20%), but to maintain financial and editorial control within India. The rules specify that the single largest shareholder has to own at least 50% and must be an Indian entity (unless it is a bank or other financial investor). In addition to this, foreign investors can not be directors or have any say in the management of the station. These rules may not be particularly attractive to foreign investors today, but we believe that they will eventually be relaxed.
To date foreign investment has been relatively limited, though the UK groups, BBC Worldwide and Virgin Radio have both entered the market. Whilst BBC Worldwide acquired a 20% stake in its partner (Mid-day), Virgin Radio formed a ‘consulting parnership’ with HT Media’s radio operation.
Figure 83) Key investments in radio
Date Investor Investee Notes
2007 Balfour Capital Noble Broadcasting Acquired 20% stake.
2007 Star TV Music Broadcasts (Private) Limited
Acquired 20% stake from India Value Fund.
2006 BBC Worldwide Radio Mid-Day West (India)
Acquired 20% stake
2006 Value Labs, NDTV and Astro Consortium
Today Broadcasting Limited
Acquired 100% of India Today’s radio operation for Rs 1 billion.
2005 India Value Fund Music Broadcasts (Private) Limited
Private equity fund acquired a 75% stake in MBL – which owns the “Radio City” stations.
The stake was acquired from PK Mittal of the Ispat Group (he retains a 25% interest).
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D.Consumer magazines
Key developments and trends
� Relatively small segment of the Indian media landscape.
� Headline figures suggest readership is declining slightly (in our view, many domestic publications are of poor quality), but this may be due to the fact that the increasing number of foreign publications are not included in the readership surveys
� Expect significant growth in medium term, as foreign players enter the market and middle classes spend an increasing proportion of their income on leisure and luxury goods.
The Indian consumer magazines sector can be segmented into three broad categories: domestic titles targeted at the ‘mass market’; domestic titles which are effectively Indian imitations of European and American titles; and Indian versions European and North American titles. The first category dominate in terms of readership and reach, but the latter two categories reach a more upmarket, urban audience.
In our opinion, the consumer magazines sector is still underdeveloped in terms of quality of product and also many niches which are commonplace in developed markets are still in very immature or non-existent in India.
The sector generated revenues of approximately Rs 10.5 billion (US$235 million) of which Rs 65.6 billion (US$ 195 million) was adspend. The National Readership Survey (NRS) indicates that magazine readership is declining, with an annual decline of 9.3% to 68 million readers in 2006. This apparent decline may be due to the fact that many of the recently launched titles are not part of the NRS study.
Figure 84) Readership of leading consumer magazines
Title Language Frequency Owner 2006
India Today (Hindi edition) Hindi Weekly India Today Group 10,700,000
Saras Salil (Hindi) Hindi Fortnightly Delhi Press Group 7,139,000
India Today (English edition) English Weekly India Today Group 5,150,000
Kungumam Tamil Weekly Kungumam Publications (Sun TV)
3,347,000
Kumudam Tamil Weekly Kumudam Publications 3,698,000
Sarita Hindi Weekly Delhi Press Group 2,820,000
Grihashobha Hindi Weekly Delhi Press Group 3,788,000
Swati SVP Weekly N.a. 3,408,000
Vanitha Malayalam, Hindi
Weekly Malaya Manorama group 4,115,000
Malaya Manorama Malayalam Weekly Malaya Manorama
group 2,351,000
Balarama Malayalam Weekly Malaya Manorama group
2,526,000
Ananda Vikatan Tamil Weekly Vikatan Group 2,426,000
Cricket Samrat English Monthly 2,370,000
Readers Digest 2,321,000
Grihalakshmi (Malayalam) 2,312,000
Nirogdham 2,034,000
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Among the leading titles, India Today is a weekly news and current affairs publication and Saras Salil is a women’s lifestyle magazine. Many of the biggest selling titles are in regional languages, which continue to maintain (if not build) their readership; the title, Kungumun is a Tamil language publication largely read in the state of Tamil Nadu.
Leading magazine publishers include the Living Media group (publisher of India’s highest readership title, India Today and Indian versions of a number of foreign titles), Cybermedia (focused on consumer technology titles), Infomedia (publisher of special interest magazines) and the Times of India group (range of women’s and other general interest titles).
Foreign investment
Foreign ownership up to 100% is now allowed (up from a 76% maximum). The highest profile investment to date has been that of the BBC’s commercial arm, BBC Worldwide; its joint venture with the Times of India group took over publication of 29 titles from Times of India and provided a route to market for a range of the BBC’s UK magazine formats. The BBC is the third largest consumer magazine publisher in the UK and has a large number of formats which may work well in the Indian market; these include Good Homes, Good Food, Easy Gardening, Homes and Antiques.
Figure 85) Key foreign investments in consumer maga zines
Date Investor Investee Notes
November 2003 Haymarket publishing
Sorabjee Automotive Publishing
Acquired 50% stake. SAP is the publisher of Autocar India.
October 2003 BBC Worldwide
Times of India Joint venture called Worldwide Media in which each party has a 50% stake.
August 2005: Launch of the BBC title, Top Gear in India.
Figure 86) Recent foreign magazine launches
Publisher Titles Notes
Conde Nast Traveller
Vogue (Late 2007)
Advertising and marketing partnership with India Today Group
Dennis Publishing Maxim Published under licence by Media TransAsia
Time Out Time Out Published by Paprika Media under licence from UK publisher
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E. Business, Scientific and academic media
Key developments and trends
� Immature market with strong growth potential. As non-agricultural sectors of the Indian economy develop, there will be an increasing demand for sector-specific business information (periodicals, online, events).
� Sectors with critical mass include agriculture, technology, energy and pharmaceuticals.
� Foreign ownership up to 100% is now allowed.
The future development of the Indian business media market (print and online publishing and events) will proceed in line with the development of key sectors of the economy. In sectors such as IT and pharmaceuticals where India has well established companies, business publishing is also well established. In emerging sectors such as organised retail and infrastructure, business media is less well developed. Another key trend in the sector has been the entry of foreign publishers. They have adopted a dual strategy of offshoring jobs to India (in order to cut costs) and also of launching Indian editions of key publiscations.
The sector is highly fragmented with dozens of niche players publishing a handful of magazines each. The sector is estimated to be worth Rs 4.5 billion (US$100 million) across publishing and events in 200635, with revenues generated from advertising, subscriptions and sponsorship.
The larger players tend to be active in those sectors of the Indian economy which have grown rapidly in the last decade; examples include Cybermedia (technology) and Exchange4media (advertising services). Other leading groups include Jasubhai group (IT, pharmaceuticals, energy) and Infomedia.
Many of the magazine publishers also operate exhibitions as ‘brand extensions of their magazines.
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Figure 87) Business magazines published by domestic publishers
Sector Title Owner
Automotive Auto Monitor Infomedia India
Chemical & Process Industry Chemical Engineering World Jasubhai Group
Chemical Products Finder Jasubhai Group
Chemical World Infomedia India
Modern Food Processing Infomedia India
Modern Plastics & Polymers Infomedia India
Photo Imaging Infomedia India
Construction and Architecture Indian Architect & Builder (IAB) Jasubhai Group
Energy & Exploration Offshore World Jasubhai Group
IT Digit Jasubhai Group
Network Computing Jasubhai Group
Computer Reseller News Jasubhai Group
Skoar! Jasubhai Group
Manufacturing Technology Industry 2.0 Jasubhai Group
Electrical and electronics Infomedia India
Modern Machine Tools Infomedia India
Search Infomedia India
Media and advertising Pitch Exchange4media
Impact
Outsourcing Global Services Cybermedia
Pharma & Biotechnology Pharma Bio World Jasubhai Group
BioSpectrum Cybermedia
Modern medicare Infomedia India
Modern Pharmaceuticals Infomedia India
Property Realty Plus Exchange4media
Telecoms Voice&Data Cybermedia
Textiles Modern Textiles Infomedia India
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Foreign investment
Foreign ownership up to 100% is now allowed, but much of the focus of foreign groups has been in establishing their own outsourced publishing operations.
Figure 88) India strategies of leading business and professional publishers
Investor Notes
Reed Elsevier Partnership with Infomedia India (December 2005)
Thomson Thomson Scientific publishes pharmaceutical regulatory intelligence on India from India
Wolters Kluwer Wolters Kluwer Health published journals in India (10 journals are published in an Indian edition)
VNU (AC Nielsen) Owns leading Indian media research firm ORG-MARG
TNS Market research operation
United Business Media Acquired medical publisher in 2005
Launching PR Newswire in India
Reuters 26% stake in television news channel
Over 300 journalists based in Bangalore
Springer Science & Media Operates a scientific publishing outsourcing operation in India
In terms of foreign direct investment into Indian companies, there have been a small number of investmebts and joint ventures. This is partly due to the lack of Indian companies with a strong track record (established products with a good revenue history). We believe that this will change in the next five years as the sector matures.
Figure 89) Key foreign investments in business publ ishing
Date Investor Investee Notes
2005 United Business Media
Mediworld Medical publisher
2004 Ringier Infomedia Limited Joint venture to launch new titles in India.
Number of specialist titles to be launched in 2005 (target sectors include: plastics, packaging, food processing, textiles and pharmaceuticals).
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F. Outdoor advertising
Key developments and trends
� Long established industry which initially grew in an unregulated manner. Suffered in the late 1990s from court decisions (billboards were banned in Delhi as they were deemed to be a traffic hazard).
� Demand is extremely buoyant.
� Long term growth likely to be strong (as India’s transport and civic infrastructure develops).
� Foreign players such as Clear Channel and JCDecaux have made a successful entry, winning key contracts in major cities.
The Indian outdoor advertising industry was worth Rs 10 billion (US$230 million) in 2006; growth in the largest cities has been very strong (Delhi achieved 18-20% and Mumbai achieved 10-12%). Some industry estimates sugggest that the market may be worth up to Rs 20 - 25 billion (reliability of market size data is poor, because of the large number of small ‘unregulated’ players who service local markets). Billboards account for approximately two thirds of the market by value, with bus shelters accounting for a fifth. The recent strong growth has been off the back of buoyant consumer marketing spend and a scarcity of prime outdoor advertising sites; this has led to both substantial increases in volume of space and price inflation.
Leading players include Selvel Vantage group, a leading Kolkata-based group with a presence across India, Posterscope and a number of foreign players such as News Outdoor, Clear Channel and JCDecaux.
Retail and transport infrastructure will be major g rowth driver
Growth in India’s retail and transport (road, rail and airport) infrastructure is likely to support the growth of the outdoor sector over the next 5-10 years. In cities such as Delhi, the development of the Metro rail system has seen a considerable amount of new hoarding space become available. In the most recently awarded contract (for the Barakhamba-Dwarka line of the Delhi metro), 47,000 square feet of space were made available for a 5 year term for Rs 250 million and a share of revenues.
Legal and regulatory challenges
The outdoor sector has faced a number of legal and regulatory problems over the last 10 years. This has largely been because of the environmental problems associated with the enormous growth in unlicenced billlboards in the major cities. In November 1997, the Indian Supreme Court ordered the Delhi local authority to remove all billboards which could prove a safety hazard from the city. This had a negative impact on the industry in the late 1990s, but also led to significant efforts to improve the quality and location of billboards. Prices for prime locations today are five times what they were in the late 1990s.
More recently, in Tamil Nadu, the state government is considering banning billboards in the city of Chennai.
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Foreign investment
There are no specific rules regarding foreign direct investment in the outdoor advertising market. The US-based outdoor group, Clear Channel entered India in 1999 in Mumbai. In 2004, it merged its operations with those of the Mumbai-based Mid-day group and eventually acquired the whole operation. Today it operates 100 billboards in 8 cities and is also active in street furniture (in Bangalore). The French group, JC Decaux also entered the market through winning a contract in Delhi.
Figure 90) Key foreign investments in outdoor adver tising
Date Investor Investee Notes
2006 News Outdoor (News Corporation)
n.a. Contract for bus shelters in Bangalore.
2006 JCDecaux n.a. 15 year contract wth Delhi council to build and operate 200 bus shelters. Advertising revenues to be shared (with Delhi Council receiving 10-20% share).
2004 Clear Channel
Mid-day Outdoors
Merger of outdoor advertising operations.
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G. Filmed entertainment
Key developments and trends
� Largest film industry in the world (based on number of productions).
� Positive outlook because of: increased demand from pay TV for premium content; growth in multiplexes and family visits to the cinema; significant overseas revenues from the Indian diaspora.
The Indian filmed entertainment industry generated revenues of Rs 58.5 billion (US$1.3 billion) and produced close to 1000 films in 2006. Indians managed 3 billion cinema visits - almost twice as many as the USA and three times as many as the rest of Asia.
Figure 91) Key statistics on Indian filmed entertai nment
Box office revenues 2005: US$1.2 billion
2006: US$1.3 billion
No. of movie releases ~ 1000
Revenue mix
Domestic box office 75%
Overseas box office ~ 10%
Music and other revenues ~ 10%
Video 5% plus
The structure of the Indian filmed entertainment is radically different to that of Hollywood. Both film production and distribution are highly fragmented with successful individual producers attracting the best talent, biggest budgets and gaining the best theatrical distribution. The nature of the industry is changing; as film budgets grow and the value of premium film content increases, a more ‘corporate’ approach to both production and distribution is emerging.
Today the industry is benefiting from huge changes in the Indian media industry with growth in multiplexes, satellite and cable distribution and home entertainment. Key growth drivers include:
� Growth in multiplexes. The construction of new multiplexes is continuing at a rapid pace across India. Their development has been supported by the enormous number of new shopping malls in major cities and the availability of tax breaks. Multiplexes have benefited the filmed entertainment sector through bringing in higher ticket prices and greater transparency.
� Pay TV. The emergence of DTH and CAS technology in cable TV is helping film producers and rights owners to better obtain subscription revenues. In the past, cable operators would under-declare revenues and there was significant signal piracy.
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� Growth in DVD ownership. Household ownership of DVD players is growing rapidly and should help film companies develop a new valuable revenue source.
� International demand. As important is the increasing demand from the 20 million citizens of the Indian diaspora in Europe, Asia and America. Revenues from these markets are likely to account for almost half of the industry's revenues in the next five years and this internationalisation of Bollywood is leading to growth in overseas investment in Indian films.
Leading players in film production and distribution include Yashraj films, Mukta Arts, UTV, Balaji Telefilms, Adlabs, and Shringar Cinema.
Figure 92) Key statistics on Indian filmed entertai nment
Company Notes
Film production
Balaji Telefilms Television and film production
Key provider of content to Star TV
Yashraj films Big budget film producer (managed by director, Yash Chopra)
Adlabs Films Film production, distribution and multiplex development
Mukta Arts Big budget film producer (managed by director, Subhash Ghai)
Percept Picture Company Big budget film producer
UTV Disney is a shareholder and UTV has formed various production and distribution agreements with international studios (including Sony and Fox)
Zee Telefilms Leading commercial broadcaster who has entered the film production business (also operates 400 cinema screens across India)
Film distribution and multiplexes
PVR Leading developer and operator of multiplexes
Shringar Cinemas Active in distribution and multplex development
Eros International International film distribution
Cinemax Multplex operator
Foreign investment
Foreign direct investment in Indian filmed entertainment has been relatively small to date; much of it has been from high net worth individuals. However, the increasingly high profile of Indian films in Europe and North America is leading to an increase in more strategic investment.
US studios who are also active in television broadcasting are beginning to move into the production and distribution of Hindi language films in India and North America.
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Figure 93) Investments by Holllywood studios
Company Active in Indian broadcasting
Film activities
Sony Yes, through Sony Entertainment Television
Partnership with UTV
News Corporation Yes, through Star TV Agreement with Balaji Telefilms and UTV
Time Warner Yes Rumoured to be considering equity investment in Indian film producer
MSM Yes None
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H.Music
Key developments and trends
� Industry is experiencing declining revenues, partly due to a high level of music piracy
� Future prospects depend on the success of the digital download market
The Indian music industry generated revenues of approximately Rs 10 billion (US$220 million) in 2006; this is a considerable decline over the previous four years. The sector is unique (compared to other coutries) in generating a large volume of its revenues from sales of film soundtracks. The revenue decline is largely due to high rates of piracy, which have worsened with the availability of online music services.
Music download services
The profitability of the Indian music industry will largely depend on how it tackles the opportunities and challenges presented by the online music. Providing music download services to India’s 120 million mobile subscribers as ringtones and full tracks presents a large commercial opportunity.
Key to driving this growth is the availability of low cost mobile handsets with mp3 capability. Industry estimates suggest that in 2006, there were 300 million downloads (music, ringtones and video clips) generating Rs 4.5 billion (US$100 million) in revenues.
Companies such as Indiatimes 8888 and Soundbuzz have developed large audio download services. Mobile operators are also offering download services; Airtel charges Rs 20 for a full song download and Rs 30 for a music video download.
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I. Classified directories
Key developments and trends
� Market has been held back by difficult regulatory environment in the telephone directories sector.
� Positive outlook as demand for services (e.g. health, legal and wedding services) grows among India’s middle classes. Standalone yellow pages have been successful in major cities.
� Online and directory enquiry services account for very small share of usage and revenues.
� Strong opportunity for foreign investors.
The Indian directories market is worth Rs 2.5 billion (US$50 million) in 2006. The industry is growing at 15%-20% per annum, broadly inline with the general growth in adspend in India.
The sector has three broad product categories: official telephone directories (published by the incumbent telecoms operators such as BSNL or by third parties under contract); consumer ‘independent’ yellow pages directories; and business to business, trade directories.
The official telephone directories are published in English and regional languages; there usefulness is limited as distribution is poor and frequency of publication can be at least two years.
The yellow pages directories market is lead by three major players (Indiacom, Infomedia and Getit) who each command approximately 20-25% market share. In 2004, the three largest publishers had a combined circulation of approximately 8.76 million copies across 50 locations in 16 Indian states (out of a total of 28 states). Assuming that these three players have 75% market share, the total circulation is approximately 11.7 million copies. The fourth major player is NextGen Publishing; it has been established by the former CEO of Infomedia, Hoshang Bilimoria and the Indian publishing group, Forbes Asia.
In the business to business directories sector, there are many small publishers of whom some focus on a particular industry niche.
Regulatory environment for telephone directories
The Indian telecoms regulator, TRAI conducted a consultation process in late 2004 in response to a growing awareness that the rapidly growing telecoms market was not being served effectively by the current licencing regime. Many major markets do not have an up to date directory (or in some cases, no directory at all) and the rapid growth in mobile subscribers had created new challenges in terms of effective number coverage.
In August 2004, TRAI said:
“The requirements for publication of printed Telephone Directory and Directory Enquiry Services have increased manifold in the present multi -operator multi-service scenario, with intense competition coupled with a very high growth rate, so have the issues/ problems related to provision of directory services.”
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In March 2005, TRAI published a set of recommendations but there has been no subsequent movement on the implementation of these recommendations.
Foreign investment
There are no restrictions on foreign investment in the classified directories sector. There was an investment by the Italian directory publisher, Seat in the early 1990s; this has been divested.
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J. Online media
Key developments and trends
� Very small market (revenues and penetration) with enormous growth potential.
� Most global players have a strong Indian presence (Google, Yahoo, Monster, Ebay).
� Mobile Internet offers strong opportunity (as mobile phones have considerably higher penetration than PCs).
The online media sector accounts for a very small portion of media consumption and adspend, but presents a very significant growth opportunity. Even today, with only 8.1 million subcribers, the sector is very competitive with both traditional media companies and ‘pure online players’ competing aggressively for the relatively small audience and revenues.
Internet adspend
Internet advertising revenues are estimated at approximately Rs 1.6 billion (US$40 million) in 2006, with annual growth of between 50% - 70%. In addition to adspend, the online matrimonials sector generates approximately Rs 360 million (US$8 million) in subscription revenues.
Figure 94) Online media advertising revenues
The biggest source of online advertising is recruitment, accounting for two thirds of adspend. Thie reflects the fact that the Internet’s early development in India was heavily driven by the explosive growth of the IT industry in the 1990s; its demands for new employees and the ease of online recruitment, ensured that the most successful entrants to the online media space were job sites.
420
1,070
1,620
2,180
-
500
1,000
1,500
2,000
2,500
2004 2005 2006 2007
Onl
ine
adsp
end
(Rs
mn)
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Figure 95) Online media revenues by type (2006)
E-commerce market
India’s e-commerce market is estimated to be worth Rs 11.8 billion (US$260 milllion) in 2005/06. Industry estimates suggest that the market should acheiive over 50% annual growth over the next 3-5 years.
Internet usage and penetration
There are approximately 25 million Internet users; household penetration is still low (8.1 million subscribers36), with cybercafé and work Internet access still very important.
Figure 96) Growth in Internet penetration
The importance of mobile services
The relatively high penetration of mobile services in india (approximately 120 million users) will ensure that mobile networks become an extremely important channel for online media services.
Recruitment60%
Financial services
17%
Travel9%
Telecoms4%
Others10%
950
3,0403,420
80 190
903
1,557
7,709
4,550
3,640
6,703
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2000 2001 2002 2003 2004 2005 2006
No
. of s
ub
scri
ber
s (t
ho
usa
nd
s)
No. of subscribers No. of broadband subscribers
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Online strategies of traditional media companies
Traditional media companies have entered the online media space largely through the development of online versions of their print products. English language media (newspapers and classified directories) have been the most active in the online space; traditional local language media companies are only now beginning to enter this space as they are challenged by local language online offerings pure new start ups.
Of the traditional players, the Times of India group has been among the most successful. Its portal, indiatimes.com has established itself as top 3 player in the online recruitment space.
New Internet players
A number of ‘pure play’ Internet companies also emerged in India; in areas such as online recruitment (Naukri.com), dating (Shaadi.com), auctions (Bazee.com) and information portals (rediff.com), Indian companies successfully launched Indian equivalents of better known US players.
Figure 97) Major domestic players
Company Notes
Infoedge � The leading online classifieds company.
� Operates three websites targeting the recruitment, property and matrimonials sectors.
Sify � Portal, with strong focus on business news
Rediff � Portal (large overseas Indian audience)
People Group � Owner of leading matrimonials website, Shaadi.com
Foreign entrants
Many of the major US-based online players have invested heavily in their Indian offerings.
Figure 98) Foreign entrants
Company Notes
EBay � Leading online auction site in India
� Acquired the domestic player, Baazee,com for US$50 million
Monster � Entered the market in 2001 and is now the leading online recruitment site in India
MSN � Portal launched in 2000 is now available in English and a range of regional languages
Google � Partnership with the leading mobile operator (Bharti) to offer mobile search
Yahoo � Entered the market in 2000
� Has launched local language services for email and chat
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Foreign investment
Most of the major global Internet players have been active in India since the late 1990s; many started with small operations and have bolstered these through acquiring domestic players.
Figure 99) Key foreign investments in the Internet sector
Date Niche Investor Investee
Sep-06 Online Media Sequoia Capital Fund
Sep-06 Online film rental Matrix Partners Seventymm
Aug-06 Matrimonials Yahoo & Canaan Partners Bharat Matrimony Group
Jun-06 Travel Kleiner Perkins Caufield & Byers and Sherpalo Ventures
Cleartrip.com
Jun-06 Classifieds Kleiner Perkins Caufield & Byers and Sherpalo Ventures
InfoEdge
Mar-06 Mobile gaming Sequoia Capital Nazara Technologies
Mar-06 Matrimonials Sequoia Capital Shaadi.com
Feb-06 Travel Sequoia Capital Travelguru.com
Dec-05 Portal Sequoia Capital Times Internet
Nov-05 Portal Infinity Capital Sify.com
Aug-05 Classifieds Westbridge Capital Partners, Sequoia Capital
Indiatimes.com
Jun-05 Travel NorthWest Ventures Capital, Reliance Capital and TV18
Yatra.com
May-05 Travel Soft Bank Asia Infratructure Fund MakemyTrip.com
Aug-04 E-commerce Ebay Bazee.com
May-04 Recruitment Monster Jobsahead
Nov-04 Gaming TOM Online Indiagames.com
Sep-04 Gaming 3i & BV Capital Indiagames.com
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K.Marketing services
Key developments and trends
� World class marketing services industry.
� Global players are well represented.
� Will benefit from strong growth in adspend; however, profitability is under threat due to competition and pressure from customers
India has a highly skilled marketing services industry fully integrated into the global market. Prior to the 1990s, the sector was dominated by domestic players. Today, all the leading players are either owned by global players or have them as major shareholders.
