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TV software companies mushrooming. Is a shakeout imminent?

TV software companies mushrooming. Is a shakeout imminent?

Author | exchange4media News Service | Tuesday, Oct 01,2002 7:26 AM

TV software companies mushrooming. Is a shakeout imminent?

They are all eyeing the Rs 1,800-crore television software business. Recently Mukta Arts announced the setting up of its independent TV software division. Ajay Devgan-Kajol promoted Devgan Entertainment also entered the business and Boney Kapoor-Sridevi has also decided to jump into the bandwagon.

First some numbers. According to the Morgan Stanley report on the media sector, the revenues of production houses is estimated to be Rs 1,800 crore during financial year 2002. It has grown at the compounded annual rate of 22 per cent over the last two years and is expected to continue to grow at the same rate. So is there space for so many players? Is a shakeout imminent?

According to a sources at Star TV, "There is demand from channels who are constantly looking for content. But only those who can offer quality will survive. We at Star have developed a comfort level with some producers and like to work with them.'' Hence, cash strapped smaller production houses will find it difficult to invest in technology, infrastructure and large quality productions.

Industry analysts said that many smaller companies such as Sanjay Khan Productions which had some big plans a year back, is now struggling with just a couple of shows on Doordarshan and Zee. Others such as Cinevistaas are getting into film production.

However, the reason why many smaller companies are getting into the business is because of the possible revenue potential. If the companies are able to retain the intellectual property rights (IPRs) for the content, then revenues could be generated from separate sale of rights in the international markets and through DVD, VCD and video on demand rights.

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