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Anil Ambani to be India's entertainment czar
Sonali Krishna in Mumbai | January 17, 2006
Looking at straddling the entire value chain of the entertainment content carriageway, the Anil Ambani group is ensuring its footprints across every possible facet of entertainment.
Ranging from television to radio to films to exhibition to home video, the ADAE group seems to have a blueprint for every division in place, and the kick-off into the media and entertainment segment does not seem too far off.
On the ADAE agenda, FM radio seems to be the first initiative that will roll out. As of now, the Anil Ambani-owned Adlabs has bagged 26 licenses in all, making it the largest player in terms of number of licenses owned including stations of existing players.
Rajesh Sawhney, president, Reliance Entertainment said, "The ADAE bidding strategy is called value bidding. We paid Rs 29 crore (Rs 290 million) for 19 cities as a one-time entry license fee, and Rs 93 crore (Rs 930 million) for the seven big cities. The bidding will not have any impact financially on our business plan."
Sawhney also stated that growth in the radio business would come from B-class towns and hence the ADAE group would be looking at investing with an appropriate model in smaller towns.
"We are the only players today who have received licences in the Uttar Pradesh belt as well as some of the other northern regions. Radio is an extremely under-served market and our strategy lies in the selection of the market. Our attempt is to create rich audiences for our advertisers," added Sawhney.
ADAE is looking at a capital expenditure per station of Rs 1-5 crore (Rs 10-50 million) depending on the class of the city, and operational expenditure per station will vary from Rs 50 lakh (Rs 5 million) to Rs 5 crore. The FM radio venture of the ADAE group should be operation in the next 6-8 months.
While work is still in progress on ADAE's direct-to-home venture -- which is being called Reliance Bluemagic -- the group is optimistic about beginning its DTH service by Diwali this year. It is expecting allotment of six transponders on INSAT 4B by July this year.
According to industry reports, ADAE is all set to pump in huge investment into its DTH broadcasting network. The IPTV (Internet Protocol Television) initiative is also expected to be up and running according to an ADAE spokesperson.
Reliance Infocomm has chalked out an agreement with Microsoft to look at IPTV. The company is all set to enter consumer homes with broadband Internet through its fibre optic backbone. The group is looking at the same connectivity to be used to deliver entertainment content like channels, video-on-demand, among other things.
On the television front, no concrete plan is clear as yet, although what is known is that the group is looking at making inroads into this space as well. But with the acquisition of a controlling 51 per cent stake in Adlabs, the group is entering the exhibition business, film production, overseas distribution and the home video arenas aggressively.
On the film production front, Adlabs Films is looking at investing Rs 50-60 crore (Rs 500-600 million) every year and has already tied up with Ram Gopal Varma, Prakash Jha, Ramesh Sippy and Vipul Shah. Adlabs is targetting 10 films every year.
In the exhibition business, Adlabs already owns five multiplexes across the country. Manmohan Shetty, chairman and managing director, Adlabs stated, "We are looking at a total investment of Rs 200 crore (Rs 2 billion) over a three year initiative. By the end of 2008, we should have a total of 140 screens."
That apart, Shetty also said that they were now eyeing the B-class cities where they plan to acquire existing cinemas and also construct new cinemas to offer low cost cinema for its audiences. The rollout for this should take place over the next 12-18 months.
Experts point out that once Adlabs has a large network of theatres, it will be possible for the group to digitally transmit a movie from one centralised location to all the theatres through Reliance Infocomm's existing fibre optic network.
Adlabs is also venturing into the overseas distribution of movies and have already pocketted Kkrish, Babul, Janeman and Salaam-e-Ishq for distribution. Shetty pointed out that the effort was to extend the current international network by releasing more prints into an additional 20-30 mainstream cinemas.
Now also checking out the home video segment, Adlabs is looking at taking the acquisition route as a part of the company's plan to emerge as a big player in the rapidly growing segment.
Shetty confirmed, "We are in talks with the leading players of the home video segment for an acquisition deal. "Investment banking sources said Adlabs had sounded out all the established players in the industry for possible buy-outs. The list includes Shemaroo, Excel Home Videos and Ultra Group.
For ADAE, the blueprint seems determined for the group to emerge as the media behemoth of India.And though this being a totally new space for them, the group is leaving no stone unturned to ensure leading professionals of the media come on board to steer the entertainment yacht. But is ADAE getting a bit too ambitious too soon? That's something only time will tell.