UTV Software Communications is planning to launch two new speciality channels in the next five months.
“We will launch the channels by June-July,” said Ronnie Screwvala, MD and founder CEO, adding that one will be a regional language channel that will run translated content from specialty channels like UTV Bindass and the other a “mass specialty” channel like UTV Action. “The thought is to have niche channels that can run on contents which are easily produced, while not burning a hole in our pockets,” he said.
UTV, which reported its quarterly results for the third quarter ending December 31, said its total operating revenues grew by 28 per cent to Rs 7,041 million compared with Rs 5,506 million in the same period last financial year. Television business has been a key contributor to UTV’s growth this quarter, from revenue and Ebitda (earnings before interest, taxes, depreciation, and amortisation) standpoint. “Our TV channels’ business witnessed growth in advertising sales driven by better viewership and hence a higher monthly revenue run rate that continues to grow, month on month,” he said.
Screwvala is now keen to channelise an advertising driven growth for the four TV channels – UTV Action, UTV Bindass, UTV Movies and UTV-Bloomberg, which the company runs. “We have differentiated from other broadcasters by focusing on the urban and younger audience, targeting the four channels at a niche audience, and we think it’s time to get higher realisations from advertising,” he said. UTV has been carefully creating a 360-degree platform for its channels with a strong web initiative and ground events to enhance the brand.
Screwvala is also banking on El Shaddai, a third person action adventure console game, to sell a minimum one million units when it releases in April this year. “We have signed minimum guarantee deals worth $10 million for the merchandise and ancillary rights with top-most apparel and toy brands in Japan. We are in the process of signing similar deals in the US and Europe markets,” he said . El Shaddai will be distributed by Microsoft and Sony in Japan. Over the last two-three years, UTV entered the gaming business through acquisitions and subsequently heavily invested in each of them.
Of its investments, the largest proportion has gone into Ignition (console game) which the company believes holds the key for the segment’s success. The company’s gaming portfolio also includes mobile games (Indiagames) and online games (True Games).
UTV True Games is expected to launch two multi-player online role-playing games (MMORG) in the next financial year. “These games do not involve any subscription fee and are based on the micro-transaction payment model (in-game purchases). We will syndicate the games to leading gaming platforms in India,” said Screwvala.
While Indiagames and publishing of online or console games are the only revenue contributors, it is sales of console games that are expected to constitute a major part of UTV’s gaming business from the next financial year.
Also, intent on reducing its dependence on films, UTV has already scaled down the revenue contribution from the films business to 50 per cent (from earlier 90 per cent a few years back) and is expected to be around 40 per cent within a couple of years. It follows a policy of amortising 60 per cent of the cost of movie production during the first year of release with the balance being amortised over the useful life of the respective movies as per management’s judgment. In comparison, Eros International Media follows a policy of amortising 72 per cent of the cost in the first year and 3 per cent each over the next nine years.
