The Modi Group plans to challenge News Corp.’s Star TV by launching two pay channels in India, offering movies and family fare, in September.

The group has signed a joint venture for both channels, but for now the identity of the supplier is under wraps. The Walt Disney Co., and specifically the Disney Channel, is the rumored partner, but neither party will confirm the deal. :

Modi also has a pact to distribute ESPN in India, aiming to launch in September to coincide with the start of the cricket season. ESPN commands exclusive rights to Indian cricket matches, the sport about which Indians are most passionate.

The term “pay TV” has quite a different connotation here than in the Western world. Imagine a country where there are 100,000 cable operators, none, of which are restricted by geographical boundaries. Obtaining a cable license involves little more than a visit to the post office.

There is no such animal as a multiple system operator serving one city. The typical operator has a few hundred subscribers. This person uses a decoder to unscramble satellite signals, but has no means of restricting the service to his or her subscribers, That poses formidable logistical problems for any programmer who wants to distribute channels to the entire country, and collect fees from each cable operator based on the number of subs.

Also, Modi will face competition from the newly launched Induslnd Media and Communications Co., which plans to launch movie and entertainment channels via cable. Backed by the expat, London-based Indian family the Hindujas, the venture also aims to build multiplex theaters. Its subsid Cablenet intends to rent satellite decoders direct to Bombay consumers, enabling them to bypass cable (Variety May 29-June 4).

Modi’s solution was to create the Modi Ent. Network (MEN), based in Delhi under CEO Tony D’Silva, who’s had 23 years of experience in sales and marketing with leading companies such as Nicholas of India and Reckitt and Coleman.

MEN has established an extensive distribution network of six regional offices, supported by a team of sales managers in 40 locations. They’re working with more than 100 exclusive distributors with a servicing staff of 1,500 people, plus 200 technical and field personnel.

MEN also has on tap Modi’s tobacco sales force, which services 50,000 retail outlets. The object is to audit and supervise each and every cable operator.

“The Modi strategy focuses on distribution,” says D’Silva. “In a country as vast as India where technology costs are high, MEN can serve a key purpose by introducing communications and information networking and 24-hour servicing, both of which will strengthen cable operators’ reach and performance. We have the advantage of rationalizing costs through the back-up offices of existing Modi marketing outlets.”

Former Star TV executive Nischint Chalwa joined MEN as divisional manager, business development last October.

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