Figure 100) Leading Indian advertising agencies
Agency Shareholding Key clients
Ogilvy & Mather WPP 74%, others 26% Asian Paints, BP/Castrol, Cadbury, Gillette India,
McCann Erickson India
McCann Erickson Worldwide Inc 92.8%, others 7.2%
Coca-Cola , Hindustan Lever, Johnson & Johnson, L'Oreal , General Motors,
Lowe Lintas
The Interpublic Group, USA 49%,
Local Shareholders 51%
Unilever, Idea Cellular, Britannia, LG, Maruti Udyog, ITC, Bajaj Auto, J&J , The Hindu
JWT JWT Pepsico, DYC, Hero Honda Motors, Glaxo Smithkline,
Leo Burnett Leo Burnett P&G , Coca-Cola , Heinz India, McDonald's ,
Mudra Communications
Indian 90%, DDB Worldwide 10% The Godrej Group - Godrej Consumer Products & Godrej Agrovet
Grey Worldwide Grey Global Group 100% Ministry of Tourism, ONGC, Gujarat Ambuja, Chhattisgarh Tourism, Haier Appliance
FCB Ulka FCB Worldwide 51% Tata Motors, Tata Teleservices, Whirlpool, Amul, Hero Honda, ICICI Bank
Contract Advertising
JWT Fareastern, HTA HSBC, NIIT, Cadbury , Dabur, Tata Group, Shoppers' Stop, JK Industries, Madura Garments , Wipro, Asian Paints
Rediffusion DYR Diwan Arun Nanda 30%, Ajit Balakrishnan 30%, Y&R INC 20%, Dentsu Inc 20%
Bharti, Colgate, Ioch, Onida, Citibank, Diwgent Media, Tata Motors
RK Swamy BBDO N.A. Dr Reddy's Labs, Hawkins, ICI Dulux, Indian Airlines, Mercedes-Benz
Saatchi & Saatchi Foreign Holdings 80%, Local Management 20%
TVS Victor, Ariel, Head & Shoulders, Speed & MAK / Bharat Petroleum
iB&W Communications
Mukesh Gupta 80%,
Nutan Gupta 20%
Skoda Auto India, Victorinox, RC Cola International
Euro RSCG Havas 62.5%,
Indian Shareholders 37.5%
Reckitt Benckiser, Sony Entertainment, HDFC Bank
Bates Enterprise WPP Group (majority ), Mohammed Khan
Nokia, Tata AIG, Dabur, ITC, IDBI, Indian, ABP Group, Titan & World of Titan, HLL, Star News
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Agency Shareholding Key clients
Ambience Publicis Publicis Procter & Gamble - Vicks, Marico Industries, Hindustan Lever
SSC&B Lintas Lintas India (an Interpublic Group company)
MTNL, BSNL, UB Group, Abbot Labs, Vardhaman, ICICI Direct, Cybermedia, Essar Group, Videocon, Taurus Mutual Fund, PSI (Rajasthan), Bank of Nova Scotia
Everest Brand Solutions
: Rediffusion DYR 100% LIC, Parle Products , Elder Pharma, Ansal Properties
Dentsu Marcom Dentsu Inc 74%
Mogae Consultants 26%
Honda Motorcycles & Scooters India, Honda Siel Cars India, Canon India
Interface IPG 51% Mahindra Auto, Mahindra Farm Equipment, Club Mahindra, Blue Star
The leading international groups have been actively building a presence in India through both organic growth and acquisitions.
Figure 101) Recent foreign investments in marketing services
Date Investor Investee Notes
Jan-05 Aegis Percept Group Acquired 51% stake in Percept group (which
offers outdoor advertising services).
Jan-06 WPP (Bates Asia) Sercon Indian marketing services group
Feb-05 Omnicom Kidstuff Promotions
Acquired by Omnicom’s Indian subsidiary, Mudra Communications
Jun-06 IMS Group Candid Below the line marketing services Jun-06 M & C Saatchi Dhar & Hoon Marketing services
Jun-06 Parexel International
Synchron Research Services Indian market research group
Aug-05 WPP (Bates Asia)
Enterprise Nexus Acquired 74% stake for Rs 400 million.
Aug-06 Gfk Mode Group Market research services
Nov-05 Publicis Solutions Integrated Marketing services
Dec-06 WPP Ray + Kesavan Design agency
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VI) COMPANY PROFILES
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A.Adlabs Films
Activities: Film production and processing, multiplex cinemas and radio
Ownership: Listed on BSE and NSE
Controlled by Anil Ambani (and his Reliance ventures)
Recent strategic developments: Expanded into radio, but this business will be spun off into a separate company in 2007
Market data
Market codes: Reuters: ADLF.BO
Bloomberg: ADLF@IN
Current price: Rs 464.95
52 wk low: Rs 171.10
52 wk high: Rs 518.40
Share price performance (Last 12 mths)
Adlabs is one of India’s leading filmed entertainment companies. The group has recently expanded into commercial radio, but is expected to spin off its radio activities into a separate company during 2007. Adlabs is a publicly listed company but is majority owned by the Anil Ambani controlled Reliance businesses (Reliance Capital and other subsidiaries).
Adlabs is active in all areas of filmed entertianment from finance and production to distribution (the company owns a number of cinemas across India). The company’s strong presence in Mumbai has helped it to become the market leader in film processing for Bollywood studios.
Figure 102) Adlabs Films, summary financials
y/e March (Rs millions) 2003 2004 2005 2006 CAGR
Revenue 781 829 875.5 1,132.1 13%
% Change 28% 6% 6% 29%
Net profit 166.5 176.4 206.7 263.1 16%
% Change 61% 6% 17% 27%
% Margin 21% 21% 24% 23%
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Historical development
2006 � April - Plan announced to spin off radio operations into a publicly listed company
� January – Successfully bids for new commercial radio liecnces across India
2005 � December - FCCB37 offering worth US$100 million. Funds to be invested in business expansion.
� July - Reliance capital acquired 51% stake for Rs 2,600 billion.
� November – partnership with Indian film director Ram Gopal Verma
2001 � Development of first Multiplex complex in Mumbai
2000 � Public listing on BSE
1978 � Adlabs Films founded by Manmohan Shetty and Vasanji Mamania.
Activities
Adlabs activities can be categorised as follows:
Film Processing
Adlabs is the leading film processing company in India with a volume market share of approximately 41% (2004). The company expanded its activities in film processing to include psot-production services such as special effects and editing; this was primarily achieved through the acquisition of a minority stake (6%) in a company called Prime Focus.
Film Exhibition
Adlabs is the pioneer of Multiplex cinemas in India building its first mulitplex (Wadala) in Mumbai in 2001. Since then the company has built multplex complexes in three other locations in Mumbai, Nasik and Pune. In addition to this it has built an Imax cinema at Wadala. At end 2005, the company had 34 screens; this number is expected to increase to 104 screens by 2008.
Film Production
Adlabs entered film production in 2001 and has since launched a number of high profile big budget Bollywood films (including crossover films such as The Rising). The company has a strong relationship with one of india’s leading directors Ram Gopal Verma.
Digital film distribution
Adlabs has recently established a joint venture (MADEL) with the Indian media company Mukta Arts to launch a new form of digital film distribution. The technique is based on recording films onto encrypted hard discs and ditributing them to cinemas in small cities and towns. The service should allow more rapid film distribution and reduce piracy.
Radio
Adlabs Films successfully bid for commercial radio licences across India in early 2006 and has the potential to become one of a handful of operators with effective national coverage. The radio business will be spun off into a separate publicly listed company in 2007.
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Management and ownership
Figure 103) Adlabs Films, key shareholdings
Shareholder % of capital (June 2006)
Reliance Land Private Limited 51.76 Reliance Capital Limited 3.15 Manmohan Shetty 18.32 BSMA Limited 4.40 Arisaig Partners PTE (Limited) 4.44 DB Fund (Mauritius) Limited 1.07 SBIMF- Magnum Sector Funds Umbrella Emerging 1.51
Figure 104) Adlabs Films, key management and direct ors
Name Description
Manmohan Shetty
Board of Directors and Founder, Also serving as the Chairman of the National Film Development Corporation
Vasanji Mamania
Co founder, Responsible for Digital and Multiplexes division.
Pooja Shetty
Board of Director, Head of Film Exhibition and new business acquisitions
Karan Johar
Board of Director, Successful Bollywood director
Gautam Dosi
Board of Director, Group President of Anil Dhirubhai Ambani Group
Brij Mohan Sharma
Chief Financial Officer
Suresh Bharadwaj
Chief Executive Officer (Exhibitions)
Praveen Nischol Independent Producer and Director.
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Financials
Adlabs has achieved a strong performance across all areas of its operations.
Figure 105) Adlabs Films, financials
y/e March (Rs millions) 2003 2004 2005 2006 CAGR
Revenues Film processing 566 572 625.7 657.3 5% Multiplexes 174 220 195 252.8 13% Film production - 2 10.9 71.2 497% Film distribution - - - 53.1 n.a Other revenues 40 34 43.6 97.5 34% Total revenues 781 829 875.5 1,132.1 13% Profit Before Tax Film Processing & Traded Goods 228 260 298.8 277 6% IMAX and Multiplexes 49 51 28.9 2.44 -63% Film Production - - 10.9 99.05 n.a. Interest charges -20 -14 -15.8 -8.87 n.a. Total PBT 266 297 321.7 369.6 11%
Figure 106) Adlabs Films, Segment analysis
Revenue (2005)
Film processing
58%Multiplexes
22%
Film production
6%
Film distribution
5%
Other revenues
9%
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B.Anand Bazaar Patrika
Activities: English and Bengali newspaper publishing in West Bengal
Ownership: Privately owned (controlled by Sarkar family)
Recent strategic developments: Expanded into news broadcasting and film production
Anand Bazaar Patrika (ABP) is the leading newspaper publisher in the West Bengal region. The Kolkata-based company publishes a wide range of newspapers and magazines in Bengali and English. Key titles include the flagship dailies, AnandaBazar Patrika and The Telegraph; these are the largest circulation newspapers in Bengali and English respectively in West Bengal.
The flagship title “Anandabazar Patrika” was first published in 1922 and distributed in West Bengal and present day Bangladesh. Further titles were launched in the 1930s and the first magazine was pulished in 1940. In the mid 1970s, the group entered the English language newspaper market with The Telegraph. It also launched a business newspaper, Business Standard
Figure 107) ABP, key publications
In 2004, the group entered the news broadcasting market with the acquisition of a 76% stake in MCCS for Rs 750 million. MCCS provides Star TV with its news
Name Circulation Readership Language Frequency
Anandabazar Patrika 950,000 6,090,000 Bengali Daily newspaper
The Telegraph
320,000 (No. 1 in West Bengal)
13.4 million English Daily newspaper
Prabasi Anandabazar Bengali Weekly newspaper (overseas market)
Desh
82,000 600,000 Bengali Bi-monthly magazines
Business World 140,000 320,000 English Weekly magazine
Anandamela
n.a. n.a. Bengali Weekly childrens magazine
Anandalok
98,700 n.a. Bengali Bi-monthly film news magazine
Sananda
170,000 n.a. Bengali Bi-monthly women’s magazine
Sports world n.a. n.a. English Sports periodical
Sunday n.a. n.a. English English news periodical
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content and StarTV also owns the remaining 24% equity. In 2005, the group launched a Bengali news channel, Star Ananda in partnership with Star TV.
In October 2006, ABP invested in Kaleidoscope Entertainment (a media company controlled by the leading Indian film producer, Bobby Bedi); the joint venture will create content for a range of platforms, including mobile services.
Management and ownership
Aveek Sarkar (CEO) and his family own the group.
Figure 108) ABP, key management and directors
Name Description
Aveek Sarkar Editor-in-Chief and CEO
Bijit Kumar Basu Printer and Publisher
Amitava Dutta Vice President
Deepak Pramanik General Manager- Advertising/Marketing
Sanjay Prasad General Manager- Circulation
Bijit Kumar Printer and Publisher- Desh Magazine
Madhumita Chattopadhyay SBU Head
Devasree Chadha Senior Marketing Manager- National sales magazine
Sandip Mitra Chief Manager circulation
Pradeep Gairola General Manager (Western Region).
Previously served as Head of International Operations at Mid-day Multimedia.
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C.Balaji Telefilms
Activities: Television and film production company
Ownership: Publicly listed (major shareholders are Star TV and the Kapoor family)
Recent strategic developments: Expanded into film production in 2005
Market data
Market codes: Reuters: BLTE.BO
Bloomberg: BLJT@IN
Current price: 126.25
Mkt. Cap.
52 wk low: 95.00
52 wk high: 196.95
Share price performance (Last 12 mths)
Balaji telefilm is one of India’s leading television and film production companies. The company’s core business is the production of Hindi language fiction programming (accounted for 82% of revenues in 2005). Balaji Telefim’ is the leader in drama programming with its key serials (Kyunki Saas Bhi Kabhi Bahu Thi and Kahaani Ghar Ghar Ki) achieving some of the highest ratings in Indian television.
The listed company is controlled by the Kapoor family (one of the leading acting and prodution families in Bollywood). Ekta Kapoor is the creative Head and has a very strong reputation in Indian television.
Figure 109) Balaji Telefilms, summary financials
y/e March (Rs millions)
2003 2004 2005 2006 CAGR
Revenue 1,874.5 1,844.4 2,016.9 2,890.6 15.4%
% Change 65.7% -1.6% 9.4% 43%
Net profit 574 554 412.9 594.2 1.1%
% Change 97.8% -3.5% -25.4% 44%
Net Margin 30.6% 30% 20.4% 20.5%
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Television content production
Balaji Telefilms produces commissioned and sponsored television content in Hindi and South Indian regional languages. This contributes 93% of total revenues (2005). The majority of the programming targets Indian house wives and deals with woman-related themes. The company launched five new series in 2006, which led to a 23% increase in output volume to 2,113 hours (2005: 1,720).
Film Production
Balaji Telefilms ventured into the film production segment in 2005 with two successive releases. The first movie produced “Kya Kool Hai Hum” was a moderate success while the second movie flopped at the box office.
Historical Development
Balaji Telefilms started in 1994 when it was commissioned to produce the Hindi language series “Mano Ya Na Mano” for the Zee TV network. In 1998, the company won its first commission from the public service broadcaster, Doordarshan. In 1999, the company produced its first non-Hindi content for the tamil language broadcaster, Sun TV.
In 2000, the company listed on the Bombay Stock Exchange and merged with Nine Broadcasting India (controlled by Kerry Packer).
2006 � August – Established wholly owned subsidiary in Middle East for overseas television production.
2004 � August- SEBI launched internal trading investigation.
� August- Star TV acquired 21% stake for Rs 1.55 billion.
� July- Ventured into non fiction content production.
2002 � April- Chairman divested 10.11% stake.
� April- Launch of new Hindi language programmes on Sony, Star and Zee television networks.
Management and ownership
Balaji Telefilms was founded by the Kapoor family, whose members control 42% of the equity. Star TV have a 26% stake.
Figure 110) Balaji Telefilms, key shareholdings
Shareholder % of capital 9June 2006)
Asian Broadcasting F2 LLC (Star TV) 25.99% Shobha Kapoor 15.24% Ekta Kapoor 14.92% Jeetendra Kappor 8.54% Tusshar Kapoor 3.11% T Rowe Price International INC A/c T Rowe Price
6.06%
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Figure 111) Balaji Telefilms, key management
Name Description
Shobha Kapoor Managing Director and Chief Executive Officer
Jeetendra Kapoor Chairman (Non-Executive)
Ekta Kapoor Creative Director
Akshay Chudasama Director
Merger and Acquisitions and Consumer protection.
Dhruv Kaji
Director
Served as Finance Director in Raymond Limited and Pinesworth Holding Limited
Tusshar Kapoor Director.
Devarajan Chief Financial Officer
Alpa Shah Company Secretary
R.Karthik President Strategy and Business Development
Rajesh Pavithran Vice President (Marketing)
Pradeep Kuman Sarda Chairman of Sarda Group
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Financials
For the last financial year (end March 2006), Balaji Telefilms had total revenues of Rs 2,890.6 million and Net profit of Rs 594.2 million; year-on-year Net profit growth of 44%. Commissioned programming contributes 84% (2005:82%) of total revenues.
Overseas revenues (from UAE and USA) increased 166% to Rs 29 million. Sponsored programming revenues increased by 12% to Rs 345.6 million due to increased demand from new regional channels (such as DD Chandana).
Figure 112) Balaji Telefilms, financials
y/e March (Rs millions) 2003 2004 2005 2006 CAGR
Revenue by type
Commissioned Programming 1,600.9 1,453 1,648.2 2,349.9 13.5%
Sponsored Programming 258.7 325.77 308.4 345.6 10%
Revenue by channel
Star, Sony, Zoom, MTV, Hungama 1,601.1 1,453 1,648.2 2,349.9 13.5%
Sun TV n/a n/a 8.9 37.6 n.a
Gemini TV 128.2 204.7 158.0 117.1 -3%
Udaya TV 130.2 112.1 83.0 116.2 -3.7%
DD Network n/a 9 28.5 12.9 20%38
Surya TV n/a n/a 29.8 58.7 n.a
Revenue by language
Hindi 1,600.9 1,462 1,676.6 2,361.6 13.7%
Telugu 128.3 204.7 158 117.1 -3%
Kannada 130.2 112.1 83 117.5 -3.3%
Malayalam n/a n/a 29.8 58.7 n.a
Tamil n/a n/a 8.9 37.6 n.a
Other revenue sources 15.1 65.63 60.6 198 134%
Total Revenues 1,874.5 1,844.4 2,016.9 2,890.6 15.4%
Net profit 574 554 412.9 594.2 1.1%
Net Margin 30.6% 30% 20.4% 20.5%
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D.Business Standard
Activities: Publisher of business newspaper and a range of consumer
magazines
Ownership: Privately owned (controlled by Kotak Mahindra banking group)
Recent strategic developments: Financial Times acquired a 13.85% stake.
Launched a number of new magazines.
Business Standard publishes the second largest circulation English language business newspaper, Business Standard in India. The newspaper is published six days a week and has a strong market presence in the four major business cities (Mumbai, Delhi, Kolkata and Ahmedabad). In addition to this, the group has expanded into business and consumer magazines.
The company is privately owned (the largest shareholder is the financial services group, Kotak Mahindra). The newspaper was initially established by the Anandabazar Patrika Group in 1975. The Kotak group acquired a 51% stake in 2001 and the paper adopted a content localisation strategy. In 2004, the UK-based Financial Times group acquired a 13.85% stake (for Rs 141 million) diluting Kotak to 40%.
Figure 113) Business Standard, summary financials
y/e March (Rs millions)
2002 2003 2004 CAGR
Total Revenue 355.8 360.5 411.9 7.6% % Change 1.32% 14.25% Net profit (loss) (64.6) (56.2) (63.5) 0.85% % Change 13% -13% Net Margin -18.2% -15.5% -15.4%
Business Standard newspaper
One of the leading English business dailies in India; with a daily readership of approximately 100,000; the market leader is the Economic Times, which has a readership of 900,000. The partnership with the Financial Times includes content syndication and has allowed the paper to offer better international coverage than its competitors.
The newspaper also has a website which offers both free and paid-for content.
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Periodicals
Business Standard publishes a variety of periodicals in the automotive, lifestyle and business categories. Titles include Indian & Asian economy, BS Motoring, Indian Management, Asian Management Review and The Gateway.
Management and ownership
Figure 114) Business Standard, key shareholders
Shareholder % of capital (March 2006)
Kotak Mahindra Investment Limited 39.98% Great Eastern Shipping Corporation 28% Mr. Uday Kotak 4% Financial Times 13.85%
Figure 115) Business Standard, key management and d irectors
Name Role
T.N. Ninan Editor and Publisher
Served as Editor of Economic Times, Business World and Executive Editor of India Today.
Akila Urankar President and Printer and Publisher of Mumbai Edition
Sandeep Chadda Printer and Publisher of Ahmedabad Edition
Shiv Kr. Srinivasan Printer and Publisher of Hyderabad Edition
Salil Dutta Printer and Publisher of Delhi Edition
Siddhartha Gupta Printer and Publisher of Kolkata Edition
Amitava Sinha Printer and Publisher of Chennai and Banglore Edition
Rakesh Shah Vice President- Advertisement
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E. CyberMedia
Activities: Consumer magazines publisher and media outsourcing
services
Ownership: Listed on the BSE and NSE (large stake owned by Gupta family)
Recent strategic developments: Entered media outsourcing sector
Aqcuired minority stake in IT publishing company in USA
Market data
Market codes: Reuters: CYBM.BO
Bloomberg: CYBM@IN
Current price: 98.30
52 wk low: 50.00
52 wk high: 141.00
Share price performance (Last 12 mths)
CyberMedia is a leading business and consumer magazines publisher. The company’s titles are focused on sectors such as IT, new media and biotechnology. Most titles are available in both print and online versions. Cybermedia has recently expanded into areas such as events and exhibitions and education services.
The company was established by Pradeep Gupta in 1982. CyberMedia listed on the Bombay and National Stock Exchanges in June 2005, but the founding Gupta family retain a 43% stake (June 2006).
Figure 116) Cybermedia, summary financials
y/e March
(Rs millions) 2003 2004 2005 2006 CAGR
Revenue 492.7 589.7 681.3 836.4 19%
% Change 19.7% 15.5% 22.7%
EBITDA 38.3 72.3 89.9 123.2 47%
% Change 88.7% 24.3% 37%
Net profit 12.8 37.5 43.1 60.2 67.4%
% Change 193% 15% 39.6%
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Historical development
Cybermedia launched in 1962, with the computer magazine, DataQuest. In 1991, the company entered the events market with a technology exhibition. In 1994, the company entered the telecoms sector with the publication of Vocie & Data magazine. Its online offering was launched in 1996 and in 2001, the company established an educational institute specialising in the technology field.
2006 � February – Acquisition of minority stake (20%) in Sx2 Media Labs LLC for US$1.0 million.
� February – Launch of B2B monthly BPO sector based periodical “Global Services” in joint venture (50:50) with Uk publisher, United Business Media.
� January – Launch of Asian biotechnology magazine, BioSpectrum Asia.
2005 � December – Joint venture with ExpoMedia covering event management in the telecommunication and life science sectors.
� June- Listed on Bombay and National Stock Exchanges.
� March 2005 – Joint ventures with US IT sector jobsite, Dice.com.
Activities Periodicals
CyberMedia publishes 12 technology magazines, 3 consumer titles and 9 business to business titles. Core business to business sectors are biotechnology, information technology and telecommunications. The magazines have a combined readership of 1.2 million39 (June 2006); the DataQuest title contributes 37.5% of total publishing revenues (2006).
Figure 117) Cybermedia, key magazine titles
Title Segment Industry Date of Launch
Readership 40 % market share 41
DataQuest B2B Information Technology 1982 114,000 51%
PCQuest B2C Information Technology 1987 333,000 43%
Voice & Data B2B Telecommunication 1994 105,000 68%
Living Digital (former Computers@Home) B2C Life Style 1996 52,000 6%
DQ Channel India B2B Trade and Business
1999 n.a 8%
DQ Week (4 editions) B2B Information Technology 1996 n.a 14%
BioSpectrum B2B Biotechnology 2003 n.a 80%
CyberMedia offers online version of all its print magazines through its www.ciol.com portal. The website has 300,000 subscribers, 700,000 unique visitors and 26 million page views per month42.
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Television content
Launched in 1995, CyberMedia has produced 150 hours of information technology and career development television content; it has mainly been broadcast on the public service broadcaster “Doordarshan”.
Market Research
CyberMedia offers market research services in association with the US research company, IDC. The company provides customised, syndicated and case study researchin sectors such as telecommunications, information technology and biotechnology.
Events
CyberMedia manages high technology based events, exhibitions, conventions and seminars. The company has entered into a 10 year agreement with the UK-based company Expomedia on international events management in the life sciences and telecoms sectors.
Job and E-commerce portals
CyberMedia formed a joint venture with the US-based IT online recruiment company Dice. This venture operates an IT sector job site and portal called cyberastro.com.
Digital services
CyberMedia offers multimedia production services via Cyber Multimedia Limited. The subsidiary offers digital products such as Internet tool kits and games for teenagers and also produces CDROMs for third parties.
Media Education
CyberMedia in association with the training company Kaleidoscope established the School of Convergence; this offers education and training courses in mass media
Content management
CyberMedia ventured into content management services such as BPO, digital assets management, data conversion and production in June 2005.
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Financials
For the last full year (to March 2006), CyberMedia had total revenues of Rs 836.4 million and Net profit of Rs 60.2 million; year-on-year Net profit increase of 39%. Advertising revenues contributed 60% of revenues. Growth came from publishing, market research and online activities.
Figure 118) Cybermedia, financials
y/e March
(RS million) 2004 2005 2006 CAGR
Revenue Publishing 309.6 384.8 559.6 34.4% Online 29.1 39.3 55.7 38.4% Research 61.0 83.1 121.8 41.3% Events 80.6 62.5 22.7 -46.9% Content services - - 14.9 Job Board services (Dice) - - 1.8 Digital 109.5 111.7 60.0 -26.0% Other - - 16.7 Total Revenues 589.7 681.3 836.4 19.1% Net profit Publishing 25.8 33.5 n.d Online 2.7 2.9 n.d Research 3.6 4.8 n.d Events 1.46 0.1 n.d Content services - - n.d Job Board services (Dice) - - n.d Digital 3.9 1.8 n.d Other - - n.d Net profit 37.4 43.0 60.2
Figure 119) Cybermedia, segment analysis
Revenue (2006)
print publishing
65.6%
online6.5%
market research
14.3%
events2.7%
other10.9%
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Management and ownership
The Gupta family retain a 43% stake.
Figure 120) Cybermedia, largest shareholders
Shareholder % of capital (June 2006)
Pradeep Gupta 24.89% Sudha Bala Gupta 9.58% Dhaval Gupta 3.45% Anuradha Gupta 3.15% Kirti Gupta 1.22% Fidelity Trustee Company Private Limited A/C Fidelity Equity Fund
8.99%
Yukti Securities Private Limited 4.32%
Figure 121) Cybermedia, key management
Name Position
Pradeep Gupta Chief Managing Director Rohit Chand Director Ashok Agarwal Director, Served as Managing Director of SQL Star K.S Mehta Director
25 years of experience in software consultancy and computer education Shyam Malhotra Executive Director and Editor in Chief of Cybermedia Publication Krishan Kant Tulshan Director V.C Gupta Chief Financial Controller Manhar Kapoor Company Secretary Hosiediar Ghaswalla President of Marketing and Sales (Cybermedia India Limited) E Abraham Mathew President of Online (Cyber India Online Limited) Pankaj Nath Vice President (Cybermedia Events Limited)
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F. Dainik Bhaskar
Activities: Newspaper publisher
Ownership: Privately owned (controlling stake with promoter)
Recent strategic developments: Ongoing geographic expansion of Dainik Bhaskar newspaper
Considering acquisition of publisher of Prabhat Khabar
The Dainik Bhaskar publishes India’s second largest readership newspaper. The Hindi language Dainik Bhaskar daily title has a readership of 20.9 million (growth of 20.6% on 2005). The newspaper’s core market is the state of Madhya Pradesh; from there it has expanded its presence into Rajasthan and Punjab (in late 2006).
