Prasar Bharati acting CEO Anil Baijal surely must be in a dilemma. His plan to not continue with existing DD Metro partner HFCL-Nine and instead go in for open bidding has backfired if one goes by the kind of offers made to pocket the 8 to 10 pm prime time slot on the network. Rs 180 million by Sri Adhikari Brothers as against the Rs 1,210 (though for a larger programming time block) offered by HFCL Nine is obviously something that will not please either Aunty Sushma or the PMO.
So it‘s no surprise that noises have emanated from within Mandi House that the bids are not acceptable as the offers are too low. No official notice has been sent to the bidders on what it intends to do.

According to industry sources, HFCL Nine CEO Ravina Raj Kohli has been in closed door meetings with I&B minister Sushma Swaraj to try and sort out the issue and win back the slot for her company.

In the meanwhile, the bidders, Shri Adhikari Brothers, Prachar Communication‘s, and PNC are standing aside watching the developments.

"The facts are that they tendered the DD Metro slot without any floor price. Now they cannot complain that the bids are too low," he points out.

Adhikari is also livid about the fact that HFCL-Nine did not put in its bid and now it is trying to make a play for DD Metro. "Why did they not bid?" he asks.

Including Prachar‘s bid, the total DD can expect from the 7-11 pm slot is Rs 240 million, one-fifth of what HFCL-Nine had paid last year.

ETC Networks Limited has declared a profit after tax (PAT) of Rs24.3 million on a turnover of Rs538.2 million in the financial results for the year ended March 31, 2001.

On the expenditures front, 67.3 per cent went into programming and telecast and cost the network Rs288.1 million. With a paid-up capital of Rs116.99 million, the audited report shows earnings per share (EPS) is Rs2.08.

Into its second year of operations, etc channel has not only consistently retained the top position amongst the music-based channels in viewership rating but also translated this popularity to impressive revenue and profit figures, a company release states.

etc Channel Punjabi, ETC Networks‘ regional channel, is also doing extremely well and about to complete a year of operations, the release states. The locking in of the exclusive rights to telecast Gurbani live from Golden Temple at Amritsar has proved a great hit with Punjabi audiences.

Now the channel is poised to tap revenue from international markets, having tied with TV Asia, a leading Hindi channel in the USA while negotiations are also on and in the finalisation stages in UK, Europe and Canada, the release adds.

On the transmission front, the company is very shortly going to convert both the channels to digital services from the current free to air analog service, which the network hopes will cut costs down to about 30 per cent of what exists at present.

And while on transmission, ETC Networks is the first channel to get government clearance to build a commercial teleport in Mumbai. Once the teleport is commissioned it will reduce the operating costs of the channel and also provide additional revenue streams for the company by offering uplink services to other private channels and Internet service providers.

Commenting on the first year result of the company, Jagjit Singh Kohli, managing director of ETC Networks Ltd. says: "We remain committed in our determination to emerge into one of the leading players in the satellite television scenario of the country and maximizing shareholders wealth. We look upon the time ahead with great expectation towards building on the enterprise value, in earning higher growth in advertising and other sources of revenue."

The Ronnie Screwvalla-promoted UTV Software Communications Ltd‘s financials are out and it has made a net profit of Rs 160 million rupees on a total revenue of Rs 1,510 million for the year ending March, industry sources say.

Sources have been able to extrapolate the following information: For the year ending March 2001, the group‘s media revenues were Rs 1,510 million.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) were Rs 320 million, with a profit before tax (PBT) of Rs 200 million and a profit after tax (PAT) of Rs 160 million.

The revenue represents a 28 per cent jump over the last year, EBITDA a jump of 151 per cent and PAT an increase of 167 per cent.

From this year, they follow an accounting policy of 100 per cent write-off, which further made a deviation of profits of Rs 35 million. UTV follows a five-year write-off policy on all their plant, machinery and equipment. The group‘s accounts are audited by Arthur Andersen.

Their prospectus draft and research report show a paid up capital of Rs 120 million, therefore their earnings per share (EPS) in March 2001 would be Rs3.40.

The group‘s revenues and net profits come from multiple streams, broadly broken up as: - TV Content: 40 per cent - Ads / Dubbing / Inflight / Live Events: 15 per cent - Motion Pictures: 12 per cent - Post Production: 20 per cent - Animation: 10 per cent - Air time sales and distribution: 3 per cent.

