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12-13-2001, 07:17 PM
India's Zee Telefilms Ltd said on Thursday it had formed a channel distribution joint venture with AOL Time Warner's Indian unit and added it would explore more investments with the U.S. media giant.
Zee, India's largest private broadcaster with 14 television channels, will hold 74 percent and Turner 26 percent in the new company that will distribute and market each others channels, and those of third parties, in India and South Asia.
The partnership will examine ways of cross-promotion, programming and distribution, the two companies said in a joint statement. It did not give financial details.
"Zee will continue to explore other co-operation and investment opportunities with AOL Time Warner,'' Subhash Chandra, Zee's chairman, said in the statement.
D.P. Naganand, Zee's head of access business, told a news conference the new distribution arrangement with the U.S. company would not restrict Zee's discussions with other media companies for a strategic stake sale.
Zee's shares had gained nearly 40 percent over the past month on speculation it was close to finalising a strategic stake sale deal with U.S. media giant AOL Time Warner.
Zee's distribution joint venture plans with Turner International India, first indicated earlier this week, had sparked hopes that it could lead to a stake sale.
Other potential investors that have been mentioned in the Indian media include France's Vivendi Universal and Vicacom (NYSE:VIA - news) of the United States.
"This alliance, the first of its kind for Turner in Asia, is a ground-breaking step for us in India,'' Steve Marcopolo, managing director of Turner Broadcasting System Asia Pacific, said in the statement.
"This new venture also underscores our commitment to investing and participating in the growth and future development of the country's cable and satellite industry,'' he said.
COMPLEMENTARY OFFERINGS
Zee's 14 channels are a mix of general entertainment, movies, news, music and regional language offerings. Turner International operates three channels -- news network CNN, English movie channel HBO and Cartoon Network.
Naganand said pricing for the new bouquet of 17 channels had not been decided yet but the cost per channel to the distributor was likely to decline. He said the company would experiment with different bundling options to suit regional preferences.
Naganand said there would be revenue gains for both companies and added that ``there were some areas where Zee's penetration was stronger while in others AOL had penetrated very rapidly''.
Analysts have said combining distribution would be of greater advantage to AOL than to Zee, though it could improve Zee's content offering on the margin.
The proposed new company, Zee Turner Private Ltd, is not expected to have a large capitalisation, and will take over the functions now carried out by El Zee Televsion Ltd and Turner International (India) Pvt Ltd.
Zee, India's largest private broadcaster with 14 television channels, will hold 74 percent and Turner 26 percent in the new company that will distribute and market each others channels, and those of third parties, in India and South Asia.
The partnership will examine ways of cross-promotion, programming and distribution, the two companies said in a joint statement. It did not give financial details.
"Zee will continue to explore other co-operation and investment opportunities with AOL Time Warner,'' Subhash Chandra, Zee's chairman, said in the statement.
D.P. Naganand, Zee's head of access business, told a news conference the new distribution arrangement with the U.S. company would not restrict Zee's discussions with other media companies for a strategic stake sale.
Zee's shares had gained nearly 40 percent over the past month on speculation it was close to finalising a strategic stake sale deal with U.S. media giant AOL Time Warner.
Zee's distribution joint venture plans with Turner International India, first indicated earlier this week, had sparked hopes that it could lead to a stake sale.
Other potential investors that have been mentioned in the Indian media include France's Vivendi Universal and Vicacom (NYSE:VIA - news) of the United States.
"This alliance, the first of its kind for Turner in Asia, is a ground-breaking step for us in India,'' Steve Marcopolo, managing director of Turner Broadcasting System Asia Pacific, said in the statement.
"This new venture also underscores our commitment to investing and participating in the growth and future development of the country's cable and satellite industry,'' he said.
COMPLEMENTARY OFFERINGS
Zee's 14 channels are a mix of general entertainment, movies, news, music and regional language offerings. Turner International operates three channels -- news network CNN, English movie channel HBO and Cartoon Network.
Naganand said pricing for the new bouquet of 17 channels had not been decided yet but the cost per channel to the distributor was likely to decline. He said the company would experiment with different bundling options to suit regional preferences.
Naganand said there would be revenue gains for both companies and added that ``there were some areas where Zee's penetration was stronger while in others AOL had penetrated very rapidly''.
Analysts have said combining distribution would be of greater advantage to AOL than to Zee, though it could improve Zee's content offering on the margin.
The proposed new company, Zee Turner Private Ltd, is not expected to have a large capitalisation, and will take over the functions now carried out by El Zee Televsion Ltd and Turner International (India) Pvt Ltd.