In 2003, the group launched the Gujarati daily, Divya Bhaskar. This title has established a readership of 5.5 million (NRS 2006). The company also publishes a Hindi language lifestyle periodical called 'aha zindgi' (this life).
Dainik Bhaskar is a major shareholder (alongside the Essel group) in the publisher of the English language daily, DNA. DNA was launched in Mumbai in 2005 and is currently expanding its geographic presence into a number of other major cities (currently publish the business section in Indore and Ahmedabad, under the DNA Money brand).
Management and ownership
In May 2006, the private equity firm Warburg Pincus acquired a 7.8% stake for Rs 1.5 billion.
Figure 122) Dainik Bhaskar, key management
Name Position
Ramesh Chandra Agrawal Chairman
Sudhir Agrawal Managing Director
Girish Agrawal Director
Sanjeev Kotnala Marketing director
Pawan Agrawal Director
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G. Deccan Chronicle
Activities: Newspaper publisher based in Andhra Pradesh
Ownership: Listed on the BSE and NSE (large stake owned by Reddy family)
Recent strategic developments: Entered broadcast news services and film production
Market data
Market codes: Reuters: DCHL.BO
Bloomberg: DECH@IN
Current price: 864.15
52 wk low: 300.00
52 wk high: 922.00
Share price performance (Last 12 mths)
The leading English newspaper publisher in the state of Andhra Pradesh; its flagship title “Deccan Chronicle” is th fourth largest readership English newspaper in India. The group’s other leading newspaper title is the Telugu language Andhra Bhoomi. The group signed an agreement with the New York Times for publishing The International Herald Tribune in India.
The company went public through listing on Bombay and National Stock Exchanges in November 2004.
Figure 123) Deccan Chronicle, summary financials
(Rs millions) 2003 43 2004 2005 2006 CAGR
Revenue 219.4 1,223.7 1,702.8 3,522.1 150%
% Change 458% 39% 107%
Net profit 36.5 175.0 320.5 668.7 161%
% Change 379% 83% 108%
Net Margin 16.6% 14.3% 18.8% 19%
Historical development
The Deccan Chronicle’s predecessor company was established in 1938. In 1977, the Reddy family took over the publishing house and expanded into lcoal language
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publications with the launch of “Andhra Bhoomi.” This was followed by the launch of 5 new editions of both the Deccan Chronicle and Andhra Bhoomi.
2006 � September- FCCB offering worth US$54.02 million.
� August- Investment of Rs 200 million for new Deccan Chronicle editions.
� August- Board of Directors approve 9-14% FII44.
2005 � September- Acquisition of Odyssey retail outlets for Rs 612 million.
� May- Entered into Chennai newspaper market; with 100,000 copies.
� May- Majority stake in Asian Age for Rs 171 million (US$4 million)
� March- Launch of new Trichy and Coimbatore editions.
2004 � November- Listed on Bombay and National Stock Exchanges
� June- Merger of Deccan Chronicle Private Limited and Nandi Publishers Private Limited
� June- Agreement with New York Times for publication of “The International Herald Tribune”.
2003 � Launch of Nellore edition of Deccan Chronicle and Andhra Bhoomi
Activities
Deccan Chronicle Holdings activities can be categorised as follows:
Newspapers
Deccan Chronicle is the leading English newspaper in Hyderabad with total circulation of 400,000 and a readership of 1.64 million (2005)45. The company also publishes the Telugu language “Andhra Bhoomi” newspaper which has a circulation of 33,400(2H 2003). Online versions of the two newspapers are also published.
The group acquired the Asian Age newspaper; this title is popular among the NRI community.
Periodical
The company publishes a leading Telugu weekly periodical (circulation of 34,000). The periodical was launched in 1977 and is second to Swati Sapari Vara Patrika (circulation:240,000) in Andhra Pradesh.
International
Deccan Chronicle has distribution agreement with New York Times (USA) for The International Herald Tribune.
Online
Deccan Chronicle Holdings host Cardiovalens.com life sciences based portal providing in-depth information related to cardiology. The portal is divided into two categories: Cardiologists and Consumers.
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Financials
For the last full year (end March 2006), Deccan Chronicle Holding, had total revenues of Rs 3,308 million and Net profit of Rs 668 million, year-on-year Net profit increase of 108%. Figure 124) Deccan Chronicle, financials
y/e March
Rs millions 2003 2004 2005 2006 CAGR
Revenue by source Net Sales 219.2 1,169.3 1,656.4 3,308.7 145% Other 2.2 54.4 46.4 213.4 352% Total Revenues 221.4 1,223.7 1,702.8 3,522.1 150% Net profit 36.5 175.0 320.5 668.7 161%
Figure 125) Deccan Chronicle, Key acquisitions
Date Company Notes
September 2005 Odyssey Buy-out price: Rs 612 million.
Odyssey is leading retail chain offering books, toys, music and FMCG productsin Southern India.
May 2005 Asian Age Buy-out price: Rs 171 million.
This acquisition gives Deccan access to cosmopolitan domestic and international markets such as Mumbai, Delhi, Banglore, Kolkata and London.
Total shareholding: 90% (previously held 23% of equity)
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Management and ownership
Figure 126) Deccan Chronicle, key management and di rectors
Name Description
T. Venkattram Reddy Chairman
T. Vinayak Ravi Reddy Managing Director Joined the enterprise in 1988.
P.K. Iyer Director (Finance)
T Urmila Reddy Non Executive Director
T Manjula Reddy Editor-Features
K.Gangu Naidu General Manager (Finance)
K.C. Rangaswamy General Manager (Marketing)
M.J Akbar Chief Editor
The Reddy family members control approximately 70% of the equity.
Figure 127) Deccan Chronicle, key shareholdings
Shareholder % of capital (June 2006)
T Venkattram Reddy 34.96% T Vinayak Ravi Reddy 34.96% ILFS 4.12% Prudential ICICI 2.8% Karvy Stock Broking 2.65%
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H.Dish TV India
Activities: DTH platform operator
Ownership: Publicly listed. Majority owned by Zee Telefilms
Recent strategic developments:
IPO in January 2007.
Dish TV (currently known as ASC Enterprises) is India’s first commercial DTH service. Launched in 2005, Dish TV is a subscription-based Pay TV offering approximately 160 channels (both domestic and international). The company was spun out of the Indian commercial broadcaster, Zee Telefilms in January 2007 as part of a restructuring of the media group into four separate listed companies. The service is targeting subscribers in urban areas, and a third of its subscribers are in the three industrialised states of Maharashtra, Gujurat and Karnataka.
Dish TV has built up a network of over 10,000 distributors across India.
Figure 128) Dish TV, summary financials
(Rs millions) 2006 1H 2007
Revenue 818 485
Operating Profit -751 -591
Profit after tax -790 -767
Dish TV is well positioned to emerge as a leader in the Pay TV sector in India. It has benefited from first mover advantage (among the commercial operators) and has prefential access to the content and marketing clout of its sister companies, Zee Entertainment and Zee News. The fourth sister company, Wire and Wireless India is a leading cable TV operator.
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I. Eenadu Group
Activities: Diversified media group. The leading player in the Telugu
language market.
Ownership: Privately owned (controlling stake with promoter)
Recent strategic developments: Ongoing geographic expansion of Eenadu newspaper
The Eenadau group (Ushodaya Enterprises Ltd) is a leading Telugu language media company with activities in publishing and broadcasting. The company’s flagship business is the Eenadu newspaper which is the leading daily newspaper in Andhra Pradesh (selling more copies than all its local competitors combined). It is also a major player in local language broadcasting, with its network of 13 channels.
In February 2007, the US private equity firm, Blackstone Group acquired a 26% stake for US$275 million.
The Eenadau group’s promoter, Ramoji Rao is currently involved in a legal dispute with the Andhra Pradesh government. The government launched a legal action against the group after its newspaper published a story alledging that improper land transactions were made by the family of the Chief Minister of th state of Andhra Pradesh.
Newspapers and periodicals
The Eenadu daily newspaper is the leading Telugu language newspaper and the third highest readership title in India. Its 2006 audited daily readership was 13.8 million (a 21.6% increase on 2005). An online version of the newspaper is also published in Telugu.
The company also publishes a number of Teugu language periodicals.
Figure 129) Eenadu group, periodicals
Title Genre Circulation (2005) Frequency
Annadata Farming 166,145 Monthly
Sitara Movies 25,933 Weekly
Vipula Womens 7,119 Monthly
Chatura Womens 8,300 Weekly
Television
Eenadu broadcasts a 12 local language satellite channels across India. The lead channel is ETV Telugu (channels are also broadcast in Marathi, Kannada, Urdu, Oriya and Gujurati).
Film production and distribution
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Eenadu operates one of India’s largest film studio complexes, Ramoji Film City. The studio is built on an 1,666 acre site in Andhra Pradesh. The group also has two other subsidiaries, Mayuri Film Distributors and Ushakiron Movies.
Management and ownership
The group has two major shareholders: the promoter with 74% and the private equity firm, Blackstone with 26%.
Figure 130) Eenadu group, key management
Name Position
Ramoji Rao Chairman
G Srinivas Company Secretary
I. Venkat Director of Advertising
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J. Entertainment Network
Activities: Radio broadcaster (under the Radio Mirchi brand), outdoor
advertising and event management
Ownership: Listed on the BSE and NSE (large stake owned by Times of India group)
Recent strategic developments: Currently launching lareg number of new radio stations.
Market data
Market codes: Reuters: ENIL.BO
Bloomberg: ENIL@IN
Current price: 309.95
52 wk low: 161.00
52 wk high: 354.90
Share price performance (Last 12 mths)
Entertainment Network (India) ENIL is the largest commercial radio broadcaster in India; it is also active in outdoor advertising and event management. The company’s radio stations operate under the Radio Mirchi brand; it operates 10 stations in India’s major cities including the four metros of Delhi, Mumbai, Kolkata and Chennai. By July 2007, the company plans to launch an additional 22 stations. In 2005, ENIL expanded into outdoor advertising and event management.
The company is publicly listed on the BSE and NSE, but its parent company (Times of India group) controls a 71% stake.
Figure 131) Entertainment Network, summary financia ls
y/e March
(Rs millions) 2002 2003 2004 2005 2006 CAGR
Total revenues 47.6 209.8 569.5 762.3 1,406.7 133% % Change 341.2% 171.3% 33.8% 84.5% Net profit -146.4 -402.2 -293.3 -179.3 212.4 Net Margin -307.8% -191.6% -51.4% -23.5%
Historical development
ENIL spun-off from the parent company Bennett Coleman & Company Limited in June 1999. The company ventured into radio broadcasting; with launch of Radio Mirchi brand in Indore (2001). Regional expansion into Northern (Ahmedabad,
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Delhi, Kolkata) and Central (Mumbai, Pune) areas including four metropolitan cities (2001-2003). DHHL acquired minority stake (7%) in December 2002 repurchased by Bennett Coleman & Company Limited (October 2005). Entered into Southern India region through FM radio services in Chennai (2003).
2006 � July- Interactive visual radio service offering via mobile.
� February- Listed on BSE and NSE
2005 � December- Secured outdoor advertising contracts worth Rs 340 million (US$7.4 million).
� October- Inception of wholly owned subsidiary “Times Innovative Media Private Limited”.
� October- Bennett Coleman & Company Limited acquired additional shares (11.0 million) from DHHL.
� October- Acquired outdoor advertising and event management business from parent company Times Infotainment Media Limited for Rs 5.8 million.
� April- Successful bid for 25 frequencies in Phase II worth Rs 1,301 million.
Figure 132) Entertainment Network, radio stations
State City
Andhra Pradesh Hyderabad
Vijayawada
Vishakapatnam
Bihar Patna
Chattisgarh Raipur
Goa Panaji
Gujarat Surat
Ahmedabad
Rajkot
Vadodara
Karnataka Bangalore
Mangalore
Kerala Thiruvananthapuram
State City
Madhya Pradesh Bhopal
Indore
Jabalpur
Maharashtra Nagpur
Kolhapur
Nasik
Pune
Aurangabad
New Delhi New Delhi
Punjab Jalandhar
Rajasthan Jaipur
Tamil Nadu Coimbatore
Madurai
Uttar Pradesh Lucknow
Kanpur
Varanasi
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Outdoor advertising
ENIL operates outdoor advertising business through wholly owned subsidiary Times Innovative Media Private Limited. The company leases billboards, spaces at train stations, spaces at bus stop shelters and distributes hand bills. Leased spaces are mainly into metropolitan cities such as Delhi, Mumbai and Kolkata and tie-ups with public transport carrier BEST (Mumbai). Bharti, Hindustan Times, HLL, HSBC Bank and Standard Chartered are the main advertisers.
Figure 133) Entertainment Network, Outdoor advertis ing space
City Description
Mumbai 1400 outdoor spaces (malls, hoardings etc) + Bus shelters
Delhi (Station) 13 metro stations and adjacent spaces
Delhi-Noida 66 Display screens along with one LED at Sahara Mall (Gurgaon).
Investment of Rs 350 million (US$ 7.6 million) on LED displays
Kolkata 80 Hoardings
Event Management
ENIL arrange and manages close to 600 big and small events (Femina, Filmfare and Pravasi Bharti) under 360 degree brand. Majority of the events managed are related to movie and fashion industry. Major advertisers: Samsung, Set India, State Bank of India, Master Card and Deutsche Equities. The segment contributed 13% of total revenues in March 2006.
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Financials
For the last full year (end March 2006), ENIL, had total revenues of Rs 1,406.7 million and Net profit of Rs 221.4 million, year-on-year Net profit increase of 218%. The company’s net losses are largely due to licence and set up costs.
Figure 134) Entertainment Network, financials
y/e ; March (Rs millions) 2002 2003 2004 2005 2006 CAGR
Revenues Airtime sales 32.2 207.2 526.1 688.6 1,174.1 145.7% Event 29.9 51.3 183.6 148% Outdoor 9.5 17.0 Other 15.4 2.6 13.5 12.8 32.0 20.1% Total revenues 47.6 209.8 569.5 762.3 1,406.7 133% Net profit (Loss) -146.4 -402.2 -293.3 -179.3 212.4 160%
Figure 135) Entertainment Network, segment analysis
Figure 136) Entertainment Network, key transactions
Date Type Company Notes
October 2005
Internal Transfer
Times Infotainment Media Limited
Buy-out price: Rs 5.8 million.
Outdoor advertising and event management business
Revenue (2006)
Airtime sales83.5%
Event13.1%
Outdoor1.2% Other
2.3%
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Management and ownership
Figure 137) Entertainment Network, key management a nd directors
Name Description
A.P. Parigi Managing Director and Chief Executive Officer
Prashant Panday
Deputy Chief Executive Officer
Joined the company in August 2000.
Harvinderjit Singh Bhatia
Chief Financial Officer
Joined ENIL in May 2001.
Farid Kureshi Executive Vice President (Business Head- Times OOH)
Ravi Narula
Executive Vice President (Regulatory Officer )
Held Deputy Director position at All India Radio for 28 years.
Natraja Thiagarajan
Chief Technical Officer
Joined the company in November 2001.
G Sharath Chandra Chief Operating Officer- ENIL (International)
Tapas Sen Executive Vice President (Programming)
Anil Fernandes Vice President (Legal and Company Secretary)
Prasad Swaminathan Vice President (People Innovation)
Figure 138) Entertainment Network, key shareholding s
Shareholder % of capital (March 2006)
Times Infotainment Media Limited 64.18% Fidelity 9.48% Bennett Coleman & Company Limited 7.13% HSBC (ME) 2.64% Macquarie 1.68%
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K.ETC Networks
Activities: TV channel operator
Ownership: Listed on the BSE and NSE (controlled by Zee Telefilms)
Recent strategic developments: Continued focus on regional channels
One of the leading television broadcaster in Northern India; with respect to regional viewership. ETC Networks broadcasts three free-to-air channels in Hindi and Punjabi languages.
ETC Networks is listed on Bombay and National Stock Exchanges; with Zee Telefilms Limited controlling (direct and indirect holdings) close to 55% equity (March 2006). The company was incorporated with the launch of music based television channel “ETC Music” (now ETC Hindi) in 1999.
Figure 139) ETC Networks, summary financials
(Rs millions) 2001 2002 2003 2004 2005 CAGR
Total Revenues 477.3 350 450.2 441.0 478.7 0.07% % Change -21.7% 29.27% -2% 8.5% Net profit (Loss) 24.3 -4.9 141.3 157.7 72.1 31.1% % Change -120% 2966% 11.6% -54.2% Net Margin 5.1% -1.4% 31.3% 35.7% 15.1%
Historical development
2006 � May- Birla Mutual Fund shades 0.1% equity stake.
2005 � April- Annual dividend (10%) approved.
2004 � October- India Capital Fund Limited diluted 2.94% equity.
� August- Launch of third channel “ETC Khalsa” focusing on Punjabi culture and philosophies.
� July- Plan to launch two more television channels in one to two years.
� March- Merged with E-Connect India Limited (wholly owned subsidiary of Zee Telefilms).
2002 � February- Zee Telefilms acquired 48.4% for Rs 250 million.
2000 � June- Launch of free-to-air ETC Punjabi channel
� May- Listed on Bombay and National Stock Exchanges
1999 � August- Incorporation with airing of flagship channel “ETC Music” (now ETC Hindi).
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Activities
Television Channels
ETC Networks broadcasts three free-to-air channels with total viewership of 20 million households46.
Figure 140) ETC Networks, channels
Channel Language Description
ETC Hindi Hindi Music and Entertainment programmes
ETC Punjabi Punjabi Punjabi language based music and general entertainment programmes
ETC Khalsa Punjabi Punjabi language based religious programmes
Entertainment portal
ETC Networks operates the entertainmenttv.com website. It offers music, Bollywood movies and free-paid download services (ring tones, wallpapers etc).
Financials
For the last full year (ending 31st March 2005), ETC Networks, had total revenues of Rs 478.7 million and Net profit of Rs 72.1 million, year-on-year Net profit decrease of 54%.
Figure 141) ETC Networks, financials
y/e March
(Rs million) 2001 2002 2003 2004 2005 CAGR
Revenues Channel Revenues 476.0 348.3 435.7 425.9 466.5 -0.5% Royalty Revenues 1.3 1.7 14.5 15.1 12.2 75% Total Revenues 477.3 350.0 450.2 441.0 478.7 0.07% Net profit (Loss) 24.3 -4.9 141.3 157.7 72.1 31.1%
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Management and ownership
Figure 142) ETC Networks, key management and direct ors
Name Position
Subhash Chandra Chairman
Sandeep Goyal Managing Director
Jagjit Singh Kohli Chief Executive Officer
Vikas Gupta Chief Financial Officer
Yogesh Radhakrishnan Business Head (ETC Music)
Rabindra Narayan Business Head (ETC Punjabi)
Vijay Shah Company Secretary
Deepak Bondra Vice President (Accounts)
P R Balasubramanian Vice President (Corporate)
Ashutosh Pande Vice President (Operations)
Rajiee M Shinde Vice President (Programming ETC Punjabi)
Sam Mall Vice President (Sales)
Figure 143) ETC Networks, key shareholdings
Shareholder % of capital (December 2005)
Zee Telefilms Limited & Nominees 51.33%
Asian Satellite Broadcast Private Limited 3.09%
Birla Sunlife Trustee Co. Pvt Limited 6.22%
BSMA Limited 2.64%
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L. Hathway cable
Activities: Cable TV and ISP operator
Ownership: Listed on the BSE and NSE (controlled by Raheja family)
Recent strategic developments: Plans to offer interactive gaming to its cable subscribers
Market data
Market codes: Reuters: HATH.BO
Bloomberg: 7HVN@IN
Current price: Rs 24.60
52 wk low: Rs 6.47
52 wk high: Rs 39.70
Share price performance (Last 12 mths)
One of India’s leading cable TV operators, with approximately 5 million subscribers. The company has a large number of subscribers in Mumbai, New Delhi, Chennai, Bangalore, Hyderabad, Pune, Mysore, Nashik and Ludhiana. The company offers a range of additional services including Internet access (95,000 subscribers in mid-2006) and interactive offerings (e.g. gaming).
Hathway is majority owned by the Raheja family (Star TV also has a 26% stake).
Figure 144) Hathway cable, summary financials
y/e March
(Rs millions) 2002 2003 2004 2005 2006 CAGR
Revenues 23.6 47.8 61.1 73.4 89.2 39.4% % Change 102.5% 28% 20.1% 21.5% Net profit (loss) 1.3 -11 -9.4 -8.6 -6.5 % Change 14.5% 8.5% 24.4% Net margin 5.5% -23% -15.4% -11.7% -7.3%
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Historical development
2006 � July- Broadband Internet service introduced in Chandigarh
� June- Launched interactive digital music based television channel.
2000 � September- Star India purchased 26% equity for US$ 50 million.
1998 � Rajan Raheja Group acquired BiTV and rebranded it as Hathway Bhawani Cablenet & Dotcom Limited.
Activities
Hathway distributes up to 90 television channels through its traditional and digital cable network in 12 cities (Mumbai, New Delhi, Chennai, Bangalore, Hyderabad, Pune, Nasik, Ludhiana, Jalandhar, Vijaywada, Chandigarh and Mohali). Like its peers, Hathway cable is engaged in the roll-out of its digital network and the introduction of conditional access technology.
Hathway has been offering Internet access to its subscribers since 2005 and has built up a subscriber base of 95,000 users. The service offers speeds of up to 512 kbps for a monthly price of Rs 275 – Rs 3000 (packages for annual unlimited usage are also available).
Local and digital television channel
Hathway broadcasts local city and entertainment based television channels through its cable network; its primary offering is the Cine Channel. In 2000, Hathway formed a joint venture with Star TV to develop and offer interactive media services over its cable network.
Figure 145) Hathway cable, channels
Channel Genre Description
Cine Channel (CCC) Movies and Entertainment
Launched in 1998
Offers latest and classic movies and music on city basis
Reaches 6.6 million households
I-TV Interactive music
The channel is offered in three cities ( Hyderabad, Bangalore and New Delhi).
C-News Local news Daily city information related to events and affairs.
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Management
Figure 146) Hathway cable, key management and direc tors
Name Description
Rajan Raheja Director
K Jayaraman Managing Director and Chief Executive Officer
Akshay Raheja Director
Uza Newnham Director
Nitin Atroley Director
Satish Raheja Director
Vinayak Agarwal Director
S.N. Sharma President Operations (North)
Milind Karnik President Finance and Company Secretary
Figure 147) Hathway cable, largest shareholders
Shareholder % of capital (June 2006)
Rajan Raheja Group 55% Star India 26%
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M. HT Media
Activities: Newspaper publishing, online media and radio
Ownership: Listed on the BSE and NSE (controlled by Birla Group)
Recent strategic developments: Launch of business newspaper, Mint
Market data
Market codes: Reuters: HTML.BO
Bloomberg: HTML@IN
Current price: Rs 187.25
52 wk low: Rs 71.40
52 wk high: Rs 203.50
Share price performance (Last 12 mths)
HT Media is one of India’s largest newspaper publishing groups; its leading publication is the Hindustan Times newspaper. Second largest English daily newspaper publisher in India; with total readership base of 13.2 million (March 2006). The company also publishes third largest Hindi daily “Hindustan” distributing 4 editions across the country. Hindi language based monthly periodicals are also offered in women and children genres. HT Media entered event management and FM radio broadcasting segments (Virgin Radio as strategic investor) in 2005.
HT Media is publicly listed on the BSE, with the Birla Group controlling 68% of the equity.
Figure 148) HT Media, summary financials
y/e March
(Rs millions) 2004 2005 2006 CAGR
Total revenue 4,214.9 6,336.9 8,153.33 39.1 % Change 50.3% 28.7 Net profit (Loss) (23.7) 273.3 372.7 % Change 36.4% Net Margin -0.5% 4.3% 4.6%
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Historical development
2007 � February – launch of business daily, Mint in partnership with the Wall Street Journal
2006 � Ventured into radio broadcasting in alliance with Virgin Radio (United Kingdom).
2005 � September- IPO on Bombay Stock Exchange.
� June- Advertising and promotional partnership with Bennett Coleman & Company Limited in Mumbai market.
� May- Hindustan Times Mumbai edition introduced.
2004 � October- Citicorp acquired minority stake for Rs 690 million.
� March- Online version of Hindustan newspaper “Hindustandainik.com” launched.
2003 � August- Henderson Private Capital’s Asia Fund purchased 15.85% stake.
� January- Hindustantimes.com U.K edition introduced on web.
2002 � September- Alliance with The Gallup Organisation for performance management content sharing.
1960 � Hindi monthly periodical “Kadambini” launched.
1924 � January- Incorporated as family run business under Birla Group of Companies.
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Activities
Newspapers
HT Media publishes three daily newspapers in English and Hindi; with total circulation of 2.3 million (January-June 2005). Hindustan Times Delhi is the largest single edition in India; with circulation of 1.2 million (June 2006). All print newspapers are offered in digital formats.
Figure 149) HT Media, Newspaper readership
Print Title Readership 47 Language of Instruction
Hindustan Times 3.5 million English daily
Hindustan 9.72 million Hindi daily
Mint n.a Launched in February 2007
English business newspaper
Periodicals
HT Media publishes two monthly periodicals in Hindi. Both periodicals were launched in November 1965.
