News: Time Warner signal on Zee screen

(TT 01/09/2006) Mumbai - US media majors are looking to grab space on India’s small screens.

The Time Warner group is reportedly in talks to pick up a 15 per cent stake in Zee Telefilms. It could also pick up a larger stake in Zee’s cable business.

While no official confirmation was available on the development, market sources reveal that a financial and technical tie-up is expected between the two companies within the next two weeks.

Sources reveal that the investment is likely to be through Time Warner Investments.

According to the website of Time Warner, Time Warner Investments seeks to acquire minority equity stakes in private companies, whose operations have a strategic fit with an existing Time Warner business.

Recently, Walt Disney had picked up the 100 per cent United Home Entertainment, which owns Hungama TV. It also acquired a 14.9 per cent stake in parent company UTV Software Communications.

Zee Telefilms has a 74:26 joint venture with Turner International, a Time Warner group company, to distribute the Zee Turner pay channel bouquet in India and neighbouring countries.

Sources say the induction of the strategic partner was on the cards for the cable business of Zee Telefilms, as the company was looking forward to reinvent this business for substantial revenue enhancement.

In the last fiscal, the company decided to demerge its news and cable divisions into separate businesses.

While the news business was transferred to Zee News Ltd (ZNL), the cable business of the company and that of Siti Cable Network, a wholly owned subsidiary of the company, will be transferred to Wire & Wireless (India) Limited. It left Zee Telefilms as a focused producer of TV programming, movies and music.

The cable business of the company had stated objectives of pursuing new technology businesses with renewed focus, including cable digitisation, broadband and similar initiatives.

Time Warner Cable is the second-largest cable company in the US.