RTL has unveiled an alliance with Anil Ambani’s Reliance Broadcast Network as the pan-European broadcaster dips its toe into Asia at a time when growth in its core markets is flagging.
The European group, which said in March that it was looking to secure a deal with a local partner in India, said the two had agreed to form a new joint venture company that would initially produce two English language channels.
One would be a reality channel, the other an action channel. It would aim to launch other thematic channels in India over time. The move will help Reliance Broadcast, which already has a joint venture with CBS Studios operating three English language channels, expand its portfolio of international content and compete with Rupert Murdoch’s Star India and Zee Entertainment.
Reliance Broadcast owns India’s largest FM radio network and recently launched BIG Magic, an entertainment channel aimed at India’s Hindi population. It also owns an outdoor advertising and live entertainment business.
RTL’s first-quarter results earlier this month, meanwhile, underlined the challenge facing western European free-to-air broadcasters at a time when the outlook for TV advertising remains uncertain. RTL reported a 21 per cent fall in operating profits to €181m ($258m) on sales down 1.7 per cent at €1.2bn.
India is set to overtake the US as one of the largest direct-to-home satellite markets by 2012 and is predicted to overtake China as the largest pay-TV advertising market in Asia by 2017 with $5.6bn in net revenues. However, margins across the Indian pay-TV market are among the lowest of any emerging market because of rising costs, competition and reliance on legacy analogue networks.
Shares in RCom, Mr Ambani’s telecoms group, have been under pressure in the past year amid investor concerns over its debts.
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