Figure 150) HT Media, Periodicals
Title Circulation (2003)
Language Genre Frequency
Kadambini 30,830 Hindi Indian society & culture Monthly Nandan 53,249 Hindi Children & teenager Monthly
Event Management
HT Media has recently ventured into event management. The company has organised four events related to sports, leadership summit, entertainment and business in 2005.
Radio Broadcasting
HT Media entered into an agreement with Virgin Radio Asia to broadcast FM stations in metropolitan cities in India.
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Financials
For the last full year (end March 2006), HT Media, had total revenues of Rs 6,336 million, and Net profit of Rs 273 million, year-on-year Net profit increase of 1253%.
Figure 151) HT Media, financials
y/e March
(Rs million) 2004 2005 CAGR
Revenue
Advertising 3,282.2 4,935.7 50%
Circulation 836.7 1,255.8 50%
Sale of Paper and Scrap 43.7 54.2 24%
Other 52.2 91.1 74.5%
Total Revenues 4,214.9 6,336.9 50.3%
Net profit (Loss) (23.7) 273.3 1253%
Figure 152) HT Media, segment analysis
Revenue (2005)
Circulation20%
Other1%
Advertising78%
Sale of Paper0.9%
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Management and ownership
Figure 153) HT Media, key management and directors
Name Position
Mrinal Pandey Chief Editor
Naveen Joshi Resident Editor
Rakesh Sharma Printer and Publisher
Suresh Balakrishnan Vice President (Media Marketing)
Y.C. Agarwal Vice President ( Uttar Pradesh and Bihar)
Girish Dutta General Manager (Media Marketing)
Rajiv Gautam Deputy General Manager ( Lucknow Edition)
Ashok K Ohri General Manager ( Media Marketing)
K.M. Joshi Circulation Manager
B.M. Chatterjee Deputy General Manager (Media Marketing)- Ranchi Edition of Hindustan
Akhilesh Singh Manager ( Media Marketing)- Ranchi Edition of Hindustan
Anil Mathur General Manager Sales
Shekhar Bhatia Editor of Delhi and Patna Edition of Hindustan Times and Hindustan respectively
Sanjay Bahadur Assistant Vice President ( Media Marketing)
Rajiv Bagchi Chief Editor – Kolkata Edition
J.M. Saksena Deputy General Manager ( East)
Sunita Aron Resident Editor- Lucknow Edition of Hindustan
Sanjay Trehan Chief Executive ( Internet)
Birla Group and associate companies control 68% of equity.
Figure 154) HT Media, key shareholdings
Shareholder % of capital (March 2006)
The Hindustan Times Limited 67.9% Foriegn Institutional Investors 21.86%
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N.India Today group
Activities: Magazine publishing, events, online media and radio
Ownership: Privately owned by the Purie family
Recent strategic developments: Entered the radio market
The India Today group (legal name: Living Media Limited) is one of India’s leading publishing groups. The company is active in magazine and newspaper publishing, radio, television (through an equity interest) and events.
Magazine publishing is the company’s core business and it publishes 13 periodicals in print and digital format across a wide range of interests (travel, general news, business, architecture & design). Its flagship title is India Today which has a total readership 15 million (June 2006). The group also has strategic stakes in Thomson Printing Press and TV Today (television broadcasting).
The group has formed a number of partnerships with overseas publishers (The Conde Nast Group, AOL-Time Warner and Hearst Corporation) in order to publish Indian editions of their magazines. The group is privately owned by the Purie family.
Figure 155) Living Media. summary financials
y/e March
(Rs millions)
2001 2002 2003 CAGR
Total Revenue 1608.1 1597.1 2158.3 15.8% % Change -0.7% 35.1% Net profit (loss) 29.1 (239.1) 307.1 225% Net Margin 1.8% -14.9% 14.2%
Historical development
2006 � February – Successfully re-entered the radio market by winning 7 new licences.
� January- sold its radio stations for Rs 1,000 million.
2002 � August- Purchased Tata Group’s stake in Readers Digest.
� Distribution agreement with AOL-Time Warner for Fortune periodical.
� January- ActiveMedia Technology signed in as the wireless provider.
2001 � Divested 15% ownership stake in Thomson Press for Rs 300 million.
1999 � International tie-up with Hearst Corporation (USA) for Cosmopolitan India edition.
1975 � Flagship periodical “India Today” launched
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Activities
Magazine publishing
Living Media is the leading periodical publisher in India; offering multilingual editions distributed in 104 countries across the globe. The periodicals are distributed through World Media Private Limited.
The company has developed a number of events based on magazine brands.
Figure 156) India Today, key magazine titles
Title Launch Readership Notes
India Today 1975 15 million Editions published in 5 languages (Hindi, English, Tamil, Telugu and Malayalam).
English edition circulation: 0.46 million.
Hindi edition circulation: 0.33 million48.
Business Today
1992 0.94 million49
Largest fortnightly business based periodical.
CA Journal n.a n.a Monthly periodical published in collabration with Institute of Chartered Accountants
Cosmopolitan 1996 0.17 million Licence agreement with Hearst Corporation (USA)
Travel plus 2002 n.a Features tourist information of all Indian strates and cities.
Design Group 2001 n.a Bi-monthly periodical featuring snapshots of hotels, resorts, households and hotels.
Golf Digest n.a n.a Features tips from Tiger Woods, Phil Mickelson etc.
Target readers: Golf lovers
Time/Fortune n.a n.a Distributed for AOL-Time Warner.
Fortune is published fortnightly and carriers information about global economy and latest business trends.
Readers Digest
1954 3.6 million50 48 editions in 19 languages; with 100 million readers worldwide.
Monthly periodical
Today 2002 n.a Leading afternoon newspaper in New Delhi
Smart, Inc n.a n.a Information and Telecommunication sector updates, articles and news
Teens Today n.a n.a Monthly periodical featuring music, movie review, puzzles, games etc.
Printing
India Today offers printing services through Thomson Press. The printing press was established in 1970 and one of the largest in Indian sub-continent. Clients include Pearson group, Harper Collins, Oxford & Cambridge University Press and Readers Digest.
Other activities
India Today has a majority stake (55%) in the TV Today company. TV Today broadcasts one of India’s leading Hindi news channels, Aaj Tak.
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During 2006, the group sold its existing radio operations and then later second phase of radio licencing, successfully bid for some new FM radio licences.
The group also operates a classical music publishing business.
Financials
For the last full year (ending 31st March 2003), The India Today group (Living Media Ltd), had total revenues of Rs 2,158.3 million, and Net profit of Rs 307.1 million, year-on-year Net profit increase of 228.4%.
Figure 157) India Today, financials
y/e March (Rs million) 2001 2002 2003 CAGR
Total Revenues 1608.1 1597.1 2158.3 15.8%
Net profit (Loss) 29.1 -239.1 307.1 225%
Figure 158) India Today, key transactions
Date Type Company Buyer Notes
January 2006
Divestment (100%)
Radio Today Broadcasting Limited
Value Labs, NDTV & Astro consortium
Value: Rs 1000 million.
FM radio operations acquired by consortium lead by Value Labs, Astro (Malaysia) and NDTV.
August 2002
Acquisition (minority stake)
Readers Digest Living Media Purchase of Tata Group’s stake in Readers Digest
December 2001
Divestment (15%)
Thomson Press New York International India Fund
Living Media divested minority equity for Rs 300 million.
Management and ownership
The company is owned by the Purie family.
Figure 159) India Today, key management
Name Position
Aroon Purie Founder and key shareholder Anil Mehra CFO Ashish Bagga, Chief Executive Officer, Prabhu Chawla,
Editor, India Today & Group Editorial Director,
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O. Indiacom
Activities: Directory publishing
Ownership: Privately owned
Recent strategic developments: New directory launches in virgin markets in India
Indiacom is a Pune-based publisher of telephone directories and a range of other consumer and business information guides and handbooks. The company entered the directory publishing space following a strategic investment from the Italian directory publisher, Seat Pagine in 1988; the company was known as Sesa Seat Information Systems Ltd and was later renamed Indiacom. Seat divested their 40% stake in 1997 and are no longer involved in the company.
In recent years, the company has expanded beyond its core print telephone directory business into online directories and other print classified adverting based publications.
Telephone directories
Indiacom publishes both official (under contract from the incumbent telecoms operators) and ‘unofficial’ yellow pages directories. Key cities covered include Pune, Ahmedabad, Hyderabad, Bhubneshwar, Faridabad-Gurgaon, Rajkot, Vadodara, Aurangabad, Bhavnagar, Dhenkanal, Jamnagar, Jind, Junagadh, Khargone, Rewari, Rourkela, Sambalpur and Warangal. The directories have a combined circulation of 2.7 million copies. The official directory contracts are typically five year contracts to publish both a residential and business listings directory.
The company has also created a number of niche directory products targeting various business and consumer segments. Examples include the Yellow Pages Plus directories which are targeted at SMEs in major industrial cities (e.g. Ludhiana, Nashik and Chandigarh) and the Homemaker’s yellow pages directory which is aimed at housewives.
Indiacom has recently launched an operator-assisted directory enquiry service where users can call for a range of local information.
Other publications
Indiacom publishes a range of local guides such as Neighbourhood guides, Mall guides (with information on shopping) and tourist guides.
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Management and ownership
Figure 160) Indiacom, key management and directors
Name Role
Natalino Duo Chairman Ashok Mandore Managing Director Abhey Yograj Director Dr. MadanMohan Rao Director V. Srinivasa Rao Whole- time Director
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P. Infomedia India
Activities: Consumer and business magazines, directories and printing
services
Ownership: Listed on the BSE and NSE
Recent strategic developments: New magazine launches and partnerships with overseas companies
Market data
Market codes: Reuters: INFO.BO
Bloomberg: INFO@IN
Current price: Rs 166.15
52 wk low: Rs 117.50
52 wk high: Rs 234.95
Share price performance (Last 12 mths)
Infomedia India is a leading publisher with activities in telephone directories, business magazines, printing and outsourced publishing services. The company’s origins are in the yellow pages and printing services sector.
The company’s predesessor firm, Tata Press was incorporated in 1955 and listed in 1984. Todat, the company is listed on the BSE and NSE and the private equity arm of ICICI Bank is a major shareholder.
Figure 161) Infomedia India, summary financials
y/e March (Rs millions) 2003 2004 2005 2006 CAGR
Total Revenue 1281.88 1491.01 1310.54 1311.44 0.8% % Change 16.3% -12.1% 0.1% Net profit 130.79 241.93 571.8 73.88 -17.3% % Change 85.0% 136.3% -87.1% % Margin 10.2% 16.2% 43.6% 5.6%
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Activities
Infomedia’s key activities are in directories, business magazines, special interest magazines, contract printing and publishing and direct marketing.
The copmpany started its directory operations with the publication of Yellow Pages directories in India’s largest cities and a number of industrial directories. Today, the product range has broadened considerably and includes reselling Google Adwords to its advertisers.
Figure 162) Infomedia India, key directory-related products 51
Publication Description
City Guide Local directory containing comprehensive information about hotels, places to eat, cafes, bars, entertainment centres and places of interest.
Google Adwords Authorized reseller for Google AdWords in India.
Hotfrog.in HotFrog is a free online business directory listing India businesses. Launched in partnership with Reed Business Information.
Indian Exporters Guide Sourcebook for international buyers for Indian manufacturers and service providers.
Infomedia Home Guide Local directory providing comprehensive information on products and services required for home.
Infomedia Industries Directory
Directory of manufacturers and traders.
Infomedia Office Guide Directory of office products and services.
Infomedia Yellow Pages A directory of products and services including manufacturers, industries, dealers, retailers, showrooms and professional services.
Yellow Line Operator-assisted directory enquiries service.
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Figure 163) Infomedia India, business publications
Publication Frequency
Auto Monitor Fortnightly
Chemical World Bi-monthly
Electrical & Electronics Bi-monthly
Modern Food Processing Bi-monthly
Modern Machine Tools Bi-monthly (published in association with the Indian Machine Tool Manufacturers' Association)
Modern Medicare Monthly
Modern Packaging & Design bi-monthly
Modern Pharmaceuticals bi-monthly
Modern Plastics & Polymers bi-monthly
Modern Textiles bi-monthly
Photo Imaging bi-monthly
Search bi-monthly
Special interest titles are consumer magazines which target a specific interest group.
Figure 164) Infomedia India, special interest publi cations
Publication Frequency
AV Max Monthly Home video and audio technology
Better Interiors Monthly Interior design
Better Photography Monthly Photography
Chip Monthly IT and technology
Cricinfo Magazine Monthly Cricket
Overdrive Monthly Automotive
T3 - Tomorrow's Technology Today
Monthly New gadgets and technology
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Financials
Figure 165) Infomedia India, financials
y/e March (Rs millions) 2003 2004 2005 2006 CAGR
Net Sales 1181.18 1259.04 1257.13 1248.45 1.9% Other Income 100.7 231.97 53.41 62.99 -14.5% Total Revenues 1281.88 1491.01 1310.54 1311.44 0.8% % Change 16.3% -12.1% 0.1% Operating Profit 255.78 454.22 256.48 188.61 -9.7% % Change 77.6% -43.5% -26.5% Net profit 130.79 241.93 571.8 73.88 -17.3% % Change 85.0% 136.3% -87.1% % Change 10.2% 16.2% 43.6% 5.6%
Management and ownership
Figure 166) Infomedia India, key management and dir ectors
Name Position
Prakash Iyer Managing Director
Renuka Ramnath Chairman
Jayaraman Shashidhar Chief Financial Officer
Mr. Vijay Kumar Director
Figure 167) Infomedia India, key shareholdings
Shareholder % of capital (September 2006)
ICICI Bank subsidiaries 63.35 Foreign institutions 7.40
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Q. Indian Express Group
Activities: Newspaper publisher
Ownership: Privately owned by the Gupta family
Recent strategic developments: Partnership with Mid-day Multimedia
One of the leading newspaper and periodical publisher in India; with strong market presence in five regions (Maharashtra, Andhra Pradesh, Tamil Nadu, Kerala and Karnataka). The group operates two wholly owned subsidiaries (The Indian Express Newspaper (Bombay) and Express Publications (Madhurai)). The Indian Express Newspaper (Bombay) publishes newspaper and periodicals in three languages; with Mumbai as the core market. Express Publications (Madhurai) is active in Southern India; with traditional media publications offered in three regional languages.
The Indian Express Group is joint-stock company; with Goenka family members controlling 100% shareholding (June 2006). The company revenues are declining annually at 38% for the past three consecutive years (2002-2004).
Figure 168) Indian Express Group, summary financial s
y/e March
(Rs millions)
2002 2003 2004 CAGR
Total Revenue 5,802.6 3,998.3 2,209.5 -38.3% % Change -31.1% -44.7% Net profit (loss) 144.0 (107.5) 110.6 -8.3% % Change -174.6% 202.8% Net Margin 2.5% -2.7% 5.0%
Historical development
2005 � May- The Indian Express Newspaper (Bombay) combined advertising and promotional operations with Mid Day Multimedia for Mumbai market.
� May- Minority stake acquired by The Indian Express Newspaper (Bombay) in Mid Day Multimedia.
1998 � Spun-off into two separate wholly owned subsidiaries i.e. The Indian Express Newspaper (Bombay) and Express Publications (Madhurai)
1961 � Launched The Financial Express business daily.
1939 � Ramnath Goenka acquire newspapers and publishing rights
1934 � Ventured into regional language newspaper publishing (“Dinamani” title)
1931 � The Daily Express re branded as “The indian Express”.
1921 � First edition of English newspaper “The Daily Express” published
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Activities
Newspapers
The Indian Express Group publish 8 newspaper titles in five Indian States (Maharashtra, Andhra Pradesh, Kerala, Tamil Nadu and Kerala) through its two subsidiaries: The Indian Express Newspaper (Bombay) and Express Publications (Madhurai) subsidiaries. Newspapers are published in English and four regional languages (Marathi, Kannada, Tamil and Gujarati).
Figure 169) Indian Express Group, newspapers 52
Title Language Frequency Readership (NRS, 2003)
The Indian Express Newspaper (Mumbai)
The Indian Express English Daily 8,41,000
The Financial Express English Daily 1,41,000
Loksatta Marathi Daily 20,19,000
The Sunday Express English Sundays 5,85,000
Express Publications (Madhurai)
The New Indian Express
English Daily 1,127,000
Kannada Prabha Kannada Daily 9,82,000
Dinamani Tamil Daily 13,04,000
The New Sunday Express
English Sundays Circulation: 2,47,16353
Periodicals
The Indian Express Group publishs film and news magazines. The periodicals are offered in English and three regional languages (Marathi, Malayalam and Tamil).
Figure 170) Indian Express Group, periodicals 54
Title Language Genre Frequency Readership (NRS,2003)
Indian Express Newspaper (Mumbai)
Lok Prabha Marathi General news & stories Weekly 399,000
Screen English Film & General Entertainment
Weekly n.a
Express Publications (Madhurai)
Malayalam Vaarika Malayalam General news & stories Weekly 4,02,000
Cinema Express Tamil Film & General Entertainment
Fortnightly 1,13,000
Tamilan Express Tamil General news & stories Bi-Weekly 72,000
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Digital Media
The Indian Express Group offers official website for all the newspapers and periodicals. Express Network Private limited manages websites for Express Publications (Madhurai).
Figure 171) Indian Express Group, websites 55
Websites Unique visitors per month
Screenindia.com 1.0 million Indianexpress.com 2.0 million Financialexpress.com 1.0 million
Financials
For the last full year (ending 31st March 2004), The Indian Express Group, had total revenues of Rs 2,209 million, and Net profit of Rs 110 million, year-on-year Net profit increase of 202%.
Figure 172) Indian Express Group, financials
y/e March, (Rs millions) 2002 2003 2004 CAGR
Revenues Indian Express (Bombay) 3,755.8 2,743.6 1,235.3 -42.6% Express Publications (Madhurai) 2,046.8 1,254.7 974.2 -31.0% Total Revenues 5,802.6 3,998.3 2,209.5 -38.3% Net profit s Indian Express (Bombay) 16.8 39.1 132.4 180.7% Express Publications (Madhurai) 127.2 (146.6) (21.8) Total Net profit (Loss) 144 (107.5) 110.6 -8.3%
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Management and ownership
The Indian Express Group is owned by the Goenka family. The group is split into two wholly subsidiaries: Indian Express Newspaper (Bombay) managed by Vivek Goenka; and Express Publications (Madhurai) managed by Vivek Gupta.
Figure 173) Indian Express Group, key management an d directors
Name Position
Shekhar Gupta Editor-in-Chief and CEO
The Indian Express Newspaper (Bombay)
Manjit Chopra General Manager and Printer and Publisher
Ratnabali Mazumdar General Manager (Space Marketing)
Gautam Chikermane Executive Editor- Mumbai Edition of The Financial Express
V. Ranganathan Printer and Publisher of The Financial Express
S.K Sharma Circulation Manager
Jyotsna Bhatnagar Deputy Resident Editor- Gujarat Edition of The Financial Express
Prashant Rama Printer and Publisher- Gujarat Edition of The Financial Express
Bhawna Somaaya Editor of The Screen
Kumar Ketra Editor of Loksatta
Pradeep Verma Executive Editor of Lok Prabha
Express Publications (Madhurai)
Manoj Kumar Sonthalia Chairman and Managing Director
Sushila Ravindranath Editor
K. Sankaran Nayar Printer and Publisher
Jay Menon Deputy General Manager
Vinod Kumar Director- Marketing
V. Baskaran Vice President- Finance
V.K Bansal Vice President- Sales
K. Nandakumar Vice President- Technical
M. Gopalan Chief Manager- Advertising
S. Ganeshan Advertising Manager
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R.InNetwork Entertainment
Activities: Cable TV operator
Ownership: Ultimately controlled by the Hinduja family
Recent strategic developments: Roll-out of CAS technology on cable network
InNetwork Entertainment is an Indian media company whose core operation is a cable TV operation with a network of approximately 3-4 million subscribers. The company is the leading player in the Mumbai market and has operations in another 11 cities (including Delhi, Ahmedabad, Hyderabad, Bangalore, Belgaum, Agra, Indore, Vadodara Mysore, Nasik and Nagpur).
IndusInd Media is a subsidiary of Hinduja TMT (HTMT), which is ultimately controlled by the Hinduja family (they control 67% of the equity). HTMT is listed on the BSE and NSE and to date, has been active in both the media sector and the provision of IT and outsourcing services.
HTMT has a number of other subsidiaries active in the media sector:
� In2cable It provides ISP services to both residential and business customers. In 9 cities (including Mumbai and Delhi), it provides broadband Internet services.
� In Network. Film production and distribution
� CVO. A leading Hindi language movie channel
� In TV. Operates a number of local cable TV channels. The company is planning to launch a hindi language news channel (February 2007).
� Shop 24 Seven. Offline and online e-commerce offering.
InNetwork Entertainment is rolling out conditional access (CAS) technology on its cable TV network. As part of the CAS roll-out the cable network has been re-branded as INDigital. In order to icentivise its 2,400 local cable franchisees (LCOs) to market its enhanced offering, InNetwork Entertainment has offered them equity.
Figure 174) InNetwork Entertainment, summary financ ials
y/e March Rs millions (2006)
Cable 1,380 Content 170 ISP services 50
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Figure 175) InNetwork Entertainment, key management and directors
Name Role
Ravi Mansukhani Managing Director Anand Giridhar Vice President (Movies) Sumeet Das Senior Manager (Brand & Logistics) Sathesh Kumar Vice President (Finance) Viveck Vaidya Senior Manager (Marketing) Guruprasad Kulkarni Vice President (Technical)
Figure 176) InNetwork Entertainment, key shareholdi ngs
Shareholder % of capital (October 2006)
Hinduja group and associate companies 67% Intel Capital 3% Kudelski 2%
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S. Info Edge
Activities: Online classified media (jobs, property and matrimonials)
Ownership: Listed on the BSE and NSE (controlling stake with CEO)
Recent strategic developments: IPO in late November 2006
Market data
Market codes: Reuters: INED.BO
Bloomberg: INED@IN
Current price: Rs 642.50
52 wk low: Rs 480.00
52 wk high: Rs 755.00
Share price performance (Last 12 mths)
Infoedge is India’s leading pure online company. Its operates webites targeting the recruitment, matrimonials and property sectors. The company is also active in the recruitment services sector through its Quadrangle recruitment consultancy business. The company was established by its current CEO in the 1997.
The company underwent an IPO in November 2006.
Figure 177) Info Edge, summary financials
y/e March (Rs millions) 2005 2006 % Change
Revenue 441 824 86.8% Net profit 3 133 4333% % Margin 0.7 16.1
Historical development
2006 � November – IPO on the BSE and NSE
2005 � September – launch of property site, 99acres.com
2004 � Acquired matrimonials website, Jeevansaathi.com
2000 � Acquired recruitment services business, Quadrangle
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Activities
Infoedge’s core activities are in the provision of online services to the recruitment, matrimonials and property sectors, through three websites.
Figure 178) Info Edge, websites
Web site Description
Naukri.com Most visited recruitment site
Carries vacancies and also has a CV database
13.4 million unique visitors (March 2006)
Jeevansathi.com Matrimonials website (No. 3 player in the market)
203,500 profiles
99acreas.com Property site
Launched in September 2005.
Still an emerging sector in India, with minimal revenues
The company has established a network of 45 offices across india, ensuring that its advertising sales team can market effectively to local businesses.
Financials
Figure 179) Info Edge, financials
y/e March 2005 2006 % Change
Naukri.com 400 726 81.5 Quadrangle 39.8 53 33.2 99acreas.com 0 0 Jeevansathi.com n.m 44 Total revenues 440 824 87% EBITDA 129 233 % Margin 29.4 28.2
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Management and ownership
Figure 180) Info Edge, key management
Name Position
Sanjeev Bikhchandani CEO and Cofounder
Hitesh Oberoi COO
Ambarish Raghuvanshi CFO
Sanjeev Dalal CTO
Figure 181) Info Edge, key shareholdings
Shareholder % of capital (December 2006)
Founders 54.6% Foreign institutions 13.25%
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T. Inox Leisure
Activities: Multiplex operator
Ownership: Listed on BSE and NSE (controlling stake with promoter)
Recent strategic developments: Merger with Calcultta Cine
Market data
Market codes: Reuters: INOL.BO
Bloomberg: INOL@IN
Current price: Rs 130.65
52 wk low: Rs 95.15
52 wk high: Rs 252.70
Share price performance (Last 12 mths)
Inox leisure is a leading multplex operator with 13 multiplexes in 12 cities. Inox has secured a preferential access partnership with the Indian Pantaloon Retail group; this has given it first option in shopping malls developed by Pantaloon. The companies merger with Calcutta Cine will expand its number of multplexes by 9 (largely in Bengal and Assam).
The company is listed on the BSE and NSE.
Figure 182) Inox Leisure, summary financials
y/e March (Rs millions) 2004 2005 2006 % Change
Revenue 299.1 602.6 1,021 85% Net profit 23.4 59.4 175 173% % Margin 7.8% 9.9% 17.1%
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Historical development
2007 � January – New multiplex opened in Chennai
2006 � June – Merger with Calcutta Cine Pvt Ltd
� February – IPO on BSE and NSE
2002 � First multiplex opened in Pune
2001 � Inox lesiure established
Figure 183) Inox Leisure, multplexes
Multiplex Location
Garuda Mall Bangalore
Racecourse Circuit Road Baroda
Radhakrishnan Salai Chennai
Rink Mall Darjeeling
Panaji Goa
Sapna Sangeeta Road Indore
Vaishali Nagar Jaipur
Forum Kolkata
Salt Lake City Kolkata
Indira Vihar Kota
CR2, Nariman Point Mumbai
Poonam Mall Nagpur
Bund Garden Road Pune
INOX Leisure is continuing to develop new multiplexes in Mumbai (Borivali), Bharuch, Vijaywada, Lucknow, Faridabad, Jaipur, Kolkatta, Hyderabad, Raipur, Bangalore, Nagpur, Jodhpur and Pune.
