According to the talks, UTV will keep the advertising revenues while Sun will enjoy the distribution earnings. The spill over revenues after a prescribed limit will be shared by both the partners.

UTV will invest in the programming and marketing of the channel. The distribution of the channel will be handled by Sun, which runs a cable network in Tamil Nadu called SCV.

"The functioning of the kids‘ channels will be similar in arrangement to the Sun Network channels. While Sun sells slots to different producers, in case of the kids‘ channels UTV will take care of the entire content and marketing," the source says.

Sun Network, which has channels in the general entertainment, movies and music space, does not operate any kids‘ channels. If the deal sails through, Sun will get into the kids‘ genre without making any investment on content. "Being a dominant player in South India, only Sun can get into such deals," says an industry observer.

For UTV, the deal will put it in partnership with the biggest broadcasting company in South India. The distribution of the Tamil language channel will be assured as SCV is the dominant cable network in the state. Though Sun Group has almost no cable presence in Andhra Pradesh, UTV can use cross-promotion on the network‘s Gemini TV to popularise the kids‘ channel.

UTV, in fact, wants to sew up a deal that will enable it to spread across the four south-language states with Sun, the source said. UTV, along with promoter Ronnie Screwvala, already runs a Hindi kids channel, Hungama TV. United Home Entertainment is the company that owns and operates Hungama TV.

The talks between UTV and Sun Network are, however, still inconclusive. "There is no conclusive agreement yet. The deal structure could also change as the talks progress," the source said.

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UTV, Sun in talks for Tamil kids channel