Digital & Media Stocks: 12 Dec 2008

Times of India Group To Lay Off Around 5% Staff Across Businesses

IMPORTANT UPDATE

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Original story: High level sources from Bennett, Coleman and Co, Ltd. (BCCL/Times of India Group) have indicated that the group plans to lay off approximately 5 percent of its staff. The layoffs will be across businesses, including print, radio, Television and Internet, and across functions - whether editorial, finance, marketing or IT. In case of print, Times of India alone employs around 1000 people, so around 45-50 will be laid off. Indiatimes also employs around 900 people. Since morning we’ve heard rumours of between 600-1500 in all being laid off…doesn’t appear to be as bad as rumoured.

The layoffs haven’t begun yet, but pink slips will be handed out soon. We haven’t been able to ascertain what kind of a deal they’ll be getting. 

From a digital media perspective, it’s important to note that both Times Internet Ltd (Indiatimes) and Times Business Solutions Ltd (TBSL) will be impacted. 

We have not been able to confirm whether BCCLs latest television initiative, Economic Times TV (ET-TV) will be put off due to high costs.

The Times of India group is the largest media house in India, with publications including the Times of India, The Economic Times, Navbharat Times, Mumbai Mirror, Maharashtra Times, Bangalore Mirror, radio channels Radio Mirchi, TV channels Zoom nd Times Now, and magazines including Femina and Filmfare. Their online portfolio includes Indiatimes, online remittance business Times of Money, and classifieds businesses Times Jobs, Simply Marry, Magic Bricks. Earlier this year, the Times Group had bought Virgin Radio, which was rebranded as Absolute Radio.

Update: More inputs coming in - from what we’re told, Times Business Solutions Ltd (TBSL), which employs over 1000 people, is among the worst hit by the downturn; there’s a list that’s been prepared for layoffs at Times Jobs, and the number is expected to be upwards of 150.

TinselVision’s Closure Should Serve As A Warning For Video Content Portals

South Asian content site TinselVision has shut shop, reports PaidContent. Tinselvision had signed numberous deals, including with Zee TV, STAR India, Zoom TV, NDTV, UTV and even Yash Raj Films. Tinselvision began with offering Bollywood videos on download for $1.99, with membership priced at $9.99. Movies were priced at $3 each, with $10 for 5 movies. 

Eventually, the company took some content outside the paid subscription wall, and made some available for advertising supported free streaming. Remember that earlier this year, niche TV content site Jump TV had decided change focus from regional content to sports content.

The shutting down of TinselVision should also serve as a warning for other content streaming sites like Saavn, Big Flicks, Rajshri Media, Erosondem, Rediff iShare, among others. Most content owners may be giving them content for free, though some may be accepting a minimum guarantee, but bandwidth is a significant cost. Monetization via advertising hasn’t yet quite arrived, despite claims of significant paid downloads, and some projections for video advertising networks. The launch of video advertising networks like Jivox and VDOPIA should help, but given the current advertising market scenario, are advertisers biting?

Users are forever willing to view free content, but growth in viewership should be supported by the growth in revenues. Saying that the world will figure out a business model doesn’t really inspire confidence.

More on Tinselvision:

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Does Disney Hold A Majority Stake In UTV After The Open Offer?

Disney and UTV Group promoter Ronnie Screwvala have an open offer for the BSE listed UTV Software Communications, a media company with investments in Films, Television, New Media, Music and Gaming. Via an open offer which closed October 27th 2008, Disney and entities controlled by UTV promoter Rohinton (Ronnie) Screwvala picked up 22.65% in the company at a price of Rs. 860.79 per share, which amounts to a total acquisition price of Rs. 666.72 crores. The share price has plummeted from around Rs. 780 at the beginning of October, to around Rs. 227. The deal gives the two a combined shareholding of 83.25%, with the public shareholding in the company down to 16.75%.

What is not clear, is the split between UTV and Disney. Some reports have pegged Disney’s stake at more than 50% - hence a majority stake. However, a UTV spokesperson had told me in February that the Open Offer is a means for Disney to acquire 32.1% stake in UTV, and no more.

A recent email sent out by Screwvala suggests the same: “In the Shareholders’ Agreement between me and Disney it is clearly articulated that for a period of 4 years from the date of completion of the Open Offer, Disney Shareholding will not exceed 32.1%, nor will Disney exercise voting rights in excess of 32.1%.”

