Network 18, the holding company of TV 18, Global News Broadcast, Web 18 and Studio 18, is investing $10 million in a new entertainment company -- The Indian Film Company, to be listed on the Alternative Investment Market of the London Stock Exchange by mid-May.
Raghav Bahl, founder-promoter of the TV 18 Group, said Indian Film Company will be a film asset owning firm. "Nobody has looked at this kind of a structure for a film company in India. It will have a fund-like structure in which Network 18 will own 9 per cent stake and raise nearly Rs 400-crore (Rs 4-billion) at the AIM," he said.
Bahl said the new firm would acquire rights of at least 40 films a year. "The strength of the company will be in marketing and exploiting film rights. We will own the IPR and exploit the theatrical rights of films for the domestic and overseas markets, their satellite TV and DVD rights," he added.
The new company will also finance films and enter into co-production tie-ups with directors. "We will buy rights of medium budget and big commercial Hindi films," said Sandeep Bhargava, Studio 18 CEO, who will now move to London to head the new company. Studio 18 is TV18's film company in India.
On why the new entity was being listed on the AIM, Bahl said the present Indian regulations do not permit such companies to be listed. "Besides, 100 per cent FDI is allowed in films," he added.
Back in India, Studio 18 will continue to produce and distribute Hindi films as part of TV18. "The Indian Film Company will have an arm's length commercial relationship with Studio 18," said Bahl. However, Studio18, which recently distributed Honeymoon Travels and Namaste London in select markets, will offer all its productions to the AIM-listed company on a 'first rights' basis.
According to the 2007 PricewaterHouse Coopers report on the Indian media and entertainment industry, film entertainment is estimated at Rs 84.5 billion and projected to grow to Rs 175 billion by 2011.