Management and ownership
Figure 184) Inox Leisure, key management
Name Position
Mr. Pavan Jain Chairman
Manoj Bhatia CEO
Alok Tandon COO
The promoters (Pavan Jain and his associates) control 66% of the equity.
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U.Jagran Prakashan
Activities: Newspaper publishing, magazines, outdoor advertising and
radio
Ownership: Listed on the BSE and NSE (controlling stake with promoter)
Recent strategic developments: Entry into radio market
Market data
Market codes: Reuters: JAGP.NS
Bloomberg: JAGP@IN
Current price: Rs 369.65
52 wk low: Rs 132.00
52 wk high: Rs 379.50
Share price performance (Last 12 mths)
Jagran Prakashan is the publisher of the largest readership newspaper in india, Dainik Jagran; it has a daily readership of 21 million. Dainik Jagran is published in Hindi and distributed in 18 editions across the country (Uttar Pradesh is its core market). The company is also active in magazines, outdoor advertising and event management.
In 2006, Jagran Prakashan underwent an IPO on the BSE and NSE. The UK newspaper group, Independent News & Media has a 20.85 stake in the group and there are plans to publish its UK title, The Independent in India.
Figure 185) Jagran Prakashan, summary financials
y/e March (Rs millions) 2003 2004 2005 2006 CAGR
Total Revenue 2,562.8 3,127.8 3,774.7 4,835.3 23.5% % Change 22% 20.6% 28.1% Net profit (Loss) 180.1 153.6 15.3 317.0 20.7% % Change -14.7% -90% 1971% % Margin 7.0% 4.9% 0.4% 6.5%
Historical development
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2006 � August – Negotiations to enter English newspaper market through a partnership with The Pioneer fail
� February- Listed on National and Bombay Stock Exchanges
2005 � SMS (7272) service introduced on mobile handsets in India.
� Purchase of 89% stake in Jagran Research Centre.
2004 � December- Independent News & Media Plc acquire 26% stake for Rs 1,500 million.
2003 � September- Launch of Jagran’s Panipat and Bhagalpur editions
1997 � Jagran on web (www.jagran.com)
1975 � July- Renamed and incepted as Jagran Prakashan
1942 � Incorporated as Jagran Limited by Puran Chandra Gupta (Freedom Fighter)
Activities
Newspapers
Jagran Prakashan publishes the Dainik Jagran, India’s highest readership daily newspaper. The paper was established in 1942 and now has a daily readership of 21 million. Readership has more than doubled from a level of 9.6 million in 2000; this has largely been driven through geographic expansion and the launch of many new local editions. Key to this expansion has been the company’s network of 29 printing centres across North India. The title has a strong market position in the North Indian Hindi speaking states, especially Uttar Pradesh, Punjab, Uttaranchal, Haryana and Himachal Pradesh.
Its online version, jagran.com is a leading Hindi language news website. The comnpany has also launched a number of mobile-based news services.
Periodicals
Jagran Prakashan publish monthly and yearly periodicals in Hindi. The periodicals target Hindi readers in small cities56.
Figure 186) Jagran Prakashan, Periodicals
Title Language Genre Frequency
Jagran Varshiki Hindi Yearly domestic and international news and
events Yearly
Jagran Sakhi Hindi Women & society Monthly
Outdoor Advertising and Event Management
Jagran Prakashan provides outdoor advertising (Jagran Engage) and event management services (Jagran Solutions). Jagran Engage owns approximately 560 display sites across 6 cities and has leased an additional 2,000 sites.
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Financials
For the last full year (end March 2006), Jagran Prakashan, had total revenues of Rs 4,835 million, and Net profit of Rs 317 million.
Figure 187) Jagran Prakashan, financials
y/e March (Rs millions) 2003 2004 2005 2006 CAG R
Revenues by Type Advertising 1,556.7 1,994.9 2,330.1 3,064.7 25.3% Circulation 980.2 1,101.6 1,384.4 1,603.7 17.6% Other 25.9 31.1 60.1 166.9 84.9% Total Revenues 2,562.8 3,127.8 3,774.7 4,835.3 23.5% Net profit (Loss) 180.1 153.6 15.3 317.0 20.7%
Figure 188) Jagran Prakashan, segment analysis
Revenue (2006)
Advertising64%
Circulation33%
Other3%
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Management and ownership
Figure 189) Jagran Prakashan, key management and di rectors
Name Position
Sanjay Gupta Editor
Mahendra Mohan Gupta Executive Chairman
Yogendra Mohan Gupta Group Chairman
Shailesh Gupta Advertising Director
Shailendra N. Jaitly Corporate General Manager Advertising
A.S Raghunath Corporate General Manager- Brand Development
Figure 190) Jagran Prakashan, key shareholdings
Shareholder % of capital (December 2006)
Gupta family 52.1% Independent News & Media Plc 20.80%
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V. Jasubhai Group
Activities: Business media (magazines, online, events)
Ownership: Privately owned by jasubhai family
Recent strategic developments: New title launches
Jasubhai Group is a parivately owned company with activities in the media, engineering and technology sectors. The group’s media activities consist of business periodicals and websites, exhibitions (largely in the pharmaceuticals sector) and marketing services (e.g. direct marketing and event management).
Figure 191) Jasubhai Group, business magazines
Sector Title Notes
Chemical & Process Industry
Chemical Engineering World Launched in 1969
Also publish a year book
Chemical Products Finder Product directory
Construction and Architecture
Indian Architect & Builder (IAB)
Launched in 1988
Readership: 300,000
Energy & Exploration Offshore World Oil and gas exploration
IT Digit Launched in 2001
Circulation: 120,000
Network Computing Published in association with CMP Media
Computer Reseller News Published in association with CMP Media
Reaches 20,000 organisations
Skoar! Games magazine
Manufacturing Technology
Industry 2.0 Technology management magazine for industrial manufacturing and engineering companies
Pharma & Biotechnology
Pharma Bio World Bi-monthly magazine aimed the pharmaceutical and biotechnology sectors.
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Management and ownership
The company is owned by the Jasubhai family.
Figure 192) Jasubhai Group, key management and dire ctors
Name Position
Maulik Jasubhai Director and Chief Executive Officer
R J Vakil Chief Financial Officer
L. Subramanyan CEO - Jasubhai Digital Media
Vijay Adhikari Executive Vice President - Operations
Bibhor Srivastava Vice President Sales (Media and Marketing Services)
Indian media market
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W. K Sera Sera Productions
Activities: Film production and distribution
Ownership: Listed on the BSE and NSE (controlling stake with promoter)
Recent strategic developments: Acquisition of 80% stake in Lemon Entertainment
Market data
Market codes: Reuters: KSER.BO
Bloomberg: GPM@IN
Current price: Rs 22.05
52 wk low: Rs 19.00
52 wk high: Rs 87.95
Share price performance (Last 12 mths)
K Sera Sera is a film production and distribution company. It produces and distributes Bollywood movies, through a number of joint venture agreements with various film producers, directors and multiplex operators. K Sera Sera is listed on the BSE and NSE.
Figure 193) K Sera Sera, summary financials
RS in Millions 2004 2005 2006 CAGR
Total Revenue 243.2 375.1 577.7 54.1% % Change 3953% 54.2% 54% Net profit (Loss) 35.7 34.0 90.7 59.4% % Change 11800% -4.7% 166.7% Net Margin 14.7% 9.1% 15.7%
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Historical development
2006 � December – Acquisition of 80% stake in Lemon Entertainment (Broadcaster of Lemon TV)
� October – Established subsidiary in Singapore
� September - 5 year production and distribution agreement with the UK-based film company, Eros International
� January- Production joint venture agreement with Percept Pictures
2005 � October- Production joint venture agreement with Sohail Khan Productions.
� June- Acquisition of distribution rights of 4 medium and big budget Hindi films
� February- Acquired distribution rights for film “Black” in Hyderabad and Aurangabad regions.
2004 � December- Ventured into telelvision production with creation of Twenty twenty brand.
� February- Joint production of 9 films with PVR Pictures
2003 � December- Production joint venture agreement with Sahara One Media & Entertainment Limited for 10 film titles distributed under “Sahara” brand worth Rs 267 million.
� February- Production joint venture agreement with Varma Corporation.
2002 � October- Divested paper business and entered the media sector.
� K Sera Sera brand launched.
1995 � September- Incorporated as paper manufacturing and processing company under “Garnet Paper Mills”.
Activities
Film Production
K Sera Sera produces low to big budget Hindi films. Its core offering is low budget films (produced in collabration with Varma Corporation Limited). In 2005, the company produced and released 5 Hindi films.
Television production
K Sera Sera ventured into Hindi language production in 2005, with 2 general entertainment shows for the Sahara One channel.
Film Distribution
K Sera Sera distributes Hindi films through a range of distribution partners (RGV, Kss Distribution, PVR). In 2005, the company distributed 6 films across the country.
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Financials
For the last full year (end March 2006), K Sera Sera, had total revenues of Rs 577 million, and Net profit of Rs 91 million, year-on-year Net profit increase of 166%.
Figure 194) K Sera Sera, financials
y/e March (Rs millions) 2004 2005 2006 CAGR
Revenues by Type
Film Production and Distribution 239.7 366.1 377.9 26%
Third party Distribution - 1.6 137.4
Television Production - 6.8 62.1
Other 3.4 0.5 0.3
Total Revenues 243.2 375.1 577.7 54%
Net profit (Loss) 35.7 34.0 90.7 59%
Figure 195) K Sera Sera, segment analysis
Revenue (2006)
Film Production and Distribution
65%
Third party Distribution
24%
Television production
11%
Other0%
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Management and ownership
Figure 196) K Sera Sera, key management
Name Description
Ashok Pamani Non executive Chairman
Parag M Sanghavi Managing Director
Ramesh Pamani Non Independent and Non Executive Director
Raj Sital Das Motwani Non Independent and Non Executive Director
Ashok Gulabrai Gandwani Non Independent and Non Executive Director
Rajesh Pavithran Chief Operating Officer (Twenty Twenty)
Hamavvand Chief Production Controller (Twenty Twenty)
Kacon Sethi Director (Twenty Twenty)
Figure 197) K Sera Sera, key shareholdings
Shareholder % of capital (December 2006)
Promoters and management 22.3% Foriegn Financial Institutions 22.36%
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X. Malayala Manorama
Activities: Newspaper publishing, magazines, radio and television
Ownership: Privately owned by the Mammen Mappillai family.
Recent strategic developments: Entry into radio market
Malaya manorama is leading newspaper and magazine publisher in the state of Kerala. The Malayalam Manorama title, published in the Malayalam language has the sixth largest readership in India at 8.4 million (NRS, 2006). The company also publishes weekly, fortnightly and monthly periodicals in three languages. Vanitha is the fourth highest readership magazine published in the Malayalam language. The company has recently entered the television and radio markets in Kerala.
Malayalam Manorama is privately owned by the Mammen Mappillai family
.
Figure 198) Malayala Manorama, summary financials
y/e March (Rs millions) 2002 2003 2004 CAGR
Total Revenue 2,652.1 2,882.6 3,057.2 7.4% % Change 8.7% 6.1% Net profit (loss) 73.1 142.5 156.3 46.2% 95% 9.7% Net Margin 2.7% 4.9% 5.1%
Historical development
2006 � Launched news channel
2005 � December- Five editions of Malayala Manorama launched in Middle East countries (Bahrain, Dubai etc).
2004 � November- English periodical featuring men’s issues to be l;aunched with initial circulation of 50,000 copies.
� October- Venture into Malayalam language based television channel broadcasting segment.
2003 � June- Malayala Manorama on web
Newspaper
Malayala Manorama publishes Malayalam language based daily newspaper; with a daily readership of 8.4 million (NRS, 2006). The newspaper is mainly read in the state of Kerala; it also has an online version at manoramaonline.com.
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Periodicals
Malayala Manorama publishes weekly, forthnightly and monthly periodicals in Malayalam, Hindi and English languages. The periodicals are offered in various of genres ranging from general news, entertainment, women and society issues.
Figure 199) Malayala Manorama, Key publications
Titles Genre Language Frequency Readership (2006)
Malayala Manorama Weekly General Malayalam Weekly 2.35 million
The Week News English Weekly 1.41 million57
Balarama Children Malayalam Weekly 2.52 million
Vanitha Women Malayalam & Hindi
Forthnightly 4.11 million
Karshakaree Agriculture Malayalam Monthly n.a
Broadcasting
The company is active in both television and radio broadcasting. In 2006, the group launched a news television channel. In the radio sector, the group won 3 FM licences in Kerala (cities of Kozhikod, Trissur and Kannur).
Management and ownership
Since its establishment in the 1880s, the group has been owned by the Mammen Mappillai family.
Figure 200) Malayala Manorama, key management and d irectors
Name Position
K.M Mathew Chief Editor
Philip Mathew Managing Editor
Mammen Varghese Printer and Publisher ( Kottayam, Kochi, Kozikod, Mumbai, Chennai and Banglore Editions)
Jacod Mathew Printer and Publisher (Thiruvananthapuram, Thrissur, kannur, Palakkad, Kollam and Malappuram Editions
T.M Mathews General Manager ( Marketing)
M. Rajagopalan Nair General Manager ( Circulaion)
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Y. Mid-day Multimedia
Activities: Newspaper publishing, radio and online
Ownership: Listed on the BSE and NSE (controlling stake with promoter)
Recent strategic developments: Launch of radio operations
Market data
Market codes: Reuters: MIDD.BO
Bloomberg: MIDM@IN
Current price: Rs 47.95
52 wk low: Rs 94.80
52 wk high: Rs 33.00
Share price performance (Last 12 mths)
Mid-day Multimedia is a leading Mumbai-based newspaper publisher; it has recently expanded into commercial radio. Thr group publishes the a leading English daily tabloid newspaper, Mid day.
Mid-day Multimedia is listed on the BSE and NSE (the Khalid Ansari family have a controlling stake of 51%)
Figure 201) Mid-day Multimedia, summary financials
y/e March (Rs millions) 2003 2004 2005 2006 CAGR
Total Revenue 1.155.6 1,170.3 1,278.9 1,238.8 2.3% % Change 1.3% 9.3% -3.1% Net profit (Loss) 30.1 90.7 61.0 80.9 38.6% % Change 201% -32.7% 32.6% Net Margin 2.6% 7.7% 4.8% 6.5%
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Historical development
2006 � December – Agreement with Times of India group to share printing and distribution in Mumbai
� January- BBC Worldwide Holdings BV to invest Rs 318.5 million in Mid-Day’s radio business.
� January- Minority shareholder “Rakesh Jhunjhunwala” to invest Rs 100 million in Mid day radio.
2005 � August- Board of Director approve foreign institutional investment to 26%.
� June- Bennett Coleman & Company Limited divested 8.45% equity.
� May- Indian Express Group purchase 10% stake for Rs 255.4 million.
� May- Advertising sales agreement with “The Indian express Newspaper (Bombay) Group to improve operational efficiency.
2004 � October- Bennett Coleman & Company Limited acquired 8.55% equity for Rs 120 million.
� June- Launched morning newspaper “The Morning Quick”.
2001 � February- IPO on Bombay and National Stock Exchanges
1995 � February- Gujarati language edition of Mid Day introduced
1979 � Ventured into English daily newspaper segment with Mid Day edition in Mumbai
1938 � Incorporated as paper manufacturing and processing business.
� March- Divested paper business and launched first newspaper “Inquilab”.
Activities
Mid Day Multimedia publishes daily newspapers in English, Urdu and Gujarati. The flagship title is the English edition of Mid-day and the group is rolling out this titles into other major cities (including Bangalore in 2006).
Figure 202) Mid-day Multimedia, titles
Title Language Frequency Readership
Mid Day English Daily 730,000 (Mumbai)
Gujurati Mid Day Gujarati Daily 93,000
The Inquilab Daily Urdu Daily n.a
Sunday Mid Day English Sundays 402,000
The Morning Quick English Daily n.a
Metro English Daily Free newspaper
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Radio Broadcasting
Mid-day Multimedia’s radio stations operate under the Radio One brand. The BBc;s commercial arm, BBC Worldwide is a 20% shareholder in the radio operation.
Financials
For the last full year (end March 2006), Mid Day Multimedia, had total revenues of Rs 1,239 million, and Net profit of Rs 81million, year-on-year Net profit increase of 33%.
Figure 203) Mid-day Multimedia, financials
y/e March (Rs millions) 2003 2004 2005 2006 CAGR
Revenues Newspaper Publishing
Circulation revenues 138.0 146.2 164.4 162.9 5.6% Advertising revenues 711.5 751.5 825.3 867.8 6.8% Job work revenues 47.7 51.0 4.4 3.0 -60%
Total newspaper revenues 897.2 948.7 1,034.6 1,060.0 5.7% Radio 25.3 37.5 60.7 86.6 50.6% Outdoor Advertising 233.1 184.1 183.6 92.2 -26.3%
Total Revenues 1.155.6 1,170.3 1,278.9 1,238.8 2.3%
Net profit 30.1 90.7 61.0 80.9 38.6% % Margin 2.6% 7.8% 4.8% 6.5%
Figure 204) Mid-day Multimedia, segment analysis
Revenue (2006)
New spaper - Advertising
72%
Other0%
New spaper - Circulation
13%
Radio7%
Outdoor advertising
8%
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Figure 205) Mid-day Multimedia , key transactions
Date Type Buyer Notes
January 2006 Investment BBC Worldwide Investment of Rs 318.5 million in the radio
subsidiary of Mid-day
Radio Mid day West (India) Private Limited is a subsidiary of Mid Day Multimedia
June 2005 Divestment Times of India SoId sold its 8.45% of its stake
May 2005 Acquisition Indian Express group
Acquired 10% stake for Rs 255.4 million.
October 2004 Minority Stake Times of India Acquired 8.55% for Rs 120 million
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Management and ownership
Figure 206) Mid-day Multimedia, key management and directors
Name Position
Khalid Ansari Chairman
Tarique Ansari Managing Director
Cyriac Mathew Chief Operating Officer
Manajit Ghoshal Chief Financial Officer and Vice President-Corporate Services
Rajesh Tahil Chief Executive (Radio One 92.5 FM)
Avirook Sen Editor
Khalid Ansari (founder) and his family control 52% of the equity.
Figure 207) Mid-day Multimedia, largest shareholder s
Shareholder % of capital (December 2006)
Promoters 51.92 Foreign institutions 8.84
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Z. Mukta Arts
Activities: Film production and distribution
Ownership: Listed on the BSE and NSE (controlling stake with promoter)
Recent strategic developments: No major developments
Market data
Market codes: Reuters: MUKR.BO
Bloomberg: MUKR@IN
Current price: Rs 71.10
52 wk low: Rs 79.70
52 wk high: Rs 31.30
Share price performance (Last 12 mths)
Mukta Arts is one of the longest established Hindi film production companies in India. Its is controlled and managed by the leading director Subhash Ghai. Mukta Arts produces and distributes Hindi films in India and overseas markets. The company also offers media education and production services.
Mukta Arts went public on National and Bombay Stock Exchanges in September 2000.
Figure 208) Mukta Arts, summary financials
(Rs millions) 2003 2004 2005 2006 CAGR
Total Revenues 427.4 313.7 511.6 436.3 0.7% % Change -26.6% 63.1% -14.7% Net profit (Loss) 71.3 33.6 -172.2 -56.4 % Change -53% -612.5% 67.2% Net Margin 16.7% 10.7% -33.6% -13%
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Historical development
2005 � Ventured into low budget film producing with inception of wholly owned subsidiary “Mukta SearchLight Films”.
2003 � September- Acquisition of Star Jack for Rs 0.1 million.
� Long-term investment of Rs 43.2 million in 50:50 joint venture with Adlabs.
2001 � Film broadcasting rights sold to SET India Private Limited (Sony TV) for Rs 161 million.
� Cinema distribution rights of big budget film “Yaadein” sold for Rs 84.4 million.
2000 � September- Listed on National and Bombay Stock Exchanges
� Windmill Holdings purchased 8 film title library for US$ 3.13 million
1982 � September- Incorporated by Subhash Ghai
Activities
Mukta Arts produces small and big budget Hindi films. The company also distributes its own and third party films in India and overseas.
It also produces television content for channels such Zee and Sony.
Facilities services
Mukta Arts provides pre and post production services (acoustic, graphics, special effects etc) through a wholly owned subsidiary, Audeus studio.
Mukta Arts offer film direction, screenplay, writing courses through its Whistling Woods education centre in Mumbai.
Financials
For the last full year (ending 31st March 2005), Mukta Arts, had total revenues of Rs 511 million, and Net loss of Rs 172 million, year-on-year revenue increase of 63%.
Figure 209) Mukta Arts, financials
y/e; March (RS million) 2001 58 200359 2004 2005 CAGR
Revenues Music 81.4 11.1 1.5 29.0 -29% Films 241.9 63.8 23.3 252.0 1.4% TV Serials and Videos - 5.3 3.8 - - Old Films 339.3 286 158.3 170.3 -20.5% Equipment Hiring revenues 49.0 39.7 29.8 28.6 -16.4% Other revenues 119.8 101.7 96.9 31.5 -35.8% Total Revenues 503.2 427.4 313.7 511.6 0.5% Net profit (loss) 138.9 71.3 33.6 (172.2) -40.8% % Margin 27.6% 16.6% 10.7% -33.6%
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Figure 210) Mukta Arts, key transactions
Date Type Company Buyer Notes
2003 Acquisition (100%)
Star Jack Mukta Arts Purchase price: Rs 0.1 million
Incorporated in Isle of Man and into film distribution.
2003 Joint Venture (50:50)
Mukta Arts Adlabs Investment of Mukta Arts: Rs 43.2 million. Expansion of digital film technology.
2001 Music Rights Acquisition (100%)
Mukta Arts film “Badhai Ho Badhai”
Universal Music India
Price Paid: Rs 25 million.
Film flopped at the box office.
2000 Film library Acquisition
Mukta Arts (8 titles)
Windmill Holdings
Purchase Price: US$ 3.13 million.
Acquired films broadcasted on South East Asian television channels.
Management and ownership
Subhash Ghai and family members control 70% of equity (March 2006).
Figure 211) Mukta Arts, key management
Name Position
Subhash Ghai Chairman and Managing Director
Mukta Ghai Director
Meghna Ghai Puri Director
Vashdev Bajaj Director
Anil Harsh Director
Manmohan Shetty Director
Parvez Farooqui Director
Ravi B Poplai Company Secretary and Compliance Officer
Vijay Choraria Director
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AA. NDTV
Activities: News television broadcasting
Ownership: Listed on the BSE and NSE (controlling stake with promoter)
Recent strategic developments: Entered radio market
Market data
Market codes: Reuters: NDTV.BO
Bloomberg: NDTV@IN
Current price: Rs 340.50
52 wk low: Rs 128.65
52 wk high: Rs 354.10
Share price performance (Last 12 mths)
NDTV is primarily a television broadcaster focused on the business and news markets. It has recently acquired a minority stake in a radio broadcaster. The company’s main channel is NDTV24X7, which is an English language news channel. The company began life as a provider of new content to other channels.
The company was founded by Prannoy Roy and is listed on the BSE and NSE.
Figure 212) NDTV, summary financials
y/e March (Rs millions) 2003 2004 2005 2006 CAGR
Total Revenue 1,054.7 626.3 1,565.9 1,941.5 22.5%
% Change 7.3% -40.6% 150% 24% Net profit (Loss) 230.7 (514.8) 291.8 (62.5) -147% % Change -0.8% -323% 157% -121% Net Margin 21.8% -82% 18.6% -3.2%
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Historical development
2006 � January- Ventured into FM radio broadcasting through acquisition of Radio Today Broadcasting Limited in collabration with Value Labs and Astro.
2005 � Ventured into South East Asian television broadcasting segment in collabration with Astro (Malaysia). Launch of two news channels.
� January- English business news channel “NDTV Profit” launched
2004 � May- Listed on National and Bombay Stock Exchanges
2003 � Entered television broadcasting through launch of NDTV 24X7 and NDTV India
1997 � Content provider for Star News and BBC India
1988 � NDTV incorporated as news and current affairs based television content provider for Doordarshan.
Activities
Television Broadcasting
NDTV broadcasts one business and two general news based television channels in India. In joint venture with Astro, the company launched two general news channels in South East Asia (2005).
Figure 213) NDTV, channels
Channel Market share Notes
NDTV 24X7 39.0%60 English News channel
Reach:12.7 million. Highest market share in Southern India (49.18%)61
NDTV India 20.3%62 Hindi News channel Reach: 25.2 million63. Highest market share in Eastern India (24.3%)
NDTV Profit 15.4% Business news channel Reach: 1.6 million. Highest market share in Northern India (23.8%)
Radio Broadcasting
NDTV ventured into FM radio broadcasting through the acquisition of a 20% stake in the Red FM radio business from the India Today Group. The acquisition was made as part of a consortium (including Astro of Malayasia and Value Labs). Red FM has radio operations in Mumbai, Kolkata and Delhi.
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Financials
For the last full year (end March 2006), NDTV, had total revenues of Rs 1,941million, and net loss of Rs 62.5 million, year-on-year net loss increase of 121%.
