UTV, ONE of the later entrants in the broadcasting business, is looking at downsizing its original investment of Rs 660-700 crore, to be invested over the next 3 years, in the segment.
An internal mail that Ronnie Screwvala, chairman and CEO, circulated to employees read, “In financial terms, the original plan had year-marked an investment of Rs 660-700 crore in broadcasting over the next 2-3 years and our present actions would result in an overall investment saving of Rs 200-240 crore.”
According to the new plan, offices of channels World Movies and UTV Movies, currently at Noida will be shifted to Mumbai in the next three months. Major costs including carriage fees, costs of starting new channels and operational costs would be reviewed to see how these costs could be trimmed.
Through these measures, UTV plans to reduce its anticipated losses in the broadcasting vertical by 60 per cent.
A benchmark of Rs 100 crore annually has been set for investment in the business while expected losses for the third and fourth quarter of 2008-09 have been benchmarked at Rs 15 crore. The expected loss for the subsequent fiscal has been capped at Rs 25 crore, while 2010-11 is expected to be the breakeven year for the business.
Although UTV saw a 138 per cent leap in its revenue for the quarter ended September 2008 when compared to the same period last year, experts feel that it has not yet made enough headway as far as its television channels are concerned.