Financial Daily from THE HINDU group of publications
Friday, Sep 27, 2002
Industry & Economy - Radio/TV
Disney's kids channel nixed
NEW DELHI, Sept. 26
WALT Disney's plan of launching 24-hour children's channel in India - The Disney Channel (TDC) - has come a cropper.
This comes almost a year after the company moved the Foreign Investment Promotion Board (FIPB) in October 2001. Though an initial go-ahead was received from the Department of Industrial Policy and Promotion (DIPP) in January this year, a final decision against the proposal was taken only last week.
The FIPB, under the DIPP, has been informed by the Ministry of Information and Broadcasting (I&B), the administrative Ministry in this case, that it cannot support Walt Disney's proposal to launch The Disney Channel.
The US company had sought permission to set up a wholly-owned subsidiary and launch TDC for Indian viewers.
According to sources, the I&B Ministry's decision was taken after consideration of the guidelines issued by the Ministry of Commerce, including Press Note 18 of 1998.
As per the note, any foreign company which has an existing joint venture in India needs a `no-objection certificate' (NoC) from the Indian partner if it wants to set up a business in the same or related areas.
Walt Disney, the second largest media company in the world after AOL Time Warner, already has a 50:50 joint venture company - WD India Private Ltd - with the K.K. Modi group in India.
The company is engaged in consumer products with the Disney brand and programme licensing to free-to-air television channels.
Hence, the foreign company has to seek a NoC from its Indian partner.
The Indian partners have been opposing Disney's proposal for setting up a 100 per cent subsidiary and launching of Disney Channel on grounds that the businesses of the existing joint venture company and the proposed wholly-owned subsidiary are similar. The US company has, however, refuted this.
Earlier, in January this year, FIPB had permitted Walt Disney to launch the Disney Channel with riders that the new wholly-owned subsidiary will not be permitted to undertake activities that is already being undertaken by the joint venture company.
Walt Disney later made representations against the riders which were forwarded to the I&B Ministry for its comments.
Now, finally, the I&B Ministry has clarified that "the proposal of Disney was examined in this Ministry after taking into consideration the guidelines issued by the Ministry of Commerce, including Press Note 18 (1998) and a final decision was taken that this Ministry cannot support the instant proposal of Walt Disney to start a Disney Channel.''
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