Amit Khanna: The TV content kings

FREEZE FRAME/ Many have flourished but they may be in for better times.

The recent acquisition of a 25 per cent stake by Star in Balaji Telefilms for a whopping Rs 150 crore may be an indication that the content creation industry is about to embark upon its second growth cycle.

Any substantial growth also marks a shake out. There is some consolidation and some new entrants and there have been some rather painful shutdowns.

In fact, the TV content business has done fairly well in the past decade, which incidentally is just about its entire life if one excludes the longish infancy from the mid-1980s to the early 1990s. This industry's annual turnover would be roughly Rs 1,500 crore, growing at a compound annual growth rate of about 15 per cent. This excludes sports and movie rights and in-house news production.

In time, the TV content industry will probably rival the movie business in revenues and perhaps grow exponentially as the need to deliver customised content rises.

Against this backdrop, perhaps it's time to take a look at where some of the early players in this arena stand today. Ardent telly watchers will recall Hum Log, Buniyad, Ramayan and Mahabharat, the harbingers of independent TV production.

The Hum Log team was just a one-time wonder and disappeared as soon as the programme was over. B R Chopra and Ramanand Sagar and their sons continue to be active. Unfortunately, both these production houses have not realised their early potential and continue to be middling players. Ramesh Sippy has always been a marginal player in TV.

A few other players have moved to feature films "� Kundan Shah, Aziz Mirza (Jaane Bhi Do Yaaron) "� but a whole bunch has passed into oblivion.

Let's look at some of the success stories. NDTV began with a weekly half hour on Doordarshan but today runs two successful TV channels. Always a thorough professional, Prannoy Roy along with his talented wife Radhika have in the last 15 years built up a news organisation that is truly global in its approach and have managed to retain a certain credibility.

No wonder NDTV is worth about $ 150 million. Another contemporary of NDTV has been TV Today, an offshoot of the India Today group. Unlike NDTV, it began with a monthly video magazine and was the first content company to launch a TV channel of its own.

Aaj Tak with its hard-hitting Hindi news has remained not only the market leader but also hugely profitable. Its English language sibling 'Headlines Today" is still struggling, though. TV Today's valuation is slightly more than that of NDTV. One can see more TV channels coming from both these listed companies but I feel they will stick to the infotainment segment.

UTV and TV 18 were among the early production houses that had a fairly diversified programming portfolio when they began in the early 1990s. Both were among the first to get major foreign investment (News Corp in UTV and Dow Jones (CNBC later) in TV 18.

TV18 went on to launch CNBC India, a 24-hour business news channel with CNBC and UTV bought the Tamil channel Vijay TV (which it recently sold to Star).

They went on slightly divergent paths subsequently. UTV expanded into feature film production and distribution, post-production facilities and animation and only now is about to become a broadcaster with the impending launch of a children's channel "Hungama TV," even as it is consolidating its TV and film businesses.

UTV is to launch its IPO in November this year. I believe it should have a valuation of $ 100 million.

TV 18, which is already listed on the bourses, has, meanwhile, restructured itself and acquired a majority stake in CNBC India (now CNBC 18). It is about to move into swanky new studios in Mumbai and launch its Hindi channel.

Yet it has neglected its entertainment segment and has lost out on huge opportunities. Both Ronnie Screwvala (UTV) and Raghav Bahal (TV 18) are sharp and ambitious and that's what makes one optimistic about these companies.

Another production house, the low brow Adhikari Bros, was among the first to tap the capital market and launch a channel of its own, Sab TV. It continues to be a prolific producer and the channel has survived in spite of all odds.

Among other major early players, Nimbus has emerged as a major powerhouse in cricket rights syndication and production. It has one of the healthiest cash flows in the business. Nimbus does have a few shows on air but has still not been able to emerge as a major player in TV programming.  Similarly, it has so far been involved with feature films rather tentatively. However, given promoter Harish Thawani's inventiveness and business acumen, Nimbus is bound to be in the limelight in the years to come.  Two other companies that rode the earlier stock market boom in 1999-2000 were Creative Eyte and Cinevistas. Both have been disappointments so far. Cinevistas of late is trying to make a comeback with a slew of successful shows and a reasonably successful film 'Garv.' The Alva brothers' Miditech has been quietly producing non-fictional programming for various channels for the past decade.  It recently ventured into the entertainment genre and is a company to watch out. Anuradha Prasad's "Bag Films" too has managed to produce a healthy mix of news and entertainment programming. Sidharth Basu (Synergy), Ramesh Sharma (Moving Picture), Manish Goswami (Sidhant Cine Vision), Vipul Shah (Optimatryx), the Mehras (Eagle Video), Neerja Guleri (Prime Channel) are some other successful middle-level production houses.  The south too has had a few success stories like K Balachandra, Padmini Kutty and Radan but the spectacular success has been two established barons, Kalanidhi Maran of Sun TV and Ramoji Rao of Eenadu TV. One can expect both these companies to be listed on the stock markets within two to three years.  The promoters of Balaji, perhaps the most successful of the production houses, realised that its purple patch may not last and hence opted to sell a part of the company. Or they felt they lacked the professionalism to grow bigger. The latter is a problem, which other TV content creators need to watch out for.

(Amit Khanna is chairman of Reliance Entertainment. The views expressed here are his own.)