This suggests that Disney has acquired the option of increasing its stake after four years. (Update) According to a BSE filing before the Open offer, Disney owned 37.29% in the company.

We’re awaiting further inputs from UTV on the shareholding of UTV Software Communications Ltd.

Remember that this deal has to be such that Disneys shareholding in UTV Global Broadcasting Ltd, of which UTVs news channels are a part, does not exceed 26%, which is the FDI (Foreign Direct Investment) limit for news companies. Earlier this year, Disney had also picked up around 15% stake in UTV Global Broadcasting Ltd.

Screwvala and the promoter group entities - Unilazer Exports and Management Consultants Ltd, Unilazer (Hong Kong) Ltd also the right to acquire all the shares tendered in the open offer back from Disney.

Related:

– Q2-09: UTV Invests Rs. 256.39 Crores In Gaming; EBITDA Losses; Increases Stake In ITNation, IndiaGames

Rajeev Chandrasekhar In Talks To Buy Stake In INX News

Rajeev Chandrasekhars Jupiter Capital is eying a stake in INX News Ltd, which runs the news channel NewsX, reports Mint quoting sources. This had first been reported at PressTalk a few days ago, according to which Chandrasekhar was offered the (Peter and Indrani) Mukerjea stake in News X, but he declined to buy in at around Rs. 200 crores. Peter Mukerjea has denied to Mint, that he had any formal discussions with Chandrasekhar. INX was looking to raise $150 million in funding, which was expected to be closed by December.

The Mukerjeas own 50 percent in INX, while the balance in held by Temasek Holdings, New Silk Route, New Vernon Private Equity Fund, Kotak Mahindra Capital and Srei. Business Standard reported yesterday that the Bhaskar Group was in talks for acquiring a stake in INX. That report has since been pulled, but you can download the PDF of the cached version: here.

Chandrasekhar recently sold a significant stake in Asianet communications to News Corps STAR TV. He had picked up 51% stake in Asianet Communications in 2006 for an estimated Rs. 150 crores. It was reported recently that he was looking to acquire up stake in an English news channel, and was in talks with one in Delhi, and another in Mumbai. NewsX is one, not unexpectedly.

Update: Exchange4media reports of a patch-up between Tamil Nadu Chief Minister Karunanidhi and his nephews, the Maran brothers - which means that the Karunanidhi backed channel Kalaignar TV and Maran’s Sun TV will provide stiff competition to the STAR Jupiter/AsiaNet combine.

HT Media Forms Mobile Marketing JV With Velti PLC; Conflict Of Interest?

What a time to start a mobile marketing company…HT Media has formed a joint venture with Velti Plc, a London Stock Exchange listed company, to provide mobile marketing solutions in India, reports Livemint, an HT Media publication. Velti has had the BRIC countries on its radar, and earlier this year, reached an agreement to acquire up to 50 per cent of CASEE, China’s largest mobile advertising exchange, for an investment of up to US $6 million.

HT Media will hold 65% equity in the venture, which will be a subsidiary of HTs Internet subsidiary Firefly e-Ventures. Amit Garg, head of Firefly, will also head the JV, which will operate out of Gurgaon. Firefly also operates out of Gurgaon. 

This is the second significant strategic partnership for Velti - in 2007, they formed Ansible, a global mobile marketing agency with the Interpublic Group. Velti provides mobile advertising and marketing solutions to brands like Microsoft, GM, Coca Cola, Verizon, Bayer, Johnson and Johnson, Vogue Magazine, Mastercard, Colgate-Palmolive, Ferrero, Bacardi, as well as media companies like MTV, Disney, Associated Press, Fox Networks CBS and Real.

Going through Velti’s half-yearly financial report, I noted that Mobile Marketing and Advertising is largest segment, accounting for EUR 10 Million, platform services to enterprises accounted for EUR 3.2 Million, and platform services to operators accounted for EUR 2.6 Million. Download the report here.

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MySpace Hires India Country Manager; Official Nach Baliye Community

MySpace India has appointed Hari V Krishnan as Country Manager, reports Exchange4media. Krishnan joins from TravelGuru, an Online Travel Agent, where he was VP - Corporate Planning and Marketing. He’ll be based out of Mumbai, and report to Sung Lee, VP (Asian Operations) for MySpace. MySpace India went live sometime early in January, and was formally launched with a music event in April, with Tarun Tripathi as Director of Marketing and Content, and Deep Malhotra as Director of Sales.

More on MySpace

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