Viacom-TV18 announce joint venture

BY A CORRESPONDENT

5 June, 2007:

The joint venture between global media conglomerate Viacom and India’s media TV-18 group, announced in the last week of May 2007, may not find the going easy in the face of stiff competition and the large number of cable television channels present in India.

The 50-50 joint venture, to be known as Viacom-18, plans to set up an entertainment company that will be involved in television, films, and digital media. It comes amidst a boom in India’s television entertainment sector with dozens of new channels expected to be launched by the end of 2007.

Viacom, based in the United States, owns Hollywood studios Paramount and DreamWorks as well as television channels MTV and Nickleodeon. TV-18 runs Indian business channels such as CNBC-TV18 and has a stake in Global Broadcast News, which operates English news channel CNN-IBN.

The joint venture will start a Hindi entertainment channel in India by 2008.

According to Philippe Dauman, chief executive of Viacom, the film operation for Viacom-18 will provide strong synergies with television and the digital media business. It will also complement the Paramount and DreamWorks studios.

Dauman had said at the time of announcing the joint venture in May that he considers India as one of Viacom’s priority markets for expansion.

Viacom-18 will also hold a stake in TV-18’s Indian Film Company, which is set to be listed soon on the London Stock Exchange’s Alternative Investment Market.

The new partners are embarking on the joint venture at a time when India’s cable television broadcasting industry is preparing for unprecedented competition that many believe will lead to a period of fierce competition and consolidation in the months to come.

Neither partner has in experience operating a Hindi-language entertainment channel.

The push by Viacom comes at a time when there is increasing excitement over India’s $1.7-billion broadcasting industry, which is estimated by Media Partners Asia, a research firm, to be growing by 21% a year.

There are already over 200 television channels in India, and more are being started almost every day.

India’s cable television market is at present dominated by foreign-owned operators, including Rupert Murdoch’s Star TV and Japan’s Sony, and several large domestic broadcasters, such as Zee, Sun TV, and Sahara.

A new breed of domestic broadcasters, however, has begun to challenge the hierarchy, among them the TV 18 Group, run by Indian entrepreneur Raghav Bahl.