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Sony, BBC in alliance for India business

Last updated on: August 10, 2012 11:53 IST

Sony, BBC in alliance for India business

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Varada Bhat and Arijit Barman in Mumbai

BBC Worldwide India, a unit of British Broadcasting Corp, and Multi-Screen Media, which runs Sony Entertainment Television, are finalising a mega alliance involving distribution and sales.

Sources aware of the negotiations said the arrangement would be similar to the one that NDTV recently stitched up with STAR India. BBC, too, is likely to outsource its ad sales to MSM for its two channels and its clutch of websites.

The new joint venture will play out in stages. To begin with, BBC's channels  BBC World News and BBC Entertainment will move onto the OneAlliance distribution platform, an equal venture between MSM and Discovery Communications.

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Image: People are reflected in a sign as they walk past British Broadcasting Corporation offices in central London.
Photographs: Toby Melville/Reuters
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It already distributes over 27 channels, including all of MSM's general entertainment, movies and sports channels, and the Discovery bouquet, Neo Sports, Neo Prime, Aaj Tak and Headlines Today, among others.

Subsequently, BBC will also commercially launch two more channels on the new distribution platform: BBC Kids or CBeebies and BBC Knowledge.

Currently the kids' channel is available only to limited viewers on Tata Sky and select cable homes, and is free of advertisements.

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Image: People walk out from Sony Corp's headquarters in Tokyo.
Photographs: Yuriko Nakao/Reuters

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The world over, BBC Entertainment is a combination of three channels, lifestyle, knowledge and entertainment, while in India, all three had so far been clubbed under one umbrella of BBC Entertainment.

But, sources said that to incentivise the alliance, the entire ad sales of BBC News and Entertainment and its popular web properties like bbc.com and topgear.com will be outsourced to MSM to manage.

"The distribution and carriage costs in television are so much that such fees almost equal or become more than what you earn through advertising revenues. It's even more acute for niche channels like BBC," said an official.

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Image: A woman walks out of British Broadcasting Corporation offices in central London.
Photographs: Toby Melville/Reuters

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"It's a 60:40 split between subscription and advertising money. Running a niche channel (content, carriage fee plus marketing) would be Rs 25 crore (Rs 250 million) and revenues barely cover operational costs. But digitisation is expected to change the landscape," added a media buyer.

A formal announcement is expected soon.

When contacted, an MSM spokesperson said it was a mere rumour. BBC India's spokesperson did not respond to email queries. BBC Worldwide Channels South Asia head, marketing, Ishita Roy, could not be contacted and Deepak Shourie, director, South Asia, BBC Worldwide Channels, did not want to comment on the subject.

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Image: Sony Corp's headquarters is pictured past a flag bearing the company's logo in Tokyo.
Photographs: Yuriko Nakao/Reuters

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But sources say BBC has been looking to forge partnerships for the past year and has had negotiations with Reliance Industries and The Times of India Group.

"Between BBC and Sony, there is no conflict of interest as they belong to different genres. So, the English channels can be bundled together," said an official familiar with the development.

MSM, which has revenues of more than Rs 2,400 crore (Rs 24 billion), owns Sony Entertainment, SAB TV, SET Max, PIX, and AXN. BBC Entertainment is yet to break even in India.


Image: A BBC building is seen in White City in western London.
Photographs: Alessia Pierdomenico/Reuters

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