Sony's MGM deal may lead to a ZEE-MGM split

When Sony executives agreed in principle to buy Hollywood film studio Metro-Goldwyn-Mayer (MGM) on Tuesday, surely the Indian television industry was the last thing on their minds. However, as things usually turn out in today's highly interconnected global village, the upheavals in Hollywood may have its effect on India; the Sony deal may lead to a split in the ZEE-MGM partnership.

Here's why. MGM's Indian joint venture with ZEE is a part of the ZEE Turner bouquet, which happens to be a rival of Sony's Indian television venture and the Sony-Discovery sponsored One Alliance.

When agencyfaqs! spoke to Ajay Trigunayat, business head, ZEE MGM, he said, "We are in the process of re-evaluating our deal with MGM, and very soon we will come to a decision on whether to continue with MGM, or not.Trigunayat confirmed that in case ZEE breaks its joint-venture contract with MGM, the channel will launch a English movie channel. We are looking at several factors such as the investment required to launch an English movie channel, and comparing it with the current revenue sharing arrangement with MGM,Trigunayat explained."

He also indicated the possibility of tying up with another Hollywood production house for movie titles. From Sony's perspective, it is unlikely that it will let MGM to continue with ZEE any longer. In any case, industry sources confirm that Sony Entertainment Television is also planning to launch an English movie channel soon. Although, channel executives are tight-lipped about the launch, Kunal Dasgupta, chief executive officer, SET India, has recently told agencyfaqs! that SET India is planning to add another channel to its distribution bouquet.

Launching an English movie channel makes sense for Sony since HBO, the English movie channel which was a part of Sony's One Alliance distribution network, has recently opted out in favour of the ZEE Turner distribution bouquet. With this development, One Alliance isn't left with any English movie channel in its bouquet at the moment.

Kunal Dasgupta, chief executive officer, SET India told agencyfaqs!the deal between Sony and MGM had happened internationally and the Indian television venture was not taken into major consideration while signing the deal. However, since the deal has already been announced, the Indian venture would certainly try to benefit from it. MGM has produced hundreds of films under the United Artists label and has a considerable library of more than 4,100 titles, including the "Pink Panther" and "Rocky" franchises.

SET India will definitely like to stake its claim on this treasure trove.

© 2004 agencyfaqs!