The Group has over 400 clients. The top 10 clients represent only 21 per cent of the revenue stream. Therefore their client dependency on any one single client is not too high. Of the 400 clients, 45 are international and global clients and export and international business represents 18 to 20 per cent of their annualised figures.

UTV Software Communications is made up of United Television (UTV) and four subsidiaries - Vijay TV, UTV Singapore, UTV Malaysia and UTV Interactive.

Private broadcasters just don‘t seem to have anything going for them on the Doordarshan front. Sri Adhikari Brothers Television Network (SAB) and Cinevista Communications, both major suppliers of software for DD1, have blamed lack of demand from advertisers for the poor results the companies registered in the financial year ended 31 March 2001.

While SAB managed to stave off losses (net profit Rs 103.7 million down 40.51 per cent from last year‘s RS 174.3 million), Cinevista communications has posted a net loss of RS 119.9 million.

SAB‘s total income stood at RS 927.9 million as against RS 400.1 million in the financial year 2000. A statement put out by SAB says: "During the year under review, the policy of Doordarshan related to additional spot buys on various programmes has put heavy financial burden on the company. The company from time to time, has put forth its case with Doordarshan for rationalisation of commercial terms and for withdrawal of additional spot buys."

As the matter could not be resolved till 31 March 2001, the company has decided as prudent accounting practice to charge the same to the P&L account, which has resulted in reduction of profitability."

Cinevista Communications fared far worse, with a net loss of RS 119.9 million in only the first year of its listing on the bourses. Last year, it recorded a net profit of RS 90 million.

Cinevista‘s net sales stood at RS 396.7 million while the cost of production and telecast stood at RS 394.1 million.

It blamed the results as being due to the erosion of viewership of Doordarshan. Continuing downturn in demand for air time on DD amongst advertisers has led to erosion in selling volumes and selling rates, it said. As a consequence over 18,000 seconds of air time remains unsold on the various programmes that were telecast on DD.

Cinevista also wrote off all the expenses related to the weekly game show Knock-Out, which was scheduled to be telecast on DD-1 from 28 January 28. The show never went on air and Cinevista has hauled DD to court over this matter. A writ petition for the same is pending in the high court in New Delhi.

HFCL-Nine Broadcasting India Ltd (HNBIL) today closed the chapter on what has been an acrimonious relationship and declared it would not bid for the prime time slot on national broadcaster Doordarshan‘s Metro channel "due to the unrealistic non-financial terms of the contractual arrangements proposed by DD."
The statement put the lid on speculation that Nine Broadcasting might make a fresh pitch for prime time slots on DD Metro after the failure of Prasar Bharati‘s efforts to attract bids. This is in spite of reports that the pubcaster would be calling for fresh bids without the requirement of a minimum floor price.

The company announced that the television business of HNBIL on Metro would cease to exist from 10 September 2001. After that date, HNBIL will downsize its operations and a core team will remain to explore further opportunities but the company itself is not shutting down, an official release said. However, all the staff related to the DD Metro business have been told to look for jobs elsewhere.

The statement said HNBIL was still interested in the partnership with DD Metro but only if DD was willing to deal with HNBIL on realistic terms.

The statement called the tender for DD Metro slots as unrealistic because:
1) New media and Internet rights to belong to DD.
2) The hold back clause for the re-runs of programmes for one year after the play out of the final episode could date programmes by more than two years before replay thereby reducing their value
3) The rigid FCT allocation, the fact that DD, without any financial consideration will use the programmes on DD World thus reducing the value of any international sale for the shows.
4) And most of all, the clause that DD reserves the right to terminate the contract without notice and without ascribing any reason to the company on-air makes it a pointless contract.

Listing the channel‘s successes in the nine months it had been on air, the statement said Nine Gold had:
* Increased the viewership base on DD Metro from 15.6 million to 25.6 million (7-10 pm).
* The time spent by viewers for the 7-10 pm block increased by 89%.
* Ratings have increased by 200% and revenue has increased significantly.
* Viewership in C&S homes has quadrupled.

And the options available to HFCL Nine Broadcasting CEO Ravina Raj Kohli ?
Film production for one (seems to be a popular theme with both broadcasters - Zee, Sony - and content providers - UTV, Balaji Telefilms) and then there is its subsidiary Nine Entertainment which could become a full fledged content provider.

One thing that HFCL Nine will have to write off with the closure of its Metro operations is what industry sources estimate to be Rs 1,500 million in accumulated losses built up over the last nine months.