B4U Television Network has served a legal notice on Fashion TV and Modi Entertainment Network (MEN) for breach of contract. This follows a new distribution and marketing agreement signed between Fashion TV and MEN. B4U has, in retaliation, terminated its contract with MEN for distributing its group of channels in India.
B4U and Modi Entertainment Network had entered into a five-year distribution and marketing contract with Fashion TV, beginning April, 2000.
Modi Entertainment a couple of days back signed a five-year direct contract with Fashion TV for distributing and marketing the channel in the country. For ad sales, MEN plans to rope in Buena Vista Television India, a division of Walt Disney India where Modis have a 49 per cent stake.
Industry sources say that, Modi wants Fashion TV to go pay within three months. The price will be around Rs 4-5 per subscriber. With ad revenue not flowing because of the continuous threat from the government to ban the channel for its allegedly obscene content, Fashion TV finds the pay TV route lucrative as it has a compulsive niche audience from the youth.
Modi Entertainment Network chief executive officer Rajan Kaicker admitted that MEN had received a legal notice from B4U. He said, the distribution of the B4U channels exists with MEN.
Modi Entertainment does not agree that Fashion TV has an existing contract with B4U. “Legally, they had closed their relationship with B4U some time back. They were shopping for partners. Major players were in contention. They approached us and we agreed to the terms,” said Mr. Kaicker.
For popularising Fashion TV, B4U had introduced an Indian window to showcase fashion designers and events. It had a revenue-sharing arrangement with Fashion TV but there was a dispute on the revenue growth of the channel.