Utv Software Communication

UTV Software Communications Ltd. is considering the proposal for an alliance with The Walt Disney Company that proposed to acquire 100% of Hungama TV channel, one of the three UTV’s verticals, and an equity share of 14,9 of capital. There are several global opportunities for UTV anyway: one would be to enlarge the existing base of UTV in the Indian market and improve scaling up in an existing vertical or start a new vertical. Another opportunity would be to expand in international markets through a joint venture or a partnership with a foreign studio. Finally UTV could also acquire attractive companies in India and abroad to expand and confirm its position in the country. In order to achieve their global objectives, in 2005 UTV had transformed itself from a BtoB model, into a BtoC one. Indeed this latter is highly scalable compared to the BtoB model, because it gave the ability to create and retain intellectual property. Since the main objective of the company is becoming international, also because in India there are 25 million non-residents who stimulated demand for Indian contents, the alliance with Disney could give UTV the opportunity to expand globally. An important factor that shouldn’t be underestimate is also the huge amount of money UTV would gain selling Hungama TV, achieving the revenue of Rs5billion by 2008. However this is just one of the advantages in the alliance; another important one is that Disney, as said by its president, would bring to UTV their global media and synergy expertise, including developing and distributing high quality content in 20 countries and gaining linked franchises across other medias. As Screwvala said in an interview ‘if the demand isn't broad-based, it will always remain a niche’. On the other hand there are also many disadvantages, such as the fact that doing this alliance, Disney would establish its presence in the Indian market and get the access to the creation of indigenous content, the factor that make UTV unique o...