NBC U moves into Indian TV

Conglom takes stake in NDTV

NBC Universal is moving to the forefront of the Indian broadcasting sector.

The GE-backed conglom confirmed Tuesday that it will pay $150 million for an initial 26% stake in NDTV Networks, the holding company for the entertainment nets operated by leading Indian news broadcaster New Delhi Television.

The memorandum of understanding signed by NBC U topper Jeff Zucker and NDTV chairman Prannoy Roy foresees NBC U increasing its stake to 50% after two years. Both stages of the deal are subject to regulatory and shareholder approvals.

NDTV Networks, a Blighty-registered company, includes lifestyle channel NDTV Good Times, which launched in September; Hindi-language general entertainment net NDTV Imagine, which took to the airwaves on Monday; and channel consultancy business NDTV Emerging Markets.

Also included in the deal are digital media business NDTV Convergence; media tech unit NDTV Labs; and NGEN, a media processes outsourcing company that is a joint venture with former GE offshoot Genpact.

“This will be a significant investment for NBC Universal in an important emerging market and further illustrates our commitment to expand our company internationally, particularly in high-growth areas,” Zucker said in a statement. “The Indian TV market is expected to grow at 16% annually, which provides huge opportunities now and into the future.”

Deal between NBC U and NDTV may also see high level cooperation between the two congloms. NDTV sources point to U’s strength in general entertainment as bolstering its own diversification away from news and into the entertainment and lifestyle sector.

“Over the past six months, we have launched four channels and made significant progress in new-generation Internet and mobile phone offerings. This partnership with one of the world’s most respected media companies will strengthen our position as a dominant force in Indian media and entertainment,” said NDTV Networks chief exec Vikram Chandra.

Currently unclear are implications for NBC U’s minority stake in CNBC-TV18, the localized Indian business channel that is a competitor of NDTV’s own business offering, NDTV Profit.

Taking the NDTV stake reps Zucker’s second major international move, having spent $350 million last year to acquire Sparrowhawk Media.

“Entertainment is growing faster outside the United States than it is inside the United States. So if you want to grow, you have to go outside the United States,” Zucker said recently.

Purchase also makes NBC U the fifth Hollywood conglom to take a major position in India and the third in the last year. Both Sony and News Corp. have been long-term players in the TV scene, while Viacom last year hitched up with the TV 18 Group to form the Viacom 18 joint venture, and Disney bought a 15% stake in UTV Software Communications.

NDTV Networks last year raised $120 million through a private placing of a 24% stake and brought in major investors including Lehman Brothers, Goldman Sachs and Credit Suisse.