Financial Daily from THE HINDU group of publications
Wednesday, Jan 30, 2002
Financial Daily from THE HINDU group of publications Wednesday, Jan 30, 2002 |
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Radio/TV Industry & Economy - Radio/TV Disney makes headway
Ambarish Mukherjee
NEW DELHI, Jan. 29 MICKEY Mouse could be in India at last. Walt Disney has been allowed by the Foreign Investment Promotion Board (FIPB) to set up a wholly-owned subsidiary for the launch of the Walt Disney channel. This, despite repeated efforts by the K.K Modi group, Walt Disney's partners in WD India Private Ltd, to stall the US media giant's bid to set up a wholly-owned outfit. Though the FIPB has cleared the proposal, the final go-ahead from the Commerce and Industry Minister is still awaited. Currently, Walt Disney is the minority partner in WD India while the majority 51 per cent stake is held by the K.K. Modi group with management control. According to the existing rules, any foreign company, which has an existing joint venture in India, needs the `no-objection certificate' (NoC) from the Indian partners if it wants to set up a business in the same or related areas. In a way, however, the Modi group's efforts have actually paid off. According to the approval conditions laid down by the FIPB, the new wholly-owned subsidiary will not be permitted to undertake activities that are already being undertaken by the joint venture company. This leaves Walt Disney with very limited alternatives. For now, it has to restrict its operations only to channel launching and will not be able to develop and market products using the Walt Disney characters, concepts, ideas, cassettes, toys, education help and video products. The new subsidiary has also been barred from undertaking distribution of television rights and purchase and sale of commercial air time. Walt Disney Company (India) - the subsidiary - had proposed to invest Rs 141 crore over a five-year period. Essentially, it had planned to involve itself in the development of children's entertainment genre among Indian companies, use TV to encourage creativity among children, produce localised content and dub programmes in Hindi and other regional languages and provide direct business opportunities for local companies and agencies to work with Disney in creative content development, marketing and distribution. The market has been expecting the launch of Walt Disney channel in India for several months now. Currently, Cartoon Network from the Turner group is the leader, while Nickelodeon is a distant second. With the entry of Walt Disney, the market for children's channels is likely to get competitive.
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