Star to twinkle in South but from behind
By Venkatachari Jagannathan | 07 Aug 2001
It is time for rumour mills to still. It has finally been confirmed that Star TV has taken majority stake in Vijay Televisions Ltd, the company that owns the Tamil satellite channel, Vijay TV. In a recent move Star has acquired a 51 per cent holding in the company, with the balance remaining with other shareholders, primarily UTV.
According to sources in Vijay TV, there would be an additional company called Vijay Broadcasting, which would be totally controlled by Mr. Ronnie Screwalla, the main promoter behind UTV.
This would primarily be the broadcaster. Vijay Televisions will be a content provider with Star having majority stake. The new company has been floated to circumvent the statute that foreign
companies cannot hold more than 20 per cent in a satellite channel while uplinking from India.
To its credit, the channel had improved its image in the recent past. It came into being as GEC TV, promoted by the Tamil Nadu-based Udayars (liquor group) in 1995. It was then taken over by Vijay Mallya of the UB group at the end of the same year. But with returns proving inadequate, UB sold out most of its stake to the Unilazer group in November 1998 and the new management under Mr. Screwalla again brought in fresh investments.
Despite these attempts, the cash crunch continued. Vijay hoped to double its revenues to Rs36 crore for fiscal 2000-2001, but is instead averaging at Rs1.5 crore a month. For the last eight months, the channel has been in the market prospecting for buyers, with Sun TV expected to bite the bullet. But this did not happen and Star was roped in. The earlier announced plans of Vijay TV being merged with UTV have now been cancelled.
Vijay TV had seen a number of innovations under its new chief executive, Rohit Adya, (little more than a year old with the channel and who had come in from Times of India.) Mr. Adya signed deals with NDTV for news, with Discovery channel and a few others for content. While the channel certainly looked better in terms of programming, revenues did not go up in significant proportions.
The news programme also did not take off in the expected manner despite the timings being changed to get a more favourable review from the audience. Vijay TV was also not buying new movies due to financial crunch. Its movie repertoire consists of 900 films of the 60s and 70s vintage. Incidentally despite several attempts to get his views on the latest developments Mr.Adya refused to come on line.
The money brought in by Star to the tune of Rs20 crore is expected to be ploughed back into programming, as also ramping up the movie library.
Star's investment is expected to bring in profits faster for the channel which is currently loss making -though it does make cash profits.
Mr.Ajay Vidyasagar of Star group is expected to takeover as chief operating officer. Currently there is speculation as to whether Mr.Adya will be retained in his current position or be transferred to head other UTV operations.
Earlier his predecessor Mr.Guru Dutt who came in along with Vijay TV stayed on with the channel for some months before handing over charge, in accordance with the wishes of the UTV management.
Meanwhile in a larger context, the Tamil channel market is hotting up.
Zee-Asianet's `Bharathi' channel commenced operations recently, Raj TV another satellite channel is looking at additional channels, Jaya continues to relay its own brand of programmes and the fight is on for the second spot. (Sun reigns supreme and commands 80 per cent of advertisement revenues of Rs 170 crore).
It is reported Bharathi channel is being renamed as Alpha Tamil and the management control is being passed on to Zee. (See Sawal sou crore ka). Despite the presence of so many channels in the Tamil scene, the only casualty in the past was Nila TV.
Even Sumangali Cable Vision (the cable arm of Sun TV having its own local content ) is said to be ahead of some main channels in some programmes with improved transmission.
Whether Vijay TV has been given a new lease of life (probably a new name also later) and is on to better days remains to be seen.
