It was media baron Subhash Chandra‘s pet project to set up a channel advocating ancient Indian medicine, holistic healing, culture, meditation etc under the Organic or Chakra brand.

The channel‘s main audience would be in Europe, America, South Africa, Australia, and some south east Asian nations. The channel would be encrypted and carried on both cable TV and DTH systems as a subscription service and was in the planning stages for more than two years. As recently as June, Chandra was heard cheerleading Chakra employees that they could do pull it off.

No more. Last month, the channel was given a quiet burial, in an unreported move, by, sources indicate, Zee Telefilms broadcasting CEO Sandeep Goyal. Apparently, Goyal took the decision to cut off the oxygen to the channel with the transfer of all broadcasting responsibilities to him. Some 10 employees of Chakra have since reportedly departed; a skeleton staff of three or four employees has been left.

The channel was reportedly talked of as a Rs 200 million project within Zee, but was actually sanctioned with only RS 80 million in funds, of which only RS 30 million was disbursed. Some 150 hours of holistic healing programming were created, with another 100 hours slated to be wrapped up and canned very soon.

With the money situation tight, Goyal reportedly decided to pull the plug on Chakra, and instead consolidate the existing businesses. He has, it is believed, told the programme syndication team within Zee TV to sell the rights to the Chakra shows, which have been produced, to anyone interested in buying them, whatever be the sticker price. Insiders claim it would be better if Zee TV would hold on to the programmes as they have plenty of shelf life and could be used later.

In recent times, other new forays such as the Urdu channel UTN have been handed out the same treatment. In fact, Zee Telefilms‘ alleged decision not to invest in UTN led to its closure just a month or so ago.

All this at a time, when the company is persisting with an extremely myopic, high-on-cost but very low-on-strategy marketing campaign promoting its gaggle of new shows on mother channel Zee TV. The campaign uses a frail girl mascot Khushi to promote not only Zee TV but also 26 new shows. Basic marketing principles say that it is okay to use an umbrella brand to promote a product range, but sub-brands have to be promoted independently. Analysts have for long been demanding that the company drop its shotgun marketing approach and promote each programme independently. But to no avail. Some RS 120 million has been pumped behind it, which has resulted in just a handful of shows emerging as audience favourites. Among these: Kohi Apna Sa, Nilaamghar, Sarahadein, Baazi Kiski.

Thankfully, the company is doing some rejigging of its programming schedule as far as some of the popular new shows are concerned. It‘s over to Messrs Chandra, Goyal and marketing head Partha Sinha to pull out Zee Telefilms and Zee TV from the quicksand of sinking ratings, high costs, and a plunging share price, even as rival Star Plus continues to make gains with viewers.

When you‘re hot you‘re hot. Other media companies may struggle with financials in a depressed market scenario but no so Balaji Telefilms Ltd. The seven-year-old production company registered a net profit of Rs 66.24 million on net sales of Rs 236.20 million in the results announced for the second quarter ended 30 September 2001.

While cost of production and telecast fees remained at the same level as Q1, staff costs almost doubled to Rs 4.3 million compared to Rs 2.6 million in the last quarter. "This is due to the increase in programming hours," says Balaji company secretary Ajay Patadia.

The company managed to continue its pace of growth. Though net sales remained at the same level as the last quarter, the bottom line improved as net profit margins have gone up from 20 per cent to 28 per cent.

The other income in the quarter has gone up from Rs 0.28 million to Rs 5.2 million, principally through dividends earned from its investments in bonds and mutual funds. "The company has invested close to Rs 160 million in mutual funds," says Patadia.

Other expenses have gone up from Rs 8.1 million in Q1 to Rs17.5 million in Q2.

One aspect that is worth noting is that there was no interest component in this quarter. "Our company has achieved the target of being a debt free company," clarified Patadia.

The board has also declared an interim dividend of Rs 2.50 per share (25 per cent on an equity share of par value of Rs 10/-), the payment date being 12 November, 2001.

The figures of the corresponding quarter of the previous year have not been drawn since the listing requirements were not applicable.

The company owned by the family of former film star Jeetendra Kapoor expects to rake in a turnover of close to Rs 1000 million at the end of the current financial year, CEO Sanjay Dosi pointed out in a recent interview with indiantelevision.com.

Obviously the production house will continue to bank on its tried and tested formula of the weepy family drama that it expects will keep it laughing all the way to the bank.

Broadcasters can relax somewhat now that the Revenue Department has ruled that commission paid to advertising agencies will not be included in the value of taxable service in respect of broadcasting services.

Broadcasting companies, slapped with a five per cent service tax in July this year, had been unsure about whether the commission to ad agencies was to be included in the taxable service.

The companies had made a representation to the finance ministry claiming that a service tax on the commission amount, if levied on both the ad agency and the broadcasters, would be tantamount to double taxation. The revenue department has now clarified that service tax is separately leviable on the commission or discounts received by the ad agencies for placing the advertisements in print or electronic media.

Usually, the gross amount paid by broadcasting agencies is indicated in the invoices raised by them on the ad agency. The commission or discount, which is usually around 15 per cent of the gross amount given to the ad agency, is deducted and the net amount payable by the ad agency to the broadcasting agency is indicated.

The finance ministry, which examined the industry‘s representations, has clarified that the value of taxable service is the amount received by the broadcaster for providing the service.

According to Ramesh Narayan, president of the Advertising Agencies Association of India, service tax had been imposed on ad agencies three years ago, an imposition which amounted to 0.75 per cent of their revenues. Agencies were not happy about the charge, which he claims is a cumbersome levy and was passed on through advertisers.

The new notification, which concerns the broadcasting companies, clearly stipulates that the 15 per cent commission due to agencies will not be included in the value of taxable service, he says.