A study done by online media exchange exchange4media.com and tomtommed by it in the press has been rubbished by Star India. The study had claimed that a large chunk of advertising inventory on satellite channels goes underutilised.
Says Star India executive vice-president Raj Nayak: "There are tremendous anomalies in the study. Only a channel can know what inventories it has. Analysis of data can tell you how much inventory is utilised and not under-utilised. Each channel has a different way of dealing with commercial time. We have a strict limitation of taking on only 10 minutes commercials for an hour of telecast. (This is a statutory requirement as per the Hong Kong government‘s broadcasting code. Star is uplinked from Hong Kong) DD takes maybe 20 minutes, and even more - there is no limit with DD. Even Zee TV took on so much advertising for Miss World that they spread it over five and a half hours. Ditto with Sony. So how can any one tell for sure?"

The exchange4media study, reportedly based on the Media Monitoring Report by Consumer Opinion and Future Trends (COFT) for a four-week period in September 2000, had claimed that etc channel had utilised its inventory to the maximum at about 90 per cent as compared to 41 other television channels beaming on prime time between 7 and 11 PM

The other channels which have been analysed include: Sony at 77 per cent, DD Metro and Zee News at 75 per cent, Set Max and Zee TV at 73 per cent, Raj TV at 71 per cent, Asianet and Zee Cinema at 70 per cent, Alpha Marathi at 68 per cent, Sun TV 67 per cent, CNBC at 66 per cent and Star Plus at 63 per cent.

Additionally, the survey had said that inventory utilisation suffered more in the afternoon band between 12 noon and 4:30 pm, with DD National ranking as the best at 76 per cent, followed by Zee TV at 73 per cent, CNBC at 66 per cent and Sony at 63 per cent.

Nayak questions how any analysis can be done on seven-month-old data in a dynamic industry such as television where changes are taking place every second. "It‘s a piece of rubbish," says a Star India source.

Officials from exchange4media.com were not available for comment as this story was being uploaded. A reaction is awaited.

Confirming what was already known in trade circles, the board of directors of Balaji Telefilms Ltd and Nine Network Entertainment India Private Ltd (a wholly-owned subsidiary of HFCL Nine Broadcasting), in their respective board meetings held today, announced they have decided not to proceed with the merger of the two companies.

Both Balaji Telefilms and Nine Network feel it is in their respective commercial interests not to proceed with the merger at this stage as the synergies that were anticipated to arise from the proposed merger are no longer seen to exist, a press release issued jointly said.

HFCL Nine Broadcasting India Ltd wishes to focus for the time being on its existing broadcasting activities rather than the acquisition of interests in content production companies, a company release said.

Both Balaji and HFCL Nine look forward to continuing their existing relationships, the release concludes.

As per the deal announced last November between the two parties, Balaji Telefilms was to acquire Nine Entertainment India for Rs 340 million under a swap ratio where 65 shares of Balaji would be swapped for 200 shares of HFCL Nine. Post-acquisition, HFCL Nine was to hold 20 per cent equity in Balaji Telefilms.

Balaji-HFCL Nine merger off?
Balaji board to meet on merger with HFCL Nine tomorrow

The board meeting that Balaji Telefilms will be holding tomorrow on whether to go through with a merger with HFCL Nine Broadcasting will be nothing more than a formality, if industry sources are to be believed.

According to the industry grapevine, the decision has already been taken that there will be no merger between the two companies.

Balaji CEO Sanjay Dosi, queried about the rumours doing the rounds that the deal was off, declined to comment on the issue and said an official statement would be made available after tomorrow‘s board meeting.

Balaji, in a notice to the National Stock Exchange last week and the Bombay Stock Exchange yesterday, had said the meeting was being convened to consider a review of the proposed merger of Nine Network Entertainment India (a wholly owned subsidiary of HFCL Nine) with the company.

HFCL (Himachal Futuristic Communication Ltd) Nine Broadcasting is a 51:49 per cent holding company held by Vinay Maloo and Australian media magnate Kerry Packer. HFCL Nine was to take a 20 per cent stake in Balaji Telefilms.

The markets were also buzzing with the rumours. The Balaji scrip closed at Rs 144.90 after it hit the 8 per cent upper limit of the circuit breaker for the second straight day. It opened at RS 133.50.

The market sentiment is that the merger is likely to be called off and this would be good for the company because a merger would have entailed earnings dilution.

Balaji board to meet on merger with HFCL Nine tomorrow

After a long while, a court in the UK has provided some good news for media baron Subhash Chandra.

The Chandra promoted company Afro Asian Satellite Communications Gibraltar (AASCG) Ltd has won a five-year-long legal battle against Hughes Space and Communications International over a cancelled satellite contract.

The London Court of International Arbitration, in a ruling on 11 April, ordered Hughes to pay $38 million to AASCG plus up to $20 million in interest as well as court costs, the figure to be decided at a future date, the 30 April issue of Space News has reported.

Hughes Space and Communications International is part of Hughes Electronics Corporation‘s satellite manufacturing arm, which was sold to Seattle-based Boeing Co last year.

AASCG and Hughes signed a $700-million contract in January 1995 for two large mobile-telephone satellites that AASCG was planning as part of its Agrani project. AASCG made an initial payment of $38 million to Hughes as part of the contract. But in late 1996, Hughes stopped work on Agrani, saying that the project‘s backers were unable to finance further work.

But AASCG argued that Hughes stopped work on Agrani because of its greater interest in a contract with the Asia-Pacific Mobile Telecommunications (APMT) consortium of Singapore, a Chinese-backed concern that was planning a similar satellite system over East Asia.

For the US satellite maker, the AASCG-APMT episode has proved a costly one. In addition to losing the AASCG contract and being forced to reimburse the company with interest, Hughes was barred by the US government from shipping the APMT satellite due to technology transfer concerns. Hughes subsequently paid APMT a contract cancellation fee.