Figure 214) NDTV, financials
y/e March (RS million) 2003 2004 2005 2006 CAGR
Revenues by Type Advertising - 555.0 1,438.6 1,718.7 76%64 Business Income65 25.2 48.6 90.1 194.2 96.2% Others 24.5 22.7 37.2 28.5 5.1% Content 1,005.0 Total Revenues 1,054.7 626.3 1,565.9 1,941.5 22.5% Net profit (Loss) 230.7 (514.8) 291.8 (62.5)
Figure 215) NDTV , key transactions
Date Type Company Notes
January 2006
Divestment (100%)
Radio Today Broadcasting Limited
Value: Rs 1000 million.
FM radio operations acquired by consortium lead by Value Labs, Astro (Malaysia) and NDTV.
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Management and ownership
Figure 216) NDTV, key management and directors
Name Description
Dr. Prannoy Roy
Chairman and Wholetime Director
Served as Economic Advisor to Government of India (Ministry of Finance) from 1985-1987
Smeeta Chakraborti Chief Producer
Radhika Roy
Managing Dirctor
Worked as print journalist for ten years with Indian Express and India Today.
P.C Jameskutty Chief Financial Officer
KVL Narayan Roy
Wholetime Director
Joined NDTV in 1995.
Previously worked for Indian Revenue Services (1979-1994)
Rajdeep Sardesai Managing Editor
I.P Bajpai Senior Editorial Advisor
Rajiv Mathur Company Secretary
Figure 217) NDTV, key shareholdings
Shareholder % of capital (March 2006)
Promoter 54.78% Foriegn Institutional Investors 3.04%
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BB. Nimbus Communications
Activities: Sports content production and broadcasting
Ownership: Privately owned (Promoter and private equity)
Recent strategic developments: Launch of sports channels
Nimbus Communications is a leading Indian sports television content provider. The company produces sports programming for a range of sports, including cricket, hockey and soccer. In 2006, the company launched a sports TV channel called Neo Sports; it has plans to launch an additional two channels in the next 18 months.
Nimbus Communications is owned by its management and a number of private equity funds (including 3i).
In March 2006, the company won a contract for exclusive broadcast rights for a package of Indian national team cricket rights; Nimbus paid US$612 mllion for a four year contract for the rights.
Historical development
2007 � January – Raised Rs 5.57 billion in convertible debt from 3i, Cisco and Oman International Fund
2006 � September – Nimbus signs exclusive distribution agreement with Star TV
� May- Raised US$30 million (from Deutshce Bank) to fund launch of 3 sports channel
� March- Indian cricket broadcasting rights acquired for US$ 612 million.
� January- Three year domestic and international broadcasting rights of Pakistani cricket team.
2005 � August- 3i purchases 33% equity for US$45 million.
� April- Transatlantic sells 10.57% stake to Americorp Ventures for Rs 300 million
2000 � Cancelled IPO on BSE and NSE
� Joint venture (50:50) with World Sports Group Limited to form WSG Nimbus Pte Limited (Singapore). Investment of US$125,000 for 50% stake.
1997 � Ventured into digital media with Nimbus Online.
1994 � Converted into public limited company.
1993 � Establishment of Nimbus TV & Sport arm offering sports based television content.
1987 � June- Incorporated as private limited company.
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Management and ownership
Figure 218) Nimbus Communications, key management
Name Position
Harish Thawani Executive Chairman
Uday Sinhwala Chief Operating Officer (Television media marketing and TV Broadcasting)
Raj Kumar Goel Chief Financial Officer
Sunil Manocha Senior Vice President (Television & Media Marketing and Acquisitions)
Akash Khurana Chief Operating Officer (Motion Pictures)
Rahul Guha Vice President (Music)
Venu Nair Senior Vice President (Broadcasting)
Sanjeev Shroff Assistant Vice President (Marketing)
In addition to Harish Thawani, the largest shareholding is held by the UK private equity firm, 3i.
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CC. Padmalaya Telefilms
Activities: TV and film production
Ownership: Listed on the BSE and NSE (controlling stake with promoter)
Recent strategic developments: No major developments
Market data
Market codes: Reuters: PADM.BO
Bloomberg: PDMT@IN
Current price: Rs 13.27
52 wk low: Rs 9.50
52 wk high: Rs 19.30
Share price performance (Last 12 mths)
Padmalaya Telefilms is a film and television prodfuction company with a strong presence in local language production and animation. The company also offers a range of film processing and post-production services.
The company is listed on the BSE and the Hyderabad Stock Exchange. In 2004, the company was accused of accounting fraud by Zee Telefilms (which had owned a minority stake in the company).
Figure 219) Padmalaya Telefilms. summary financials
RS in Millions 2003 2004 2005 2006 CAGR
Total Revenue 902.3 965.7 215.3 141.5 -45.7% % Change 90% 7% -77.7% -34.2% Net profit (Loss) 169.9 -224.8 -31.7 -161.5 -148% % Change 59.5% -232% 85.8% -409% Net Margin 18.8% -23.3% -14.7% -114%
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Historical development
2005 � Animation and Media education centre (Padmalaya-Zica) launched in collabration with Apple
2004 � December- Zee Telefilms divested the stake due to alledged accounting fraud.
� March- Television content production deal with Mondo TV worth US$14 million.
� February- Seshagiri Rao appointed as Managing Director and Chairman
2003 � December- 2D animation project signed with European studio worth US$15 million.
� November- Produced animation serial “Bheema Keema” aired on Zee TV.
� August- Richhold Trading Private Limited, Shankar Lal Saraf and Madhu Devi Saraf purchased minority equity (5.55%).
2002 � March- Became a subsidiary of Zee Telefilms; acquired 64.3% in holding company Padmalaya Enterprises Private Limited.
2001 � Sold-off animation film production arm
2000 � Ventured into animation film production through joint venture with Film Club (USA) and Anglo American Film Distributors.
� May- Listed on Bombay and Hyderabad Stock Exchanges.
1991 � Seshagiri Rao founded Rajiv Ratna Cine Enterprises Private Limited (predecessor of Padmalaya Telefilms)
Television content production
Padmalaya Telefilms television production has focused on mythological (Swapnasundari etc), historical (The British Rule) and religious (Karna) themes. Majority of these programmes have been produced in South Indian local languages such as Telugu, Tamil and Malayalam (and also Hindi).
the company has built up an extensive library of local language content porgramming.
Film Production
Padmalaya Telefilms produces Hindi and South Indian movies. The company’s films have had moderate success at the box office.
Animation and commercials
Padmalaya Telefilms produces animated films for variety of clients including long term agreement with Mondo TV. Regional language (Tamil, Telugu and Malayalam) based commercials are produced for corporations operational in Southern India.
Media services
Padmalaya Telefilms manages one of the largest studios in Hyderabad for in-house and third party production. The studio hosts dubbing services (international movies into regional languages) along with pre and post production facilties.
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Management and ownership
Figure 220) Padmalaya Telefilms, key management and directors
Name Position
Seshagiri Rao Managing Director and Chairman
K Raghavendra Kumar
Additional Director
Ajitham G Kurup Additional Director
Bijay Khemka Additional Director
K Gopala Krishna Additional Director
Atul Goel Additional Director
K Shrinivasan Additional Director
Rajiv Garg Additional Director
G V Narasimha Rao Additional Director
A.S.Ram Kumar Company Secretary and Compliance Officer
Figure 221) Padmalaya Telefilms, key shareholdings
Shareholder % of capital (December 2006)
Seshagiri Rao & associates 22.51% Corporates 14.97%
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DD. Prasar Bharti
Activities: TV and radio broadcasting
Ownership: State owned
Recent strategic developments: Launch of DTH offering
Prasar Bharti is the holding organisation for India’s public service broadcasters, Doordarshan (television) and All India Radio. Prasar Bharti reports into the Ministry of Information & Broadcasting.
Public service broadcasting is funded through a misture of government funding and advertising and sponsorship. Both Doordarshan and All India radio are facing increasing competition as the commercial broadcasting market develops.
Figure 222) Prasar Bharti, summary financials
y/e March
RS (Billions)
2001 2002 2003 2004 2005 2006 CAGR
Total Revenues 7,100 7,120 6,860 6,740 8,310 11,680 10.4% % Change 0.3% -3.7% -1.7% 23.3% 40.5%
Historical development
2006 � Distribution of four Doordarshan channels in United States for US$ 6.3 million via EchoStar.
2005 � April- Increase of 20% in advertising rates on DD News channel.
2003 � Launch of DTH offering, DD Plus
2002 � August- Strategic alliance with Modi Entertainment Group for converting DD Sports into free-to-air television channel.
1936 � Radio broadcasting re branded to AIR (All India Radio).
1927 � Indian Broadcasting Service (radio) launched in Mumbai and Kolkata (former Calcutta).
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Doordarshan
Doordarshan broadcasts 21 national and local television channels.
Figure 223) Doordarshan, main channels
Channel Genre Description
DD National General Entertainment
Free-to-air flagship channel featuring serials, dramas, theatre, news, sports and education updates. Channel has coverage of 89.6% population of India66.
DD News International and dometic news
Launched in September 2003; with coverage of 44.9% of Indian population67.
DD Sports Sports updates Free-to-air channel featuring cricket, hockey and football matches along with player interviews and analysis. Main focus on domestic sports68.
DD India General Entertainment
Channel targetting international audiences featuring serials, sports updates, business and regional language based programmes.
Market share: 8%69
Gyandarshan Sectors and Informative
Featuring information on agriculture, information technology, telecommunication, career development, science, hygiene etc sectors.
Radio broadcasting
All India Radio broadcasts International, national, regional and local based radio channels in all genres (music, current affairs & news, general entertainment etc).
Figure 224) All India Radio, channels
Network Genre Description
National General Entertainment Offered in three languages70; with coverage of 76%71 of Indian population.
Features: radio shows, comedy shows, news bulletin, movie reviews, songs etc.
FM western music, Indian classical and current affairs
Three FM networks: Rainbow, FM Gold and FM Classic Music
Vividh Bharti Music Classical music (Hindi)
External Regional and International language networks
Stations offered in regional (Marathi, Bengali, Telugu, Punjabi etc) and international languages (Arabic, French, German)
Financials
For the last full year (end March 2006), Prasar Bharti, had total revenues of Rs 11.68 billion, year-on-year increase of 40%. The growth of Doordarshan’s revenues was attributed to increased cricket and fim audiences. All India Radio’s revenues increased Rs 1.1 billion due to contribution from non-profit organisations (e.g. National AIDS Control).
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Figure 225) Prasar Bharti, financials
y/e; March (Rs billion) 2001 2002 2003 2004 2005 2006 CAGR
Revenues by Type
All India Radio 0.73 0.96 1.32 1.41 1.61 2.68 30%
Doordarshan 6.37 6.15 5.54 5.33 6.7 9.0 7.2%
Total Revenues 7.1 7.12 6.86 6.74 8.31 11.68 10.4%
Management
Figure 226) Prasar Bharti, key management and direc tors
Name Position
M.V. Kamath Chairman
K.S.Sharma Chief Executive Officer
D.P.S Lamba Director of Personnel
Bhupen Hazarika Partime Board of Director
Chitra Mudgal Partime Board of Director
M.J. Mehta Partime Board of Director
R.N. Bisaria Partime Board of Director
Pradeep Singh Additional Secretary
Navin Kumar Director General (DD)
Brijeshwar Singh Director General (Akashvani)
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EE. Pritish Nandy Communications
Activities: Film and TV production
Ownership: Listed on the BSE and NSE (controlling stake with promoter)
Recent strategic developments: No major developments
Market data
Market codes: Reuters: PNCL.BO
Bloomberg: PRTN@IN
Current price: Rs 64.95
52 wk low: Rs 29.85
52 wk high: Rs 75.20
Share price performance (Last 12 mths)
Pritish Nandy Communications is a film and television production company active in the low budget bilingual Hindi film sector. The company has recently launched some activities in digital media.
The company is listed in the BSE and NSE and the founder, Pritish Nandy controls a 39% stake. The company started as an advertising agency 1993.
Figure 227) Pritish Nandy Communications, summary f inancials
y/e March, (Rs millions) 2003 2004 2005 2006 CAGR
Revenues72 388.9 295.9 337 327.5 -5.5% % Change 95.7% -24% 13.9% -2.8% PBT73 23.5 49 67.8 69.7 43.6% % Change -25.9% 108.5% 38.3% 2.8% % Margin 6.0% 16.5% 20.1% 21.3%
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Historical development
2005 � October- Big budget Hindi film “Ek Khiladi Ek Haseena” released.
� April- Low budget bilingual (English-Hindi) “Hazaaron Khwaishein Aisi” released worldwide.
� January- Co-Production of film titles with Balaji telefilms for 2-3 years.
2004 � October- Board of Directors approve foreign institutional investor shareholding to 60%.
� June- Winstar India Investment Company purchase 8.97% of equity.
2003 � March- International distribution rights of bilingual home production “Jhaankar Beats” sold to Fairdel International.
2002 � Ventured into film production with low budget Hindi films “Kuch Kathi Kuch Methi and Bollywood Calling.
� December- Produced big budget film Kaante.
2000 � December- Listed on National and Bombay Stock Exchanges
Film Production
In film production, the company has produced a range of low and big budget Bollywood movies. In 2005, it released 4 Hindi movies (2 small and 2 1 big budget). The company also prodcues Hindi and Tamil language programming in the business, general entertainment and current affairs genres.
Pritish Nandy Communications has expanded into organising film industry events (Sansui Awards Ceremony & Talent Hunt in western dance).
Digital Media
Pritish Nandy Communications operates 4 e-commerce websites in the film and entertainment sectors; these include a film ticketing website, mumbaiticketmastering.com and an online art auction website, indianartauction.com.
Financials
For the last full year (end March 2006), Pritish Nandy Communications, had segment revenues of Rs 327 million, and Profit before tax of Rs 70 million, year-on-year segment revenue decrease of 3%.
Figure 228) Pritish Nandy Communications, financial s
y/e March (Rs million) 2003 2004 2005 2006 CAGR
Revenues by Type Television & Film Production 377.5 284.2 321.5 315.4 -5.7% Digital Media & Events 11.4 11.7 15.5 12.1 1.9% Total r evenues 388.9 295.9 337 327.5 -5.5% Profit Before Tax74 23.5 49 67.8 69.7 43.6% % Margin 6.0% 16.6% 20.1% 21.3%
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Management and ownership
Figure 229) Pritish Nandy Communications, key manag ement
Name Position
Pritish Nandy Chairman
Pallab Bhattacharya Chief Executive Officer and Wholetime Director
Rina Pritish Nandy Director
Rangita Pritish Nandy Wholetime Director
Ashok Bhattacharya Chief Financial Officer
Bobbie Ghosh General Manager (Production)
Elton Menezes General Manager (Wellness)
Gauri Sahasrabudhe Company Secretary and Compliance Officer
Pritish Nandy (Founder & Chairman), Rangita Nandy (wife) and other family members have a 39.5% of controlling stake in the company.
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FF.PVR Limited
Activities: Multplex operations, film distribution
Ownership: Listed on the BSE and NSE (controlling stake with promoter)
Recent strategic developments: Multiplex roll-out
Market data
Market codes: Reuters: PVRL.BO
Bloomberg: PVRL@IN
Current price: Rs 195.25
52 wk low: Rs 190.00
52 wk high: Rs 337.00
Share price performance (Last 12 mths)
PVR is the largest multiplex operator in India with a total of 77 screens across 16 multiplexes (and 1 single screen cinema). The company has a very active programme of developing new multiplexs across India and is also involved in film distribution.
PVR Limited is listed on the BSE and NSE; the private equity fund “ICICI Ventures owns an 18% stake. The company was initially incorporated as Priya Village Roadshow in a joint venture with the overseas multplex operatorm Village Roadshow in April 1995.
Figure 230) PVR Limited, summary financials
RS in Millions 2003 2004 2005 2006 CAGR
Total Revenue 393.6 497.4 706.6 1,074.3 39.2% % Change 26.4% 42% 52% EBITDA 76.5 83.8 131.7 193.1 35.7% % Change 9.5% 57.1% 46.6% Net profit (Loss) 1.3 15.6 37.4 54.8 243.7% % Change 1100% 139.7% 46.5% % EBITDA Margin 19.4% 16.8% 18.6% 18%
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Historical development
2006 � July- Expansion into core Northern India region with opening of 2 new multiplex cinema malls in Delhi suburb regions.
� April- Board of Directors approve 10% interim dividend.
� April- Entered North Eastern region with 4 screen multiplex cinema mall in Lucknow.
� March- Acquired distribution rights of 15 bid budget Hindi films for Rs 75 million.
� March- IPO on National and Bombay Stock Exchanges.
� February- 3 screen multiplex cinema mall
� January- Agreement signed to open 3 multiplex cinema halls in State of Punjab (100% entertainment tax exemption)
2004 � November- Opened India’s largest multiplex cinema mall with 11 screens in Bangalore (Southern India).
� July- Launched free film based periodical “PVR Movies” in Delhi available at PVR multiplex cinema malls.
� February- Joint venture agreement with K Sera Sera Production brand “Factory” for distribution of 9 big budget films across India.
2003 � March- ICICI Venture Funds Management Company Limited made strategic investment worth Rs 380 million for 38% stake.
2002 � November- Village Roadshow Limited divested entire shareholding
1997 � Opened first multiplex cinema hall “PVR Saket” in Delhi
1995 � April-Joint venture between Priya Exhibitions Private Limited and Village Roadshow Limited to form PVR Limited.
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Activities
Multiplexes
PVR Limited manages and controls 16 multiplex cinema malls in India; th enumber of visitors grew 78% to 8.78 million in the year to March 2006. the company’s growth strategy has broadened to develop lower cost budget multiplexes in small citieis.
Figure 231) PVR Limited, multiplexes
Cinema Location Screens Seats Opening date
Anupam Delhi 4 1,000 Jun-97 Priya Delhi 1 944 Jan-00 Naraina Delhi 4 830 Aug-01 Vikaspuri Delhi 3 921 Nov-01 Metropolitan Mall Gurgaon 7 1,310 May-03 Crown Plaza Faridabad 2 504 May-04 Plaza Delhi 1 300 May-04 Forum Mall, Bangalore Karnataka 11 2,011 Nov-04 EDM Uttar Pradesh 3 726 Mar-05 Central Mall, Hyderabad Andhra Pradesh 3 926 Feb-06 Rivoli Delhi 1 329 Feb-06 Treasure Island, Indore Madhya Pradesh 5 1,140 Apr-06 Sahara Mall, Lucknow Uttar Pradesh 4 874 Apr-06 Juhu Mumbai 2 580 Apr-06 Nirmal Lifestyle Mulund
Mumbai 6 1,750 Jun-06
Sahara Mall Gurgaon 2 528 Jul-06 Franchisee Spice Noida 8 1,821 Dec-05 SRS Mall Faridabad 3 776 Nov-04 Opened in late 2006 Latur, Maharashtra 3 1148 Aurangabad, Maharashtra 3 1151
Film Distribution
PVR Limited acquires and distributes low, medium and big budget films through wholly owned subsidiary “PVR Pictures”. The subsidiary acquires Hindi and English film titles in all genres.
Financials
For the last full year (end March 2006), PVR Limited, had total revenues of Rs 1,074 million, and Net profit of Rs 55 million, year-on-year Net profit increase of 46%.
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Figure 232) PVR Limited, financials
y/e March (Rs millions) 2003 2004 2005 2006 CAGR
Revenues by Type Sale of Tickets 395.8 417.0 446.2 704.6 21% Sale of film rights and distribution 2.7 1.4 0.5 2.0 -9.4% Sale of Food 86.9 110.5 142.7 212.5 34.7% Royalty 5.4 6.6 8.7 12.0 30.1% Advertising revenue 45.9 60.6 87.2 90.5 25.1% Management fees - - 1.0 8.7 n.d Other 10.3 15.5 20.3 44.2 61.7% Total revenues (after entertainment tax) 393.6 497.4 706.6 1,074.3 39.2%
EBITDA 76.5 83.8 131.7 193.1 35.7% Net profit 1.3 15.6 37.4 54.8 243.7% % Net Margin 0.3% 3.1% 5.3% 5.1%
Figure 233) PVR Limited, segment analysis
Revenue (2006)
Management fees0.8%
Food and drink19.8%
Ticket sales65.6%
Other 4.1%
Royalty 1.1%
Advertising 8.4%
Film distribution0.2%
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Figure 234) PVR Limited , key transactions
Date Type Company Buyer Notes
March 2006
Acquisition N.A. PVR Distribution rights of 15 big budget films purchased for Rs75 million.
March 2003
Private equity stake (38.45%)
PVR Limited India Advantage Fund 1
ICICI Venture Funds Management Company Limited through India Advantage Fund 1 invested Rs 380 million.
Management and ownership
Figure 235) PVR Limited, key management and directo rs
Name Description
Ajjay Bijli Chairman and Managing Director
Sanjeev Kumar Appointed as Executive Director (July 2003)
Amit Burman Non-executive director
Sumit Chandwani Director (Nominee of ICICI Venture)
The Chairman Ajjay Bijli and his associated companies control 40% of the equity (September 2006).
Figure 236) PVR Limited, key shareholdings
Shareholder % of capital (September 2006)
Promoters: Bijli Investments Private Limited 21.51% Priya Exhibitors Private Limited 18.93% India Advantage Fund 1 (ICICI Ventures) 18.59%
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GG. Sahara One Media & Entertainment
Activities: Diversified media (publishing and broadcasting)
Ownership: Listed on the BSE and NSE (controlling stake with promoter)
Recent strategic developments: No major developments
Market data
Market codes: Reuters: SAHM.BO
Bloomberg: SHRA@IN
Current price: Rs 396.00
Mkt. Cap.
52 wk low: Rs 231.25
52 wk high: Rs 523.50
Share price performance (Last 12 mths)
Sahara One Media & Entertainment (“SOME”) is the media subsidiary of a large Indian conglomerate. The company is active in television broadcasting and production, film production, newspapers, magazines and radio.
SOME is listed on a number of exchange, but the founding Roy family still hold 90% of the equity. The company was formed in 2000 with the launch of Sahara TV (later Sahara One).
Figure 237) Sahara One Media & Entertainment, summa ry financials
RS in Millions 2003 2004 2005 2006 CAGR
Total Revenue 655.5 1,205.3 2,146.9 2,120.5 47.3% % Change -10.7% 83.8% 78.1% -1.2% Net profit (Loss) 21.1 66.4 65.1 72.3 50.1% % Change 21.6% 216% -2% 11.1% Net Margin 3.2% 5.5% 3% 3.4%
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Historical development
2006 � February- Bennett Coleman & Company Limited purchased minority stake.
� January- Manage and control of advertising sales business of Aastha Broadcasting Network.
2005 � December- Change of name from Sahara India Mass Communication.
� November- Standalone video embedded film portal “Homedeliver.com”.
� October- Launched film based television channel “Filmy”.
� September-Signed Hollywood star “Collin Farrell” for Tree of Life movie due release in 2008.
� August- Acquisiton of 28 film library from Bollywood producer “Boney Kapoor”.
� August- Shantonu Aditya appointed as Chief Operating Officer.
� July- Appointed Shailesh Kapoor as Marketing Head of Filmy television channel.
� July- Board of Directors approve film production investment of Rs 3 billion for next two years.
2004 � January- Share subscription agreement with K Sera Sera Production worth 150,000 equity shares.
� Signed leading Bollywood actor Karishma Kapoor for Rs 100 million.
2003 � January- Fire break out at corporate office destroyed key financial accounts
2000 � Sahara TV (predecessor of Sahara One) free-to-air channel launched in Hindi general entertainment genre.
Activities
Television
Sahara One Media & Entertainment broadcasts national, regional and local free-to-air and pay channels in Hindi language.
Figure 238) Sahara One Media & Entertainment, chann els
Channel Genre Description
Sahara One General Entertainment
National, hindi language channel
Filmy Film Hindi movies
Sahara Samay News 36 local and regional news channel network featuring in depth coverage of local news,
Film Production
Sahara One Media & Entertainment produces Hindi language films The company has recently released a bilingual (Hindi and English) animation feature on hindu mythology.
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Publishing
SOME publishes three weekly and two daily newspapers in English, Hindi and Urdu languages.
Figure 239) Sahara One Media & Entertainment, publi cations
Title Language Frequency
Sahara Samay Hindi Weekly
Sahara Time English Weekly
Aalmi Samay Urdu Weekly
Rashtriya Sahara Hindi Daily
Roznama Rashtriya Sahara Urdu Daily
Radio broadcasting
SOME operates a number of radio networks on the WorldSpace satellite radio service.
Financials
For the last full year (end March 2006), Sahara One Media & Entertainment, had total revenues of Rs 2,120 million, and Net profit of Rs 72.3 million, year-on-year Net profit increase of 11%.
