India to Get Six New TV Channels From News Corp.

News Corp., the world’s third-largest media group – and the first overseas broadcaster to operate in India – plans to spend approximately $100 million to create six new television channels there.

The investment, which company chairman and chief executive officer Rupert Murdoch announced in early August, follows the recent launch of a new stock index specifically for India by Dow Jones Indexes, a News Corp. business unit, underscoring Murdoch's commitment to the South Asian nation.

“I’m guessing the investments will be in the region of $100 million, and we will launch the channels within 12 months,” Murdoch told reporters who had gathered Aug. 4 in Mumbai to hear him discuss the launch of the Dow Jones India Titans 30 Index, which will gauge the performance of Indian stocks. "All these channels will be under the STAR brand."

STAR India Pvt. Ltd. broadcasts news, entertainment and music on a number of channels, including STAR Ananda, STAR One and STAR Plus.

The Mumbai-based company owns a 26 percent stake in Media Content & Communications Services India Pvt. Ltd. – a joint venture formed in 2003 by STAR India and ABP Pvt. Ltd., a Kolkata-based media conglomerate – which operates three Indian news channels.

With the investment, New York City-based News Corp. joins other foreign media companies that have recently expanded their operations in India, including Japan's Sony Corp. and Burbank, Calif.-based Walt Disney Co., in an effort to capture a slice of the country's booming economy.

In 2007, Indian economic output surged 9.2 percent after posting a gain of 9.6 percent the year before – second only to China's economy, which grew 11.4 percent last year.

The Indian film industry, which is popularly known as Bollywood, is the most prolific in the world, producing more than 1,000 movies annually.

In February, Disney's Indian subsidiary, Walt Disney Co. Southeast Asia Pvt. Ltd., boosted its stake in Mumbai-based UTV Software Communications Ltd. from 14 percent to 32 percent, an investment worth approximately $200 million; six months later, the company completed a $28.1 million investment in UTV Global Broadcasting, a business unit of UTV Software Communications that establishes television networks in India.

News Corp., which Murdoch founded nearly three decades ago as a holding company for News Ltd., an Australian newspaper publisher, has no plans to invest in the Indian print media.; Murdoch said the company "will only be doing regional television" in India.

Murdoch, who has developed a reputation as an aggressive buyer of media companies – including last year's acquisition of Dow Jones & Co. for about $5.6 billion – said he would only invest in Indian newspapers if the country's government relaxed its strict rules on foreign investment in domestic media.

"We don't see ourselves taking a stake in print – because it is not available and because we won't want to take just a 26 percent stake," he said, referring to the cap on foreign investment in news media in India.

In March 2003, the Indian government established the 26 percent investment ceiling for foreign ownership of domestic television news channels.

Despite this, News Corp. plans to increase the number of editorial workers at its Dow Jones unit in India from 25 to 70.

The New York-based company, which publishes such highly-regarded newspapers as The Wall Street Journal and Barron's, will maintain the editorial alliance that it formed in February 2007 with "Mint," a then-new business newspaper published by New Delhi-based media conglomerate HT Media Ltd.

"Dow Jones has lots of investment plans in India. It is looking at growing digitally, such as in the mobile space," Murdoch said. "To grow in the digital space, the company is looking for a partnership. It also plans to increase the number of journalists from the present 25 to 70 in India."

News Corp.'s decision to create new Indian television channels comes at a time when the company's stock has been battered because of shareholder concerns that the American media sector will be hurt by the slumping U.S. economy.

Murdoch has repeatedly warned that a decline in advertising at local newspapers and television stations in the United States would deal a major blow to the American media industry.

In Mumbai, he told reporters that advertising for News Corp.'s television properties in the United States remains very good.

"Our advertisement on television and the Internet is very, very good, except for local television," he said. "Cable networks are all sold out for 12 months."

Still, Murdoch, remains convinced that long-term investment opportunities are to be found in Asia – particularly India, which is poised to emerge as the continent's top pay-television market by 2012.

"In the long term, the media and advertising outlook for Asia is tremendous as wealth is created and people get educated and you see the emergence of a wealthy middle class," he said.

source:  IndUSBusinessJournal.com

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