Figure 240) Sahara One Media & Entertainment, finan cials
y/e March (Rs million) 2003 2004 2005 2006 CAGR
Revenue Television Channel n.a 1,053.1 1,354.9 n.a Film Production n.a - 600 n.a Newspaper and Radio n.a 152.2 192 n.a Total revenues 655.5 1,205.3 2,146.9 2,120.5 47.3% Net profit 21.1 66.4 65.1 72.3 50.1% % Margin 3.2% 5.5% 3.0% 3.4%
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Figure 241) Sahara One Media & Entertainment, segme nt analysis
Management and ownership
Figure 242) Sahara One Media & Entertainment, key m anagement
Name Position
Subrata Roy Sahara Chairman and Chief Executive Officer
Shantanu Aditya Chief Operation Officer
J B Roy Director
O P Shrivastava Director
V B Chandra Director
Bimal Kishore Nanda Company Secretary
Shailesh Kapoor Marketing Head of Filmy
Figure 243) Sahara One Media & Entertainment, key s hareholdings
Shareholder % of capital (March 2006)
Subrata Roy and family members 90.58%
Revenue (2005)
Film Production27.9%
Television63.1%
New spaper and Radio8.9%
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HH. Sandesh
Activities: Newspaper publishing
Ownership: Listed on the BSE and NSE (controlling stake with promoter)
Recent strategic developments: Investment by the Times of India group
Market data
Market codes: Reuters: SNDH.BO
Bloomberg: SDSH@IN
Current price: Rs 161.85
52 wk low: Rs 78.10
52 wk high: Rs 224.40
Share price performance (Last 12 mths)
Sandesh is a Gujurat-based newspaper publisher; its main title is the second largest readership daily newspaper in Gujarat, Sandesh. It also publishes a range of magazines and websites. It’s only publishes in the Gujurati language.
Sandesh is listed on a number of exchanges, including the BSE and NSE. The founding family have a 74.5% equity (March 2006).
Figure 244) Sandesh, summary financials
RS in Millions 2003 2004 2005 2006 CAGR
Total Revenue 1,333.4 1,378.3 6,694.3 1,444.4 2.7%
% Change 3.4% 385.6% -78.4% Net profit (Loss) 245.5 96.5 67.1 29.4 -50.3% % Change -60.7% -30.4% -56.2% Net Margin 18.4% 7.0% 1.0% 2.0%
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Historical development
2006 � October – Allocation of a 12% minority stake to the Times of India group
� May- Termination of media and advertising contract with Ad Space Mart
� January- Shreyas Pandya appointed as Additional Director
2005 � December - Relaunch of newspaper
2004 � September- Annual dividend of 30% approved
� April- Launched import-export arm.
2002 � April- Ventured into health care business through Sandesh Healthcare
� March- Parthivbhai Patel elected as Additional Director.
1994 � Listed on 6 Stock Exchanges (Bombay, National, Saurashtra etc). Oversubscribed 15 times.
1988 � Investment subsidiary “Sarvashanti Investments Private Limited” established.
1985 � Launch of Baroda edition
1958 � Late Chimanbhai Patel family took over the management control
1943 � March- Incorporated with first edition of Sandesh
Newspapers
Sandesh is a Gujarati language daily newspaper, with a circulation of approximnately 740,000. The newspaper is published in 6 print editions and also in an online version (sandesh.com).
Periodicals
Sandesh publishes 5 Gujarati language periodicals.
Figure 245) Sandesh, periodicals
Title Genre Frequency
Stree Women Weekly
Joytish Deep Astrology Monthly
Share Bazaar Business Weekly
Darma-Sandesh Culture and Society Fortnightly
Sandesh Pratyaksha Panchang Annual news and events Annual
Financials
For the last full year (end March 2006), Sandesh, had total revenues of Rs 1444 million, and Net profit of Rs 29.4 million, year-on-year Net profit decrease of 56%.
Figure 246) Sandesh, financials
y/e March (RS million) 2003 2004 2005 2006 CAGR
Total Revenue 1,333.4 1,378.3 6,694.3 1,444.4 2.7%
Net profit 245.5 96.5 67.1 29.4 -50.3%
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Management and ownership
Figure 247) Sandesh, key management and directors
Name Position
Falgunbhai Chimanbai Patel Chairman and Managing Director
Mahendrabhai Kanaiyalal Shah Director
Chandravadan Ramanlal Shah Director
Harish Motwani Company Secretary
Pannaben Falgunbhai Patel Director
Sudhirbhai Mehta Director
Bhadreshbhai J Mehta Director
Sudhirbhai I Nanavati Director
Parthivbhai Falgunbhai Patel Director
Mukeshbhai M Patel Director
Sandesh is managed by Patel family members; controlling 74.5% of equity. Foreign shareholding is mere 0.11% (March 2006).
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II. Saregama Activities: Music publishing
Ownership: Listed on the BSE and NSE (controlling stake with promoter)
Recent strategic developments: Expanded into TV and film production
Market data
Market codes: Reuters: SARE.BO
Bloomberg: GCOI@IN
Current price: Rs 228.60
52 wk low: Rs 121.85
52 wk high: Rs 330.00
Share price performance (Last 12 mths)
Saregama is India’s leading recorded music and music publishing company. The company publishes in all major Indian languages and distributes music in India and abroad. In 1998, it launched a venture producing films and television programmes.
Saregama is listed on the BSE and NSE; its parent company RPG Enterprises owns a 51% equity interest.
Figure 248) Saregama, summary financials
y/e March (Rs Millions) 2003 75 200476 2005 2006 CAGR
Total Revenue 1,270.2 771.2 1,135.9 1,188.7 -2.1% % Change 3.0% -39.2% 47.3% 4.6% Net profit (Loss) -439.5 -211 52.1 88.7 148% % Change -70.6% 51.9% 124.6% 70.2% % Net Margin -34.6% -27.3% 4.6% 7.5%
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Historical development
2005 � May- Sonata Investments Limited acquired minority stake.
� April- EMI Records divested remaining equity.
� March- Two year home video distribution agreement with MGM.
2004 � March- Ventured into digital music download arena with tie-ups with itunes, Real Networks and Loudeyi.
� March- Home video distribution agreement with BBC Worldwide through VCD and DVD’s.
2003 � November- Board of Director restricted individual film budget to Rs 50 million.
� June- Majority stake purchased in Min Bimbangal Productions for Rs 100 million.
� July- Produced first Telugu mythological television content.
� March- Saregama Films Limited incorporated for producing small to medium budget movies.
2002 � Distribution agreement with Universal pictures Entertainment and Warner in home video segment
2000 � Launched B2C e-commerce portal “Hamara CD”.
1998 � Ventured into film production with Saregama Plc subsidiary listed on OFEX (United Kingdom).
1985 � RPG Enterprises acquired EMI Records (India) from EMI (United Kingdom)
Activities
Music Production
Saregama is the largest music producer in India offering it in 13 languages (Hindi and regional languages). The company’s repertoire extends across Hindi, classical, regional, gazals, mythological and pop. The Hindi genre contributed 40% of music revenues in 2004.
Saregama also distributes music content to radio stations, television channels, restaurants.
Film and television
Saregama film production has focused on small budget hindi films. In television, it produces Telugu, Tamil and Malayalam language programming for a number of South Indian channels (Surya TV, Udaya TV, Sun TV and Gemini TV).
Home Entertainment Distribution
Saregama distributes English movies and television programmes in India and overseas markets. It has a number of partnerships with companies such as BBC Worldwide, MGM, Warner and Universal Pictures.
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Financials
For the last full year (end March 2006), Saregama, had total revenues of Rs 1,188 million, and Net profit of Rs 88.7 million, year-on-year Net profit increase of 70%.
Figure 249) Saregama, financials
y/e; March (RS million) 2004 2005 2006 CAGR
Revenue by spurce Music 748.7 1,048 973.3 14.0% Television content/ Film 22.7 97.7 169.2 173.0% Home Video n.a n.a 46.2 (Elimination) (9.9) n.d Revenue by Geography India 691.5 1,042.7 n.a Overseas 79.7 93.1 n.a Total Revenues 771.2 1,135.9 1,188.7 24.2% Net profit (Loss) -211 52.1 88.7
Figure 250) Saregama, segment analysis
Figure 251) Saregama , key transactions
Date Type Company Buyer Notes
April 2005 Divestment
(7.71%) Saregama India EMI
Records Transaction price: Approximately Rs 72 million.
June 2003
Acquisition (55%)
Min Bimbangal Productions
Saregama India
Transaction cost: Rs 100 million
Production enterprise in Chennai
Revenue (2006)
Television content/ Film
14%
Music82%
Home Video4%
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Management Figure 252) Saregama, key management and directors
Name Position
R.P Goenka Chairman
S.Goenka Vice Chairman and Board of Director
D.R Mehta Chief Executive Officer
S.Banerjee Board of Director
P.K Mohapatra Board of Director
H.Neotia Board of Director
J.N.Sapru Board of Director
D.Basu Board of Director
D.R Mehta Managing Director
T.K Banerjee Company Secretary
Harish Dayani Chief Executive (Film Business)
Ownership and management
Saregama is subsidiary of RPG Enterprise (managed by Goenka family members) and associate companies; with controlling stake of 51% (June 2006).
Figure 253) Saregama, key shareholdings
Shareholder % of capital (December 2006)
Promoter group 50.77% Sonata Investments Limited 6.04%
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JJ. Shringar Cinemas
Activities: Multiplex operator, filmdistribution
Ownership: Listed on the BSE and NSE (controlling stake with promoter)
Recent strategic developments: Ongoing multplex development
Market data
Market codes: Reuters: SHRC.BO
Bloomberg: SCIN@IN
Current price: Rs 59.65
52 wk low: Rs 34.50
52 wk high: Rs 78.80
Share price performance (Last 12 mths)
Shringar Cinemas is an entertianment company with operations in Indian film distribution, multplex development and management. In the multiplex space, the company operates under the Fame brand and has become the fourth largest operator in India.
Figure 254) Shringar Cinemas, summary financials
y/e March (Rs Millions) 2005 2006 % Change
Total Revenue 379 581 53.3 EBITDA 34 57 67.6 % Margin 9% 9.8%
Historical development
2006 � Raise US$20 milion through an FCCB offering
2005 � IPO on BSE and NSE
� Sell 15% stake to private equity firm, Temasek
2002 � Entered multplex market
2001 � Equity investment by GW capital 935% stake for Rs 160 million)
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Activities
The company’s key focus is the development and management of multiplexes. In addition to the 7 multiplexes it owns and operates (Andheri is a 50:50 joint venture with Adlabs Films), another 16 are planned to be operational by the end of financial year 2008. Shringar’s role in multplex management extends beyond films to include the development of food courts.
If the company’s multiplex expansion is successful, it should eventually have a strong presence across Maharashtra, Punjab and West Bengal.
Figure 255) Shringar Cinemas, Current multiplexes
State City No. of screens No. of seats
Maharasthra Mumbai (Andheri) 5 1342
Mumbai (Malad) 6 1571
Mumbai (Kandivali) 4 1275
N ashik 3 1407
Pune 3 1009
West Bengal Kolkata 4 897
Gujurat Surat 6 1850
The company started as a film distribution business almost 50 years ago and continues to expand its activities in this sector too. It distributes both Bollywood and overseas films, with a capacity of approximately 1 film a month. Film distribution revenues contribute between 10%-15% of group revenues.
Management and ownership
Figure 256) Shringar Cinemas, key management and di rectors
Name Position
Mr.Shyam Shroff Chairman Mr. Shravan Shroff Director Mr. Balkrishna Shroff Director
Figure 257) Shringar Cinemas, key shareholdings
Shareholder % of capital
Promoters 47.75 Foreign institutions 15.98
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KK. Sony Entertainment Television
Activities: TV broadcasting
Ownership: Privately owned (Sony owns 61%)
Recent strategic developments: Planned IPO in 2007
Sony Entertainment Television (SET) is one of India’s leading commercial broadcasters. The company broadcasts a range of film, general entertainment and sports channnels.
Figure 258) Sony Entertainment Television, televisi on channels
Channel Description
SET General entertainment SET PIX English language entertainment SAB General entertainment targeted at 24-35 year olds MAX Premium movies and special events
SET established a joint venture with Discovery Networks to distribute both companies channels. The venture is known as the One Alliance bouquet and it includes channels from SET, Discovery, MTV, Nick, Animax and NDTV.
Historical development
2006 � February – launch of PIX channel
2005 � SET acquires SAB TV from Adhikari Brothers
2002 � One Alliance formed with Discovery Networks
1996 � SET reaches over 50% of cable TV households
1995 � SET launches Hindi language channel
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Management and ownership
SET is planning an IPO for early 2007.
Figure 259) Sony Entertainment Television, key mana gement
Name Position
Kunal dasGupta CEO Rohit Gupta Executive vice president Albert Almeida Executive vice president
Figure 260) Sony Entertainment Television, key shar eholdings
Shareholder % of capital
Sony Pictures Entertainment (SPE) 61 Capital International 8
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LL.Star TV (News Corporation)
Activities: TV broadcasting
Ownership: Owned by News Corporation
Recent strategic developments: Launch of DTH offering, Tata Sky
Star TV is a leading commercial TV broadcaster. The company entered the Indian market in 1991 and has grown into one of the top three broadcasters. In the last 2 years, Star TV has expanded into television and film production, DTH services and radio Star TV’s parent company, News Corporation is also active in the Indian outdoor advertising market.
Star TV has operations across the Asia region and is ultimately owned by the US-based News Corporation.
Historical development
2007 � February – Resignations of Michelle Guthrie, (CEO, Star Group); Peter Mukerjea (CEO, Star India) and Sameer Nair (CEO, Star Entertainment)
2006 � November – negotiating to purchase a 20% stake in a radio operation.
� August – launch of Tata Sky DTH platform (Star TV is a 20% shareholder)
2004 � August – Acquisition of stake in Balaji Telefilms
� June – Launch of Star Utsav channel
2003 � September – Sales of majority stake in Star’s news channel to Anand Bazar Patrika group
1994 � Launch of Star India service
1991 � Star TV starts broadcasting into India from Hong Kong
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Activities Television
Star TV distributes 18 channels in India of which a small number are distributed on behalf of other broadcasters (including National Geographic, A1, History Channel, Disney Channel, Toon Disney, Hungama and Fox News).
Star TV’s Star Plus channel has become the market leader among general entertainment channels. Key to achieving this success has been a significant investment in content, especially successful overseas formats. The most important of these formats has been the Indian version of ‘Who wants to be a millionaire’ – Kaun Banega Crorepathi. This show has singlehandedly helped Star Plus to achieve leadership in the prime time evening slot and to sell a significant amount of advertising at premium prices.
Figure 261) Star TV, television channels
Channel Language Description
Star Plus Hindi General entertainment
Star One Hindi General entertainment
Average reach of 37.6 million / month (2005)
Star Utsav Hindi General entertainment, targeted at small cities and towns
Focused on soaps
Star Vijay Tamil General entertainment
Channel V Hindi/English Music channel
Star Ananda Bengali News channel
Star Movies English Movies
Star World English World television
Star Gold Hindi Movies.
ESPN Star Sports
English World sports
Star TV has a number of other minority investments in content production and distribution companies. These include:
� Balaji telefilms. Star TV has a 25% stake in the television and film production company, Balaji Telefilms. This has enabled Star TV to secure access to some of India’s most popular soaps.
� Hathway Cable. Star TV has a 26% stake in this cable TV operator (acquired in September 2000). Hathway Cable has a total subscriber reach of 5 million.
� Tata Sky. Star TV is also a 20% shareholder in the DTH platform, Tata Sky; the other shareholders are the Tata Group and Temasek Holdings. Tata Sky launched its DTH offering in August 2006 and has built up a subscriber base of 200,000.
� Media Content and Communications Services (MCCS). Star TV was required to sell a majority stake in its news broadcasting arm, MCCS to an Indian company. Today it owns a 49% stake in MCCS and the remainder is owned by the Ananda Bazaar Patrika group
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Radio
Star TV is in the process of acquiring a 20 % stake in Music Broadcast Pvt Ltd (MBPL), which runs the Radio City network. MBPL is owned by a private equity fund (India value Fund with 75%) and Radiovani (has a 25% stake).
MBPL is operational in Mumbai, Delhi, Bangalore, Lucknow, Hyderabad, Chennai and Jaipur. The company also won 15 licences in Phase 2 of FM radio licencing and has plans to launch services in a number of cities in Maharashtra, Gujarat and Tamil Nadu.
Online
Star TV operates the Indya.com portal and is also developing a range of services for mobile platforms. The mobile services, include short episodes of key television programmes.
Management and ownership
At the time of publication, Star TV is yet to name a new management team for its India operation. A new CEO, Paul Aiello has been appoitned to head Star Group Asia.
Star TV is a wholly owned subsidiary of News Corporation.
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MM. Sun TV
Activities: Diversified media group focused on Southern states
Ownership: Listed on the BSE and NSE (controlling stake with promoter)
Recent strategic developments: Merger with two other companies owned by promoter
Market data
Market codes: Reuters: SUTV.BO
Bloomberg: N.A.
Current price: Rs 1,679.80
52 wk low: Rs 840.25
52 wk high: Rs 1,849.00
Share price performance (Last 12 mths)
Sun TV is the leading media company in the south Indian states of Tamil Nadu and Kerala. The group is active in television broadcasting, radio, film and online services; its flagship offering is the Sun TV channel. In 2006, the founder agreed to merge his other media interests (Gemini TV, Udaya TV) with Sun TV, creating a media company with broadcasing operations in the Tamil, Malayalam, Telugu and Kannada languages.
The company was established in 1985 and underwent an IPO in February 2006. Its founder, Kalanithi Maran holds the controlling stake.
Figure 262) Sun TV, summary financials
y/e March (Rs millions) 2002 2003 2004 2005 2006 CAGR
Total Revenues 1607.2 2181.9 2683.2 3010.5 3219 19.0%
% Change 8.9% 35.8% 22.9% 12.2% 6.9% Net profit (Loss) 467.1 584.6 772.9 779.2 1312 29.5% % Change 14.3% 25.2% 32.2% 0.8% 68% % Net Margin 29.1% 26.8% 28.8% 25.9% 40.8%
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Historical development
2007 � Agreement to merge Sun TV, Gemini TV and Udaya TV
2006 � February - Draft filed for an IPO.
� February - M K Dayalu diluted 5.75% stake for Rs 365 million.
2005
� December - Name changed to Sun TV Limited.
� January - Launched Kiran TV.
2004 � July - Sun TV and Raj TV will be part of Doordarshan network (Direct to home service).
� July - Physical asset expansion deal regarding purchase of ten grounds from Madras Stock Exchange for Rs 33 million.
2003 � May - Suryan FM station launched in Chennai.
� March - The Tamil radio station “Suryan FM” launched in Coimbatore and Tirunelveli.
Activities Television
The company’s product portfolio consists of television channels & content production, FM radio stations and print publications i.e. newspapers & periodicals. All the products are offered in four regional languages i.e. Telugu, Tamil, Malayalam and Kannada. The company broadcasts many of its channels in overseas markets too (including Singapore and the United States).
Figure 263) Sun TV, television channels
Channel Language Description
Sun TV Tamil General entertainment
Free to air channel
Audience share of 47.2% (2005) in Tamil Nadu.
Sun News Tamil News and current affairs channel.
Audience share of 1.4%(2005) in Tamil Nadu.
KTV Tamil Pay TV movie channel
Audience share in Tamil Nadu is 16.9%.
Sun Music Tamil Music channel
An audience share of 6.2%.
Surya TV Malayalam General entertainment The audience share is 26.7%77 in Kerala.
Kiran TV Malayalam 24 hour movies and music
Audience share of 7.4%.
Gemini TV Telugu General entertainment
Teja TV Telugu General entertainment
Teja News Telugu News and current affairs channel.
Adithya TV Telugu 24 hour movie channel
Udaya TV Kannada General entertainment
Ushe TV Kannada Music and movie Pay TV channel
Udaya News Kannada News and current affairs channel.
Udaya 2 Kannada 24 hour movie channel
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Radio
Sun TV has 45 FM radio stations live or due to go live in 2007. The stations operate under three brands: Suryan FM (Tamil language), Visakha FM (Telugu language) and S FM (Tamil language) and are held through two subsidiary companies (outside shareholders own stakes of less than 10% in each of the subsidiary companies).
Figure 264) Sun TV, radio stations
State City Subsidiary
Andhra Pradesh Hyderabad Kal Radio Ltd
Rajamundri Kal Radio Ltd
Tirupati Kal Radio Ltd
Vijayawada Kal Radio Ltd
Warangal Kal Radio Ltd
Assam Guwahati South Asia FM Ltd
Gujarat Ahmedabad South Asia FM Ltd
Rajkot South Asia FM Ltd
Vadodara South Asia FM Ltd
Jharkhand Jamshedpur South Asia FM Ltd
Karnataka Bangalore Kal Radio Ltd
Gulbarga Kal Radio Ltd
Mangalore Kal Radio Ltd
Mysore Kal Radio Ltd
Kerala Cochin Kal Radio Ltd
Kannur Kal Radio Ltd
Kozhikod Kal Radio Ltd
Thiruvananthapuram Kal Radio Ltd
Trissur Kal Radio Ltd
Madhya Pradesh Bhopal South Asia FM Ltd
Indore South Asia FM Ltd
Jabalpur South Asia FM Ltd
Maharashtra Aurangabad South Asia FM Ltd
Nagpur South Asia FM Ltd
Pune South Asia FM Ltd
Meghalaya Shillong South Asia FM Ltd
Mizoram Aizawl South Asia FM Ltd
Orissa Bhubaneswar South Asia FM Ltd
Pondicherry Pondicherry Kal Radio Ltd
Rajasthan Jaipur South Asia FM Ltd
Sikkim Gangtok South Asia FM Ltd
Tamil Nadu Madurai Kal Radio Ltd
Tiruchy Kal Radio Ltd
Tuticorin Kal Radio Ltd
Uttar Pradesh Allahabad South Asia FM Ltd
Kanpur South Asia FM Ltd
Lucknow South Asia FM Ltd
Varanasi South Asia FM Ltd
West Bengal Asansol South Asia FM Ltd
Siliguri South Asia FM Ltd
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Film library
Sun TV has a movie library of over 1,000 hours. These films are largely in south Indian languages and are used as content for Sun TV’s movie channels.
Publishing
Sun TV has a small publishing business with publishes five magazines in Tamil and Malayalam languages. The largest publication is Dinakaran, a weekly Tamil language classifieds magazine for women. The other publications are Tamizh Murasu, Kungumum, Mutharam, Vannathirai and Kumguma Chimizh.
Financials
Figure 265) Sun TV, financials
y/e March
(Rs millions) 2005 2006 CAGR
Revenues TV Advertising 1,397 1,845 32.1% Broadcasting fees 495 570 15.2% Domestic Pay TV 398 440 10.6% Overseas 88 176 100.0% Cable 356 0 -100.0% Radio 144 171 18.8% Other 25 18 -28.0% Total Revenues 2,903 3,220 10.9% EBITDA 1,306 2,035 % Margin 45.0% 63.2%
Figure 266) Sun TV, segment analysis
Revenue (2006)
TV Advertising57%
Broadcasting fees18%
Domestic Pay TV14%
Radio5%
Cable0%
Overseas 5%
Other1%
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Management and ownership
Figure 267) Sun TV, key management and directors
Name Position
Kalanithi Maran Chairman and Managing Director
Kavery Kalanithi Joint Managing Director
S Sridharan Non Executive Independent Director
M K Harinarayanan Non Executive Independent Director
S Natarajan Vice President (Finance)
P Paul Vice President (Marketing)
K Shanmugam Vice President (Sales)
Hansraj Saxena Vice President (Programming)
S Kannan Vice President (Technical)
K Swaminathan General Manager (Administration)
R Ravi Company Secretary
Figure 268) Sun TV, key shareholdings
Shareholder % of capital
Kalanithi Maran and associates 90%
Foreign institutions 6.86%
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NN. Tata Sky
Activities: DTH operator
Ownership: Privately owned (Tata, Star TV and Temasek)
Recent strategic developments: Launched in 2006
Tata Sky is a new entrant in india’s emerging DTH television market. The company launched its offering at the August 2006, with 103 channels and a range of interactive services, including Pay Per View movies. The company has approximtaley 500,000 subscribers (company estimate, February 2007).
Tata Sky sold a 10% stake to the Singapore-based private equity firm, Temasek Holdings for Rs 2.5 billion in jaunary 2007; this valued the group at Rs 25 billion (US$550 million).
Management and ownership
Figure 269) Tata Sky, key management and directors
Name Position
Vikram Kaushik Managing Director & CEO
Ishaat Hussain Chairman
Figure 270) Tata Sky, Shareholders
Shareholder % of capital
Tata Group 70%
Star TV 20%
Temasek Holdings 10%
Indian media market
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OO. Tej Bandhu Group
Activities: Publishing (directories, newspapers), printing and marketing
services
Ownership: Privately owned
Recent strategic developments: New title launches
The Tej Bandhu group is a privately owned group which a range of businesses in publishing and printing. The groups key activities are in the classified directories sector, where it publishes a range of print and online Yellow Pages directories. The group is managed and owned by the Gupta family and was established in 1954.
Activities
Figure 271) Tej Bandhu Group, activities
Subsidiary Activities
GETIT Infomediary Ltd Publishing yellow pages directories (a top 3 player)
Established in 1986
Tej-Quebecor Printing Limited Printing company
60% shareholders alongside Quebecor
Bandhu Machinery Pvt. Ltd. Printing machinery
Bandhu Aerospace Limited Air-borne marketing materials (e.g. balloons)
Connect Market Data Private Limited Franchisee for ‘Free Ads’ classified newspapers
Neighbourhood Flash Ultra-local weekly newspaper delivered in Delhi
Getit Communications Pvt. Ltd. Direct marketing services
Sun Publications Publishes the weekly tabloid newspaper, Sun
Figure 272) Tej Bandhu Group, key management and di rectors
Name Position
Vishwa Bandhu Gupta Chairman,
Ramesh Gupta Vice - Chairman
Prem Bandhu Gupta Director
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PP. TV Today
Activities: TV broadcasting (news and business0
Ownership: Listed on the BSE and NSE (controlling stake with promoter)
Recent strategic developments: No major developments
Market data
Market codes: Reuters: TVTO.BO
Bloomberg: TVTN@IN
Current price: Rs 137.60
52 wk low: Rs 67.00
52 wk high: Rs 137.75
Share price performance (Last 12 mths)
The TV Today group is a leading news television broadcaster. The company’s flagship channel is Aaaj tak which has a regular audience of over 27 million (June 2006). The company has launched a number of other niche and local channels including Headlines Today and Tez.
TV Today was spun out of the India Today Group (it still has a 55% stake) and listed on the BSE and NSE.
Figure 273) TV Today, summary financials
RS in Millions 2003 2004 2005 2006 CAGR
Total Revenue 1,084.9 1,401.7 1,390.7 1,595.5 13.6%
% Change 110% 29.2% -0.8% 14.7% Net profit (Loss) 259.3 320.8 164.2 277.7 2.3% % Change 842.9% 23.7% -48.8% 69.1% % Margin 24% 23% 11.8% 17.4%
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Historical development
2006 � July- Memorandum of Understanding signed with Media Gateway for distribution of channels overseas via digital multimedia platforms.
� July- Looking to launch business news channel in collabration with Bloomberg. Investment marked of rs 350-400 million.
� June- Local city based Hindi news channel introduced in New Delhi (Dilli Aaj Tak).
� March- Minority stake purchased by Sonata Investment Limited
2005 � October- Broadcasting Aaj Tak in United States through licence agreement with Echostar .
� August- Tez Hindi news channel aired for Indian viewers.
2003 � Second news channel in English launched “Headlines Today”.
� Listed on Bombay Stock Exchange.
2000 � Flagship Hindi news channel “Aaj Tak” aired
1999 � Spun-off from Living Media India Limited’s news broadcasting arm “ TV Today Division”.
Activities Television channels
TV Today broadcasts three Hindi and one English news channel in India. The company offers three nation wide and one local city (New Delhi) based television channel. Plan to launch Mumbai city based and business news channel in coming years.
Figure 274) TV Today, channels
Channel Genre Language Market share78
Viewership79
Aaj Tak General news Hindi 26.89% 27.17 million
Headlines Today General news English 7.03% 6.72 million
Tez General news Hindi 2.85% n.a
Dilli Aaj Tak City news Hindi n.a n.a
TV Today offers online news through aajtak.com in Hindi and English.
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Financials
For the last full year (end March 2006), TV Today, had total revenues of Rs 1,595.7 million, and Net profit of Rs 277.7 million, year-on-year Net profit increase of 69%.
Figure 275) TV Today , financials
y/e March (RS million) 2003 2004 2005 2006 CAGR
Total Revenues 1084 1401.7 1390.7 1595.5 13.7% Net profit (Loss) 259.3 320.8 164.2 277.7 2.3% % Margin
Management and ownership Figure 276) TV Today, key management
Name Description
Aroon Purie Chairman and Managing Director
G. Krishnan Chief Executive Officer
Q.W. Naqvi News Director (Aaj Tak)
Rahul Kulshreshtha Director (Technical and Operation)
Amitabh Srivastava General Manager (Network Development)
Milind Khandekar Executive Producer
Ramkripal Singh Executive Producer Assignment
Rajnish Rikhy Vice President (Sales)
Figure 277) TV Today, key shareholdings
Shareholder % of capital (June 2006)
Living Media India Limited and Nominees 55.69% Sonata Investments Limited 9.31% GE Capital Mauritius Equity Investment 5.34%
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QQ. Television Eighteen
Activities: TV broadcasting (financial and news), online media
Ownership: Listed on the BSE and NSE (controlling stake with promoter)
Recent strategic developments: Expansion in online media
Market data
Market codes: Reuters: TVET.BO
Bloomberg: TLEI@IN
Current price: Rs 612.85
52 wk low: Rs 315.85
52 wk high: Rs 975.50
Share price performance (Last 12 mths)
Television Eighteen (Tv 18) is a leading television and business news broadcaster and online media company. The company broadcasts a range of channels covering news and business stories. Recently, it has significantly expanded its online media interests.
The company was established as a content provider in 1993, and is now listed on the BSE and NSE.
Figure 278) Television Eighteen, summary financials
y/e March Rs (Millions) 2003 2004 2005 2006 CAGR
Total Revenue 318.3 445.4 834.8 1,317.8 59.8% % Change 40% 87.4% 57.8% Net profit (Loss) (13.3) (39.3) 194.8 194.9 148% % Change -195% 595% 0.0% % Net Margin -4.2% -8.8% 23.3% 14.7%
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Historical development
2006 � February- Majority stake purchase in Jagran Prakashan’s Channel 7.
� January- Travel based online portal “YatraOnline.com” launched in collabration with Reliance Capital and North West Ventures Partners.
2005 � October- English news channel “CNN-IBN” launched in collabration with Turner International.
� August- Top Management Executives diluted 57,000 shares in open market.
2004 � October –CommoditiesControl.com purchase for Rs 12.5 million.
2003 � November- Reliance Capital Mutual Fund purchase 9.43% stake.
� September – Additional 49% stake acquired in CNBC-TV18 channel. Total stake is 90%.
2000 � March- Entered digital news media segment with inception of e-18.com.
� May- Expanded into digital business news segment with acquisition of MoneyControl.com
1999 � October- Listed on National and Bombay Stock Exchanges.
1993 � Incorporated as television content provider and broadcaster.
Activities
Television
TV18 broadcasts five general and business news based television channels in English and Hindi. Channel 7 is rebranded as IBN7 after TV18 purchased 50% equity from Jagran Prakashan. The segment has shown CAGR of 62% (2003-2006) and has long-term strategic international investors (Turner International and CNBC Asia Pacific).
Figure 279) Television Eighteen, channels
Channel Language Genre Notes
CNBC-TV18 English Business news 90% stake in venture with 0.8
million viewership80.
CNN-IBN English General News Joint venture with Time Warner
South Asia English General News News specific to South East Asia broadcasted across the globe.
CNBC-Awaaz Hindi Business news Viewership: 0.31 million81
IBN7 Hindi General News 50% stake in Jagran Prakashan launched channel.
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Digital Media
TV18 manages business and sector specific digital media via online and mobile formats. These websites are offered in commodities, travel, jobs, stock trading and business news genres. Business and sector updates are also offered via mobile.
Figure 280) Television Eighteen, digital media
Digital content Genre/Sector Notes
MoneyControl.com Business news Free investor based portal
Cricketnext.com Sports
Commodities.com Commodities information
Commodities trading in India, Burma, Nepal, Pakistan and Singapore.
PowerYourTrade.com Trading B2B and B2C stock trading portal also offering business updates for investors.
Paid investor based portal with 75,000 subscribers.
Yatra.com Travel B2C travel based e-commerce portal launched in collabration with private equity players.
Jobstreet (India) Dot Com Jobs Holdings-50% in Indian subsidiary of Malaysian based corporation.
IBNlive.com News Digital version offering videos and breaking news.
2622 Mobile Service Business and financial information
Service generate 50,000 SMS per day from investors looking for market updates
Financials
For the last full year (end March 2006), TV18, had total revenues of Rs 1,317 million, and Net profit of Rs 195 million, year-on-year revenue increase of 52%.
Figure 281) Television Eighteen, financials
y/e March (RS million) 2003 2004 2005 2006 CAGR
Television 296.4 429.5 813.3 1,267.8 62.2% Other 21.9 15.8 21.4 49.9 32% Total Revenues 318.3 445.4 834.8 1,317.8 59.8% Net profit (Loss) -13.3 -39.3 194.8 194.9 148% % Margin 23.3% 14.7%
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Figure 282) Television Eighteen, key transactions
Date Type Company Notes
August 2006
Acquisition (100%)
Cricketnext.com, Compareindia.com and Urban Eye
Urban Eye is Mumbai based interactive agency.
Cricketnext.com is cricket news based digital portal
April 2006
Acquisition (50%)
JobStreet.com India Private Limited
Purchase price: US$2 million.
JobStreet India is subsidiary of Malaysian based recruitment firm.
February 2006
Acquisition (50%)
Channel 7 Purchase price: Rs 600 million.
Channel 7 is Hindi news channel of Jagran Prakashan.
October 2005
Acquisition (51.01%)
Global Broadcast News Limited
Subsidiary of SRH Broadcast News Holding Private Limited
October 2004
Acquisition (100%)
CommoditiesControl.com Purchase price: Rs 12.5 million
M/S Agri Informatics India Private Limited subsidiary was acquired.
Management and ownership Figure 283) Television Eighteen, key management
Name Position
Raghav Bahl Managing Director and Chief Executive Officer
R D S Bawa Chief Financial Officer
Anil Srivastava Vice President and Company Secretary
G K Arora Chairman
Vandana Malik Director
R N Bahl Director
Sanjay Chaudhuri Director
Manoj Mohanka Director
Hari Bhartia Director
The founding directors have a 27.12% stake (December 2006).
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RR. UTV Software Communications
Activities: TV and Film production and distribution, gaming
Ownership: Listed on the BSE and NSE (Walt Disney group is a minority shareholder)
Recent strategic developments: Plans to raise US$100 million via Nasdaq listing
Market data
Market codes: Reuters: UTVS.BO
Bloomberg: N.A.
Current price: Rs 280.85
52 wk low: Rs 130.00
52 wk high: Rs 335.90
Share price performance (Last 12 mths)
UTV is a leading television and film producer and distributor. In 2006, the company sold its childrens television channel and acquired a number of gaming companies in the UK and India.
UTV was established by Ronnie Screwvala in 1990 as television content provider on Zee TV and public broadcaster “Doordarshan”. It is now listed on the BSE and NSE; the Walt Disney group is a minority shareholder.
Figure 284) UTV, summary financials
y/e March (Rs millions) 2003 2004 2005 2006 CAGR
Total Revenue 948.8 1,124.6 1,767.9 2,084.1 29.9%
% Change 18.5% 57.2% 17.9% Net profit (Loss) 91.8 46.5 162.4 142.2 15.5% % Change -49.3% 249% -12.4% % Net Margin 9.7% 4.1% 9.2% 6.8%
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Historical development
2007 � February – Announcement of plans to raise US$100 million via Nasdaq listing
2006 � December – sale of Hungama TV to Walt Disney for US$31 million
� September- Walt Disney purchase minority stake for US$ 14 million.
� August- UTV, FOX, Sony Pictures and Will Smith’s Overbrook sign film production agreement worth US$37 million.
2005 � September- Animation programming, production and merchandising agreement with BKN New Media, Inc worth US$10 million.
� September- Joint venture agreement with Astro (Malaysia) for launching two new kids based television channels in South East Asia.
� March- Listed on Mumbai and National Stock Exchanges. Stocks oversubscribed 26.46 times.
� March- Astro acquire 25% stake in Hungama TV.
� February- Ten year distribution contract for 130 film titles with Miramax International Film Corporation.
� Divested wholly owned subsidiary “ UTV International (Holdings) Limited, BVI.
2004 � December- Aditya Shastri appointed as Chief Operating Officer of UTV Motion Pictures Production.
� August- Diluted 44% stake in Vijay Television Limited for Rs 310 million to Star India.
� July- Founder and Chief Executive Officer purchase 12% equity from Star India for Rs 117 million.
� July- Ronnie Screwvala acquire 12% in Capital Communication CDPO Inc subsidiary.
2000 � Ventured into Internet content production through wholly owned subsidiary “The United Entertainment Solutions Private Limited”.
1998 � March- Rebranded as UTV Software Communications Limited
� Acquisition of Ram Mohan Biographies (animation segment).
� Entered broadcasting arena through purchase of Vijay Television Limited.
1995 � May 1995- Ventured into post television content production segment through majority stake (54.6%) acquisition in Laezer Production Private Limited
1990 � June- Incorporated as private limited with television content provider to Doordarshan and Zee Telefilms
Activities
Television production
UTV is a well established producr of television programming across a wide range of genres (including animation). Most of the content is Hindi language content and key customers include Star TV, Sony, Zee TV, Surya TV, Udaya TV and the BBC.
The company is also active in a range of media facilities activities such as dubbing.
In November 2006, UTV formed a joint venture with the Malaysian broadcaster, Astro to develop broadcast and online media offerings for young people
Film production and distribution
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UTV produces and distributes both small and big budget Hindi films. It has formed a number of alliances with other producers and distributors in both India and overseas.
Gaming
UTV has recently expanded into the gaming market through the acquisition of majority stakes in two gaming companies (Ignition Entertainment and Indiagames).
Financials
For the last full year (end March 2006), UTV, had total revenues of Rs 2,084 million, and Net profit of Rs 142 million, year-on-year Net profit decline of 12%.
Figure 285) UTV, financials
y/e; March (RS million) 2003 2004 2005 2006 CAGR
Revenues by type Television 703.3 774.9 909.4 711.3 0.4% Film 20.0 269.2 773.9 1,309.9 297.5% Other content services 54.8 101.2 98.4 78.3 12.5% Other revenues 200.3 15.2 36.3 47.8 -37.6% Intra company -29.7 -20.7 -13.8 -15.5 -19% Revenues by region India n.a 977.0 1,518.3 1,598.9 28% Overseas n.a 147.6 249.6 485.2 81.3%82 Total Revenues 948.8 1,124.6 1,767.9 2,084.1 29.9% Net profit 91.8 46.5 162.4 142.2 15.5% % Margin 9.7% 4.1% 9.2% 6.8%
Figure 286) UTV, segment analysis
Revenue (2006)
Overseas23%
India77%
Revenue (2006)
Other content services
3.6%
Television 33.1%
Other revenues2.2%
Film61.0%
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Figure 287) UTV , key transactions
Date Type Company Buyer Notes
December 2006
Acquisition (70%)
Ignition Entertainment
UTV UK based gaming company
Purchase Price: Rs 600 million
December 2006
Acquisition (51%)
Indiagames UTV Mumbai-based gaming company
Purchase Price: Rs 680 million
November 2006
Joint venture (50%)
Astro n.a. Joint venture to develop media for young people across South East Asia
September 2006
Acquisition (100%)
Hungama TV Walt Disney Purchase Price: US$30.5 million.
September 2006
Minority stake (14.9%)
UTV Walt Disney Purchase Price: US$14 million.
March 2006 Acquisition (26%)
Hungama TV Astro UTV divested minority stake in Kids based television channel.
August 2004 Divestment (44%)
Vijay Television Private Limited
Star India UTV diluted its majority stake for Rs 310 million.
July 2004 Minority stake (12%)
UTV Ronnie Screwvala
Star India divested 12% stake for Rs 117 million
June 2004 Acquisition (12%)
Capital Communication CDPQ Inc
Ronnie Screwvala
Purchase price: Rs 216 million.
June 2004 Minority stake (3%)
UTV Ronnie Screwvala
Star India divested stake for Rs 29 million.
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Management and ownership
Figure 288) UTV, key management
Name Position
Ronnie Screwvala Chief Executive Officer
Ronald D'mello Chief Operating Officer
Zarina Mehta COO Broadcasting, UTV
Deven Khote Director - Post Production and VFX, USL
Ronnie Screwvala and close associates control 33.1% of the equity (June 2006). Walt Disney acquired a 14.99% stake in September 2006 and Macquarie Bank acquired a 6.6% stake in November 2006.
Figure 289) UTV, largest shareholders
Shareholder % of capital
Promoter and associated companies 33.07% Walt Disney 14.99% Macquarie bank 6.6%
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SS. Wire and Wireless India
Activities: Cable TV operator
Ownership: Listed on BSE and NSE (controlling stake with promoter)
Recent strategic developments: Roll-out of CAS technology
Market data
Market codes: Reuters: WIWI.BO
Bloomberg: WNW@IN
Current price: Rs 107.10
52 wk low: Rs 80.00
52 wk high: Rs 139.00
Share price performance (since 10 th Jan 2007)
Wire and Wireless India (WWI) is the cable TV operation of the Zee Telefilms group. In January 2007, WWI was spun out as a separate subsidiary with its own listing on the BSE and NSE. WWI is India’s largest cable TV operator with a reach of 6.7 million subscribers in 36 cities. The company’s network consists of over 4000 Local Cable Operators (LCOs).
WWI current focus is on growing its analogue and digital subscriber base and on rolling out conditional access technology to its existing subscribers.
Figure 290) Wire and Wireless India, summary financ ials
y/e March (Rs millions) 2006
Net sales 407.6
Other Income 19.2
Total Income 426.8
Net Loss -171.4
Indian media market
TT.Zee Entertainment
Activities:
Ownership:
Recent strategic developments:
Market data
Market codes:
Current price:
52 wk low:
52 wk high:
Zee Entertainment is the entertainment broadcasting arm of the Zee telefilms media group (controlled by Subash Chandra). The company was restructured in late 2006/2007 into four separate companies.
Figure 291)
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Zee Entertainment
TV broadcasting, with a focus on national entertainment channels
Listed on BSE and NSE (controlling stake with promoter)
Recent strategic developments: Acquisition of 50% stake in ten Sports
Market data
Market codes: Reuters: ZEE.BO
Bloomberg: Z@IN
Current price: Rs 254.50
Rs 96.66
Rs 311.55
Share price performance (last 12 months)
Zee Entertainment is the entertainment broadcasting arm of the Zee telefilms media group (controlled by Subash Chandra). The company was restructured in late 2006/2007 into four separate companies.
Zee Telefilms Group, structure
, with a focus on national entertainment
Listed on BSE and NSE (controlling stake with promoter)
Share price performance (last 12 months)
Zee Entertainment is the entertainment broadcasting arm of the Zee telefilms media group (controlled by Subash Chandra). The company was restructured in
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Zee Entertainment now operates Zee’s major channels in India and their overseas distribution. The company launched its first channel in 1992 and this channel is now one of India’s leading entertainment channels.
Figure 292) Zee Entertainment, channels
Channel Language Notes
Zee TV Hindi General Entertainment
Flagship channel launched in 1992.
Zee Cinema Hindi Film
Zee Studio Hindi Films
Zee Music Hindi / English Music
Zee Sports Hindi Sports
Zee Trendz English Fashion channel
Zee Cafe English Overseas programmes
In December 2006, Zee acquired a 50 % stake in the leading sports channel, Ten Sports. The channel owns the rights to many leading sports events, including all test matches played in Pakistan and a number of West Indies matches.
Historical development
2006 � December – Restructuring of Zee Telefilms into four separate groups
� December – Acquisition of 50% stake in ten Sports
2005 � October- Zee News Limited incorporated for managing current news and affairs.
� April- Sued Board of Control of Cricket for Rs 16.3 billion on manipulating of broadcasting rights tender in favour of Nimbus Communications.
2004 � Divested stake in Padmalaya Films
� November- Launched Hindi sports based channel “Zee Sports”.
� Expansion into Hong Kong, Philippines, Indonesia, Japan and Thailand.
� April- Foreign currency convertible bonds worth US$ 100 million listed on Singapore Stock Exchange
2003 � December- Partnership with Rajshri Productions for Hindi and regional films distribution.
� May- Bilingual (Hindi-French) film production in alliance with France TV and Silhouette Films.
2002 � April- Majority stake of 48.4% in ETC Networks Limited for Rs 250 million.
� March- Acquisition of 64.3% stake in Padmalaya Enterprises Private Limited for Rs 590 million. Direct stake of 32.8% in Padmalaya Telefilms.
2000 � Stock split 1:10 with face value reduced at Rs 1 per equity.
1997 � Joint venture agreement with Buena Vista Television (India).
1995 � Launched Zee News and Zee Cinema channels.
1993 � September- Listed on Bombay. National and Calcutta Stock Exchanges
1992 � Launch of free-to-air Hindi general entertainment channel “Zee TV”.
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International reach
Zee has built up a substantial audience in overseas markets where there are large Indian communities.
Figure 293) Zee Entertainment, overseas reach
Region Total subscribers (March 2006)
Americas 466,000
Europe 168,000
Africa 61,000
Asia Pacific 480,000
The restructured Zee Entertainment generated revenues of Rs 10,551 million in 2006.
Figure 294) Zee Entertainment, summary financials
(Rs millions) 2006
Net Revenue 10,551
Net profit 1,996 Net Margin 18.9%
Management and ownership
Figure 295) Zee Entertainment, key management and d irectors
Name Position
Subhash Chandra Chairman
Pradeep Guha Chief Executive Officer
Siddharth Jain Senior Executive- Distribution
Indranil Chakravarthi Senior Executive- Zee Studio
Bharat Ranga Senior Executive- Zee Cinema
Irswin Balvani Senior Executive- Zee Music
Himanshu Mody Senior Executive-Zee Sports
The promoter, Subash Chandra controls 44% of the equity.
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UU. Zee News
Activities: News broadcasting
Ownership: Listed on BSE and NSE (controlling stake with promoter)
Recent strategic developments: IPO in 2007
Market data
Market codes: Reuters: ZEEN.BO
Bloomberg: ZEEN@IN
Current price: Rs 43.90
52 wk low: Rs 31.00
52 wk high: Rs 43.40
Share price performance (last 12 months)
Zee News is the news and regional channels company of the Zee Telefilms group. The company operates a news channel, business news channel and six regional language channels. In the new and business markets, Zee has an audience share of approximately 12%-15% (the market leaders typically have a third of the audience).
Figure 296) Zee News, channels
Channel Language Audience share (Q2 2006)
Notes
Zee News Hindi 15% National news channel
Zee Business Hindi 12% Business and financial news
Zee Telugu Telugu 4% Launched in 2005
Zee Marathi Marathi 43% Second largest in Marathi language
Zee Bangla Bengali 18% Bengali regional channel
Zee Kannada Kannada 4% Sicth largest in Kannada regional channels
Zee Punjabi Punjabi 13% Total market share of 64% ( combined with Zee controlled ETC Punjabi).
Zee Gujarati Gujarati 21% Second largest in Gujarati channels
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The regional language markets present strong growth opportunities (compared to English and hindi language channels) as television reach and penetration grows in rural areas.
Zee News’s proforma financials for year end 2006 are revenues of Rs 2 billion.
Figure 297) Zee News, summary financials
y/e March, (Rs millions) 2006 9M 2007
Net Revenue 2,012 1,665
Net profit 162 93 Net Margin 8% 7%
Figure 298) Zee News, key management
Name Position
Subhash Chandra Chairman Kancharana Upendra Rao Director Laxmi Narain Goel Director Naresh Kumar Bajaj Director Vinod Bakshi Director
As part of the restructuring of the Zee Telefilms group, existing shareholders in Zee Telefilms were given shares in Zee News (in the ratio of 137 Zee News shares for every 100 Zee Telefilms’ shares).
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1 World Bank 2004 2 ZenithOptimedia data 3 Heernet estimate 4 Heernet estimate 5 NRS 2006 6 Adex, ZenithOptimedia 7 Adex, 2005 8 ZenithOptimedia 9 Adex 10 WARC data 11 WARC data 12 Heernet estimates 13 IAMAI data 14 TRAI data 1515 TRAI Data 16 TRAI Data 17 TRAI Data 18 TRAI Data 19 TRAI Data 20 Economist Intelligence Unit 21 Mapsofindia.com 22 EIU, February 2007 23 Opportunities and challenges for investment in India, OECD 24 India census 2001 25 World Bank 26 World Bank 27 Zenith media, IRS 28 Census of India 29 Manorama Year book 2003 30Population Census 2001 31 Census of India 2001 32 Opportunities and challenges for investment in India, OECD 33 Audience data (mid 2005) TAM Research 34 WARC 2002 35 Heernet estimate 36 TRAI data, March 2005 37 Foreign Currency Convertible Bonds. 38 (CAGR, 2003-2006) 39 www.cybermedia.co.in 40 IRS Company Source 41 IRS Company Source 42 Investment Report- CyberMedia (India) Limited. www.four-s.com 43 Three months audited (Red Herring Prospectus-Deccan Chronicle Holdings) 44 Foreign Institutional Investor 45 ABC (July-December 2003). 46 Corporate website. 47 IRS, 2006 Round 1 48 (NRS, 2003) 49 (NRS, 2003) 50 Figures from corporate website for Indian edition only. 51 Company data 52 Company data 53 (ABC, July-December 2003). 54 Company data 55 Company data 56 Population (2-10 million) 57 (NRS, 2003) 58 As reported in Mukta Arts Annual Reports 2005,2004 and 2003. 59 Fifteen months ending 31st March 2003.
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60 TAM Media Services, TG: 4+ Years, CS Market: All India (26th December 2004- 25th March 2005)-All English news channels 61 TAM Media Services, TG: 4+ Years, CS Market: All India (26th December 2004- 25th March 2005 62 TAM Media Services, TG: 4+ Years, CS Market: All India (26th December 2004- 25th March 2005)-All Hindi news channels 63 TAM Media Services, TG: 4+ Years, CS Market: All India (2004-2005) 64 (CAGR, 2004-2006) 65 Includes Sales of Television Software, Other News Delivery Avenues and subscription Revenue 66 Figures from Doordarshan Corporate Website. 67 Figures from Doordarshan Corporate Website. 68 Cricket and Hockey are favourite games which are usually broadcasted. 69 TAM, Q1 FY 2006-2007, All India, C&S 4+. 70 Hindi, Urdu and English. 71 (Allindiaradio.org, 2004) 72 Excluding Health care business segment. 73 Includes content, events and digital media PBT figures for four consecutive years. 74 Includes figure for media related business segments. 75 15 month ending June 2003. 76 9 month ending March 2004 77 (TAM Media Research, September 2005) 78 TAM Media Services CS 15+ Years (May 2006) 79 TAM TG: 4+ years, All India (April 2004-March 2005) 80 TAM Research - Absolute Channel Shares all india (April 2004-April 2005). 81 TAM Research 82 (CAGR, 2004-2006).